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Plumtree makes another run at IPO

Plumtree makes another run at an initial public offering.

As corporate portal company Plumtree Software makes another run toward an IPO, the company is tuning its message...

to put more distance between itself and other pure-play vendors, and offer greater differentiation from portal behemoths IBM and SAP.

Cofounder and VP of product marketing Glenn Kelman insists that IBM and SAP offer customers little opportunity to develop a heterogeneous approach to portal implementation across different systems -- it's essentially a lockdown.

By contrast, Kelman questions the very business viability of the pure plays. He expects rivals, which include Covia, Exult-Epicenter and Viador, to be acquired as the market consolidates because all face funding issues. Plumtree, on the other hand, appears to have reached the escape velocity needed to sustain an independent business. Moreover, it's clear from what Kelman says that Plumtree will be using IPO proceeds (cash and stock) to make acquisitions to propel itself to the next level and take the game to IBM and SAP.


A new Butler Group study shows that Plumtree remains the most popular portal software among enterprise users it surveyed, but that its one-time closest competitors, Hummingbird and Microsoft (which uses Plumtree), have given way to IBM and SAP.

Plumtree now clocks several million end users across its 307 clients, and is touting a study of its customer base which shows that of 110 respondents, 81% are in production, and an additional 8% will be in production within three months. Two-thirds of customers deployed the portal in less than six months. The study finds that documents are the resources integrated first, with a third of respondents indexing more than 10,000 documents in the portal. The applications most often integrated in the portal are groupware, document management, CRM and ERP applications.

Sales and marketing

On the back of its US aerospace industry wins, Plumtree is about to announce a deal with a major European aerospace company, which it attributes directly to the pull-through from US customers. It's beaten out IBM in this case, it says.

The company is also readying a new set of products for release next month that extend the functions of its portal suite, but it insists it won't encroach on its partners' turf. It has an extensive set of relationships, including a raft of business intelligence, application integration and content management companies, in addition to its marquee clients like Microsoft and Siebel.

Financial impact

Plumtree originally filed for its IPO back in 2000, but postponed the offering because of the subsequent deterioration of the market. It currently does 12% of its revenue in Europe, but hopes to raise that to 30% over time. It lost $7.8 million on revenue of $80.17 million in the year ending in December, compared with a loss of $21.6 million on revenue of $34.1 million in 2000. As a value proposition, it points to Meta Group research that suggests 85% of medium and large organizations will have portals in place by 2004, up from 20% today.


Selling five million shares will give Plumtree capital to expand operations abroad, broaden its portfolio by acquiring other technologies and extend its customer base. However, according to recent Meta research, many organizations (25% and rising, it says) have installed portals, but are having difficulty determining value to justify new funding requests. Basic Web log analysis has proven inadequate for measuring portal use.

This means Plumtree needs to develop clear return on investment propositions for portals and help customers develop benchmarking mechanisms and metrics for measuring the benefits, which can then be used to secure procurement budgets.

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