Illuminata believes that the portal marketplace has already shown some impressive growth. Citing supporting research from Gartner Dataquest, ABN AMRO, and IDC, Illuminata's report mentioned that the marketplace grew 59 percent last year (whereas enterprise software in general grew 4.3 percent) and will grow from $550 million in 2001 to over $3 billion in 2006.

Observers of the e-business world have long been wary about rosy projections and the next big application area, but Illuminata analyst Stephen O'Grady says that there are tangible reasons driving his optimism about portals.

"It pays very quickly as opposed to CRM [customer relationship management] and ERP [enterprise resource planning]." Portals deliver benefits in direct proportion to depth and breadth of usage, O'Grady claims. There's employee productivity, of course, but also other benefits.

"It depends on what you have in there," O'Grady explains. "There's more accurate, fresher content, with downstream impact on customer relationships. You can improve processes by adding in business process management and supply chain control."

Along with Gartner, Illuminata favors the integration-centric portal over what O'Grady calls the information-aggregating portal.

O'Grady's opinion is that the marketplace is still validating pure-plays, but that the future belongs to the incumbent application infrastructure specialists: IBM, Oracle, and Microsoft. That's because these vendors have more resources and also historical dominance in the overall infrastructure into which portals fit, he says.

November 2002