IT analyst firm Gartner recently released research on market share numbers (Market Share: Application Infrastructure and Middleware Software, Worldwide, 2008 35-page document; USD 9,995), in which they crown IBM as the leader in web portals. IBM immediately issued a press release, IBM Ranked #1 in Web Portal Software Market Share, where you can find a few more details. This is far from the reality that I see, so let me take a deeper look at this, as sales people tend to use market share numbers quite frequently in front of customers.
The ranking was based on total worldwide software revenue for 2008, so the many open source portal projects were not included. Among the most significant projects here are Liferay, Plone and uPortal. These have all been quite innovative in the recent year, while IBM has done very little to improve the WebSphere Portal offering.
Microsoft is known to give away SharePoint like candy, so SharePoint might indeed have less revenue. A substantial portion of SharePoint licenses remain unused, but still adoption of SharePoint is much higher than IBM. Here’s some supporting indicators:
- European intranet and portal expert Jane McConnell found 55 percent of the 226 participating enterprises in her Global Intranet Strategies Survey were currently implementing or planning to implement SharePoint. The survey was conducted during 2008, just like the Gartner research, so unless a large number of organisations have bought both IBM WebSphere and Microsoft SharePoint licenses one of them is wrong.
- Less than 10 organisations among our community of practice members use IBM WebSphere Portal, while we have more than 50 organisations using SharePoint and 3 dedicated SharePoint groups.
Oracle is another significant vendor in the space. They have several different portal products and claimed portal market leadership last year. Oracle WebCenter Suite has seen very little adoption, even though it is the strategic portal platform for Oracle. I suspect that if you combine all of their 5 enterprise portals, they still generate less revenue than IBM WebSphere Portal.
As you can see, market share numbers can easily be very misleading. I don’t recommend automatically buying from the “leader”, as it will easily become a very expensive exercise, in particular if WebSphere Portal is a bad fit for your requirements. Also, WebSphere is known to be comparatively expensive to implement. IBM is a significant vendor with good numbers globally, but remember that the portal revenue represents only a small fraction of IBM’s overall revenue. If you are curious, take a look at my detailed analysis on IBM’s recent annual report.
Do you agree with Gartner that IBM is #1? Does it matter?
Sten Vesterli May 25th, 2009 8:21
The only publicly available numbers seem to be the ones from Gartner’s own press release (http://www.gartner.com/it/page.jsp?id=689410). These aggregate the entire application infrastructure and middleware (AIM) space, so I can’t see how IBM can use these totals to claim leadership in one specific area of AIM (Portals).
JP May 25th, 2009 8:21
When I was at the Gartner PCC conference in LA last September, Gartner was predicting that the enterprise portal market would approach $1.5B in 2009 and that IBM would continue to take the largest share of the market with over $400M. The size of the economic downturn had not yet fully revealed itself (perhaps it still hasn’t), so that market size projection was probably overly optimistic. If memory serves I believe the 2007 market was around $1.1B. The 2008 numbers were not yet available. It’s interesting that Gartner sometimes reports portals within the portal, content, and collab (PCC) space, and other times within the lower-level application infrastructure and middleware (AIM) space. I would argue that enterprise portals have moved up the value chain enough to merit inclusion in the former category.
Janus, while you are certainly correct that looking at revenues gives a different picture than looking at adoption, I still believe that revenues are the most important metric. Why? One reason is that the time-tested competitive strategy of undercutting a market leader with discounted or free alternatives is ultimately a sales strategy. The hope of course is that the money left on the table in the short term will be made up in the long term via market share gains. The revenue numbers, however imprecise, are still the best indicator of when or if that strategy will pay off. I believe this is true for for-profit open source companies as well; altruistic motivations aside, they are still in business to make money. Support and maintenance revenue is included in Gartner’s market sizing. When an open source company chooses to charge only for support and maintenance and not for licenses, that too is a sales strategy whose success or failure will ultimately be reflected in the revenue numbers.
Certainly adoption is also a very important metric. But for my “money”
the value the market places on these products provides the clearest picture of what’s currently happening. The adoption trends you describe are likely predictive of future changes to the revenue picture.
How IBM is #1 in web portal software? « contentprise August 15th, 2009 8:21
[...] 1. Technology: Still the market share of .net is much less than java. IBM being a java based portal and is adopted by organizations who either already have java based software infrastructure or their decisive people are pro-java. I agree with Janus [...]