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By Jacqueline Emigh  |  Posted 2001-04-09 Email Print this article Print
 
 
 
 
 
 
 

Key acquisitions set to trigger consolidation in portal software market.

SAPs planned $400 million buyout of TopTier Software is the latest in a flurry of acquisitions to kick off consolidation within the enterprise portal software market. "Its a shopping center out there," says Mark Wesker, president and COO of Sequoia Software. Wesker speaks from first-hand knowledge, because Sequoia is positioned to be acquired by Citrix Systems in a $180 million deal.

Signs of consolidation have been in the works in this sector. Divine Inc., formerly divine inter- Ventures, announced in February its intentions to buy SageMaker to complement a portfolio of companies offering enterprise information portal solutions.

Portals are gaining new buzz lately and defining them is not easy. Enterprise portals "pump through all the information you need from both the Internet and the enterprise, in a personalized way," says Paul Connolly, Sybases VP of strategic marketing.

Smaller portal software firms are in a good spot to be acquired by larger companies that can offer deep pockets and well-groomed distribution channels. In turn, larger enterprise software companies are under mounting pressures to broaden their own product lineups.

"If you dont have the capability for an enterprise portal, youre simply not going to survive in enterprise software," says Connolly.

SAPs acquisition motives are simple. "It was not a question that we should buy a software company just to beef up development. It was only a question that we should buy TopTier," says Hasso Plattner, co-chairman of SAP.

The consolidation in the crowded portal software space is being sped up by the economic slowdown and the dwindling availability of venture capital funds, says Hadley Reynolds, analyst with The Delphi Group.

Dean Alms, co-president of Groundswell, a portal integrator, says SAPs move takes Top Tier out of the running and speeds up consolidation in the portal arena.

The smaller portal ISVs say that buyers are an attractive consideration. TopTier CEO Shai Agassi cites the "power and big stick" of SAP.

SAPs new portals subsidiary, combining Top Tier and SAP staffers, will generate 90 percent of its revenues through partner channels, says Klaus Kreplin, SAPs senior VP for business intelligence and workplace.

For their part, channel partners will get another product to sell, although implementing a portal isnt easy, experts say.

Overall, smart ISVs are getting primped for all sorts of potential suitors. "Smaller portal software companies will either die on the vine or be acquired," says Sybases Connolly.

 
 
 
 
 
 
 
 
 
 
 

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