“Does anybody in their right mind believe portals should be developed by a separate group of companies?” asked PeopleSoft CEO Craig Conway back in January 2002. “There’s not enough science in them for anybody to turn to a third-party software company.”

Conway’s opinion drew immediate fire from Plumtree, the market leading pure-play portal company and other portal market players. But the sale of Viador to a venture capital group and the acquisition of Corechange by Open Text in March 2003 mark yet another phase of consolidation in this sector. In fact, Plumtree now stands alone in a market increasingly dominated by the enterprise application giants.

And the transactions are getting smaller. Open Text picked up Corechange for just $4.2 million – small change compared to the billion-dollar valuations that such companies once commanded.

Canada-based Open Text plans to integrate Corechange’s flagship Corepoint portal, praised for its strong collaborative and community content sharing capabilities, with its own Livelink knowledge management software suite.

The Corechange purchase is the latest in a modest spending spree by Open Text. In January 2003, the company spent $6.7 million on Eloquent, which develops collaborative add-ons for sales force automation packages, and $20.3 million on unified communications software developer Centrinity in November 2002.

The purchase of portal pioneer Viador by a Sino-American group of private investors will bring the once publicly listed company private. Viador repositioned itself as a portal-based business intelligence tools vendor in 2001 in a bid to distinguish itself from its plain vanilla portal competitors.

However, buyers were unconvinced and this shift only hastened its decline. From a peak of $26.2 million in 2000, revenues fell to $9.1 million in 2001 and less than $5 million in 2002.

Viador CEO Stan Wang, who leads the investor consortium, believes that the cost savings from going private, combined with a renewed management focus, will enable him to run the company profitably – which will be a first.

Many financial analysts believed networking hardware giant Cisco Systems – once aggressively acquisitive – had stopped buying companies. After acquiring more than 20 companies at the height of the technology spending boom in 2000, it bought just two in 2001.

But three months into 2003, Cisco has already made three purchases totalling more than $650 million in value. Its latest is Linksys, a 14-year-old manufacturer of networking products for the small office/home office (SOHO) sector, for $500 million.

The SOHO audience represents new ground for Cisco. In the past, it has avoided this end of the market in favour of the more profitable higher end. It has only moved now because the home networking market has “achieved mass market acceptance”, according to CEO John Chambers.

Linksys, which makes gigabit routers and switches, network-attached storage devices, wireless routers and wireless print server appliances, claims a 30% share of this market, so Cisco is well placed to dominate it.

The company had investigated setting up its own consumer wireless products unit, but decided that purchasing instant market leadership was the easier option.