The market for Web content management applications is headed for consolidation as worldwide software sales continue to slide, according to officials from market leader Vignette. Research firm Gartner noted that half the Web content management software sellers today will fail, merge or be in niche segments of the market. 'As more and more enterprises try to raise their productivity while cutting down on the cost of doing business, market demand will increasingly favour those vendors which can provide an integrated suite of applications - combining content management, personalisation, aggregation, integration and analysis,' said Leif Pedersen, vice-president at Vignette. The anticipated market shift is supposed to play to the strengths of the company, based in Austin, Texas,and version six of its Vignette product, which was introduced worldwide this September. Integrated Web content management applications enable organisations to interact online with their customers, employees and partners. Mike Kearney, director for product marketing at Vignette, said the expected consolidation would follow what has happened in other enterprise software market segments such as database, enterprise relationship management (ERP) and customer relationship management (CRM) products. He noted that only a few companies, led by Oracle, play in the database space. The same has happened in the ERP and CRM arenas, where Germany's SAP and Siebel dominate, respectively, those market segments. 'We expect to see the same situation occur in the Web content management space,' he said. According to Gartner, Vignette's main rivals included Interwoven and Documentum. Challengers include BroadVision, in certain content management applications, and Microsoft, which purchased content management specialist NCompass Labs this year. As of August this year, Gartner estimated about 35 more vendors were competing in the arena. These include software vendors, like Merant, which used to focus on software change management applications. 'What sets Vignette ahead of the pack is that it was the first in the industry to introduce a Web content management offering that combines capabilities for managing, personalising, integrating and analysing content in a single solution,' said Swamy Viswanathan, vice-president and business architect for applications at Vignette. Mr Pedersen added: 'Driving effective and profitable online interactions requires rich, dynamic content and this kind of integrated functionality. With our new packaged suite and simplified pricing, these benefits are now even more accessible to a wider range of organisations.' Early users of Vignette V6 include large multinational organisations like IBM. These IBM sites receive more than 10 million page views per month, placing them among Vignette's most visited implementations. Unlike other offerings on the market, Vignette officials touted the V6 product as having both integrated content management applications and open platform support. 'Supporting all relevant enterprise technology platforms means that customers can extend their legacy investments, leverage the skills of their in-house technology staff and ensure that their Internet applications and portals meet their business goals,' Mr Pedersen said. According to Gartner, the core functions inside Web content management applications will move towards commodity status as market forces push product prices lower. Economic restraint has led many organisations to put spending on hold, causing worldwide outlays on new software to grow just 6 per cent in the first half of this year, according to Gartner Dataquest. The software industry's growth rate has slowed to less than half from last year when worldwide software spending increased 18 per cent. Worldwide software spending this year is projected to grow slightly less than 7 per cent with new licence revenue of approximately US$77 billion. Last month, Gartner's top-ranked Web content management application vendors posted significant third-quarter losses. Vignette announced a loss of US$147.9 million and revenues of US$70.5 million, down from revenue of US$110.39 million in the same period last year.