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Web opens enterprise portals

January 28, 1999
Web posted at: 9:09 p.m. EST (0209 GMT)

by Emily Fitzloff and Dana Gardner


(IDG) -- Unlocking the vast wealth of knowledge stored in enterprise resource planning (ERP) systems, Web sites, data warehouses, legacy mainframes, and client/server systems is at the top of the list for every major corporation today.

In fact, many companies are now moving to bring these disparate tools together using Web technologies, such as browsers and the emerging data-neutral Extensible Markup Language file format, to essentially create Enterprise Information Portals (EIPs) that allow users to access data stored in any one of these applications.

This trend is expected to spark a wave of merger and acquisition activity across the decision-support spectrum as major companies look to integrate data warehouses, data marts, and data-mining and knowledge management tools within single application suites.

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"The big solutions providers will partner with, license from, or acquire the small niche players that don't have the wherewithal to bring product[s] to a mainstream market," says Gerry Murray, director of knowledge technologies at International Data Corp. (IDC), in Framingham, Mass.

Until recently, the capability to join disparate data sources and make them available across enterprises in an organized, personalized, secure, and searchable fashion was not readily available.

As a concept borrowed from online applications, EIP is a data management strategy that provides a window into enterprise knowledge by bringing life to previously dormant data so it can be compared, analyzed, and shared by any user in the organization.

These EIPs will become so compelling for corporations that spending on them will soon overtake the fast-growing ERP market, according to a November 1998 report, "Move over Yahoo!; the EIP Is on Its Way," from Merrill Lynch.

"We estimate the total EIP market will grow from $4.4 billion [in 1998] to over $14 billion by 2002 ... [and that] takes into account possible market softness due to Y2K concerns, euro conversions, and a general contraction in capital expenditures," the report states.

One early adopter says EIP has had a profound impact.

"We can easily locate just the kinds of information we want, which leaves us without wasted time," says Jim Lind, president of Mercury Energy, in Dallas.

Lind's company is deploying an EIP solution from Sagemaker, in Fairfield, Conn., primarily for querying external content databases for competitive information about the energy industry.

"We're doing something like [an EIP] now. We're using it for e-commerce initiatives, of which we have at least three," says Brad Reisner, director of technology operations at the Book-of-the-Month Club, a Time Warner unit in New York. "We haven't yet got to the point of calling it a portal, but that seems to be the direction.

"Most of the applications are process-oriented. Workflow is big," Reisner continues. "It does increase productivity."

According to experts, those who plunge into EIPs early earn a sizable competitive advantage, bolstered by lowered costs, increased sales, better deployment of resources, and internal productivity enhancements such as sharper performance analysis, market targeting, and forecasting.

"We'd prefer that not everyone in our business have this type of product, because it's given us such an edge," Lind says.

The chore of accessing and assimilating all types of information further broadens the role of an EIP, analysts say, which leads them to conclude that EIPs will become a major consolidating force, pulling together the various strategic facets of an organization.

In fact, analysts predicted that this aggregation of functionality will likely result in the consolidation of these markets over time.

Some consolidation has already taken place. Hyperion Solutions purchased online analytical processing provider Arbor Software, and Ardent Software acquired both data-warehousing company Prism and middleware software company Dovetail.

In addition, the industry's major players are gearing up to ride the wave of this EIP trend. IBM, Microsoft, Oracle, Cognos, and Platinum Technology have outlined comprehensive business-intelligence strategies, and SAS is preparing to extend its decision-support tools to contract knowledge management in February.

IBM has already struck a joint development deal with Viador to bring that company's Java-based business intelligence solution to the IBM mainframe platform.

In addition, Lotus and IBM last week announced the establishment of the Institute for Knowledge Management (IKM), a commercial research consortium that will perform applied research on knowledge management.

IKM will draw on expertise from a number of IBM and Lotus entities, including IBM's Thomas J. Watson Labs, the Lotus Institute, IBM Global Services, and IBM Software Services, according to Lotus officials, in Cambridge, Mass. The Institute will help Lotus and IBM, which bought Lotus in 1995, share their research and expertise, says Michael Zisman, executive vice president of strategy at Lotus.

Lotus is also currently readying a competitive intelligence workflow application, according to Michael Helfrich, director of the worldwide knowledge management solutions group at Lotus.

One Documentum executive predicted that the EIP market will strongly parallel the emergence of the ERP market.

"We're still in the early days of tools and consulting where custom apps are being built. The next trend will be to codify those custom apps into specific repository-based apps like HR, call centers, and expense reports. After that, all the apps will get snapped into suites a la SAP," says Larry Warnock, vice president of corporate marketing at Documentum, in Pleasanton, Calif.

In Warnock's estimation, it is inevitable that Microsoft will emerge as the de facto point of entry into all of these underlying business application lines. Documentum plans to deliver a series of business portal applications that leverage unstructured documents and data for delivery to EIP sites within the next 30 to 60 days, Warnock says.

Properly implemented EIPs should help companies cut costs and generate added revenues, which is a potent and attractive mix. Analysts also pointed to information-multiplier effects, where the more information you manage to control and exploit, the more opportunity there is to stumble into new ways of using it.

"Once people realize the potential, those at the top see how it can all interact," says Julie Tylman, an industry analyst at Merrill Lynch, in San Francisco, and co-author of the EIP report. "Most companies would find that irresistible."

Further, by creating EIPs, companies can extend the benefits gleaned inside the company to the outside. They can cement customer and supplier relations, and coordinate workflow, collaboration, and transactions with other progressive companies.

Linking such companies through their EIPs, according to the experts, puts into place a linchpin of broadly based automated, transactional Internet commerce -- the big enchilada of the wired world.

"To gain the benefits hoped for from the Internet, computing platform companies need a new class of software that serves internal and external customers seamlessly through a common gateway that provides personalization, publishing, and analysis -- not just browsing and searching," says Mansoor Zakaria, founder and CEO of 2Bridge, a maker of Web-based content aggregation servers and applications, in San Francisco.

The EIP trend is also appearing just as the notion of knowledge management is being embraced by large vendors such as Lotus.

Knowledge management attempts to find and hold the valuable information in an enterprise that is often in the form of unstructured data. Such information does not usually end up in a database where it can be warehoused and analyzed.

"Knowledge management is one of the first major market trends to specifically address this problem of intellectual inefficiencies of process," IDC's Murray says.

Coordinating knowledge management and EIP efforts strikes analysts as an excellent fit.

"The pieces of the structured and unstructured information need to come together, and that's not trivial," Tylman says.

"Uniformly tagging structured and unstructured data is the key," Murray agrees.

Despite the promise of EIPs, their actual deployment appears to be small, and in many cases the content on them amounts to little more than the corporate telephone directory and newsletter.

"My experience is that such things as data mining are pretty far out. The things that keep people coming back to an EIP are scheduling, lists, and the password reset page. The current driver is data about people," says Frank Chen, group product manager for directory and security at Netscape Communications, in Mountain View, Calif. "I think people will get to the data mining. The pieces are all falling into place."

IT administrators say they like the EIP idea, but they are worried about security and have a hard time weaning their end-users off of the interfaces they have become accustomed to.

"I guess [EIPs] are the natural progression of things, but there are lots of apps that have different UIs for good reasons," says John Bercik, systems manager at Medical University of South Carolina, in Charleston, S.C.

Bercik agrees that EIPs need to mature before more rank-and-file information is posted. As part of a medical community, he is concerned about making sure that patient information is handled responsibly.

The vendor community is reacting as if the EIP trend is inevitable and fast approaching. The Wall Street investment community seems to think so, too, given the high price of Web portal and I-commerce stocks.

One major investment brokerage, Charles Schwab, has already deployed an EIP solution from Viador. Viador's Viador E-Portal Suite, already boasts an impressive customer roster that also includes IBM, Sun Microsystems, 3Com, Sprint, and Citibank.

The Viador portal "is very similar to the My Yahoo concept," according to Sid Bhatia, managing director of the mutual funds technology groups at Charles Schwab, in San Francisco. "With this application, we're exposing trading information that all these years has just sat in-house, and letting our mutual fund companies and investors access it securely and dynamically."

Also, many millions of dollars have been invested by venture capitalists and corporate "angels" to fund start-ups -- such as 2Bridge -- that may establish new and profitable enterprise beach heads to exploit weakness or sluggishness by the old-line vendors.

Consequently, many established vendors, although enticed by the opportunity for EIPs, also worry about facing obsolescence, shakeouts, and changes in customer wants that a paradigm shift to portals could entail.

Although many large corporations have already witnessed the vast benefits of EIPs, most users and analysts agree that the arrival of EIPs en masse may not be as soon as some software vendors assume -- at least not until integral issues, such as security, get ironed out.

"When we wrote the report, we saw this as happening five years down the road. But a lot of people might want to get started on this now," Merrill Lynch's Tylman says.

Dana Gardner is an editor at large who covers application development, and Emily Fitzloff is a senior writer who covers Web server technology. Rebecca Sykes, a correspondent for the IDG News Service, contributed to this article.

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