<PAGE>

                                                                   Exhibit 10.21

                           FIRST AMENDMENT TO LEASE


     THIS FIRST AMENDMENT TO LEASE (this "Amendment") is entered into as of the
30th day of October, 1998, by and between B.O. III, LTD., a Texas limited
partnership ("Landlord") and VIGNETTE, INC., a Delaware corporation ("Tenant").

     WHEREAS, Landlord and Tenant executed that certain Office Lease Agreement
(the "Lease") dated August 4, 1998 covering 66,900 square feet of Agreed
Rentable Area in the building known as Barton Oaks Plaza III (the "Building"),
as more particularly described therein;

     WHEREAS, pursuant to Rider 4 to the Lease, Tenant has exercised its right
of first refusal to lease 10,000 square feet of Agreed Rentable Area on the
third (3rd) floor of the Building shown on Exhibit A attached hereto (the
                                           ---------
"Expansion Premises"); and

     WHEREAS, Landlord and Tenant desire to amend the Lease to reflect their
agreements as to the terms and conditions governing Tenant's lease of the
Expansion Premises.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
between the parties herein contained, Landlord and Tenant hereby agree as
follows:

1.   Premises.
     --------

     (a)  Effective on the earlier to occur of (i) January 1, 1999 or (ii) the
date Tenant occupies the Expansion Premises for the conduct of business (such
earlier date, the "Expansion Premises Commencement Date"), Item 2 of the Basic
Lease Provisions shall be amended in its entirety to read as follows:

     Premises:

     a.   Suite #: 500; Floors: A portion of the first floor, a portion of the
          third floor and the entire fourth and fifth floors.
     b.   Agreed Rentable Area:  76,900 square feet.

2.   Basic Rent.  Effective on the Expansion Premises Commencement Date, Item
     ----------
3.a of the Basic Lease Provisions shall be amended to read as follows:

     a.   Basic Rent (See Article 2, Supplemental Lease Provisions):

     With respect to that portion of the Premises located on the first floor,
     the fourth floor and the fifth floor and consisting of 66,900 square feet
     of Agreed Rentable Area:

                           Rate Per Square   Basic            Basic
     Rental                Foot of Agreed    Annual           Monthly
     Period                Rentable Area     Rent             Rent
     ------                -------------     ----             ----

     Months 1 - 36         $16.50            $1,103,850.00    $91,987.50
     Months 37 - 60        $17.50            $1,170,750.00    $97,562.50
<PAGE>

     With respect to the 10,000 square feet of the Premises located on the third
(3rd) floor of the Building:

                             Rate Per Square   Basic           Basic
     Rental                  Foot of Agreed    Annual          Monthly
     Period                  Rentable Area     Rent            Rent
     ------                  -------------     ----            ----

     *Expansion Premises
     Commencement
     Date - 12/31/99         $17.00            $170,000.04     $14,166.67
     1/1/00 - 12/31/00       $17.25            $172,500.00     $14,375.00
     1/1/01 - 12/31/01       $17.50            $174,999.96     $14,583.33
     1/1/02 - 12/21/03       $17.75            $177,500.04     $14,791.67

     *The Expansion Premises Commencement Date is hereby defined to mean the
     date which is the earlier to occur of (i) January 1, 1999 or (ii) the date
     Tenant occupies that portion of the Premises located on the third floor of
     the Building and containing 10,000 square feet of Agreed Rentable Area for
     the conduct of business.

3.   Tenant's Pro Rata Share Percentage.
     ----------------------------------

     (a)  Effective on the Expansion Premises Commencement Date, Item 4 of the
Basic Lease Provisions shall be amended in its entirety to read as follows:

     a.   Tenant's Pro Rata Share Percentage:  63.33% (the Agreed Rentable Area
          of the Premises divided by the Agreed Rentable Area of the Building,
          expressed in a percentage).
     b.   Tenant's Initial Monthly Payment of Additional Rent: $8.00 per square
          foot of Agreed Rentable Area; $51,266.67 per month.

     (b)  Effective on the date which is the fifth (5th) anniversary of the
Commencement Date, Item 4.a of the Basic Lease Provisions shall be amended in
its entirety to read as follows:

     a.   Tenant's Pro Rata Share Percentage:  8.24% (the Agreed Rentable Area
          of the Premises divided by the Agreed Rentable Area of the Building,
          expressed in a percentage).

4.   Term.  Effective on the Expansion Premises Commencement Date, Item 5 of the
     ----
Basic Lease Provisions shall be amended in its entirety to read as follows:

     Five (5) years and zero (0) months from the Commencement Date with respect
     to that portion of the Premises located on the first, fourth and fifth
     floors and consisting of 66,900 square feet of Agreed Rentable Area (see
     Article 1, Supplemental Lease Provisions).  Five (5) years and zero (0)
     months from the Expansion Premises Commencement Date with respect to that
     portion of the Premiss located on the third floor and consisting of 10,000
     square feet of Agreed Rentable Area.

5.   Expiration Date.  Effective on the Expansion Premises Commencement Date,
     ---------------
Item 7 of the Basic Lease Provisions shall be amended in its entirety to read as
follows:

     October 31, 2003 for that portion of the Premises located on the first,
     fourth and fifth floors and consisting of 66,900 square feet of Agreed
     Rentable Area (as adjusted pursuant to Article 1, Supplemental Lease
     Provisions); December 31, 2003 for that portion of the Premises located on
     the third floor and consisting of 10,000 square feet of Agreed Rentable
     Area..
<PAGE>

6.   Amendment of Exhibit A.  Exhibit A attached hereto shall be added to and
     ----------------------   ---------
made a part of Exhibit A attached to the Lease.
               ---------

7.   Security Deposit.  Concurrently with the execution hereof, Tenant shall pay
     ----------------
to Landlord the sum of $46,900.00, representing the Security Deposit for the
Expansion Premises.

8.   No Representations.  EXCEPT AS PROVIDED IN THE LEASE, LANDLORD HAS NOT MADE
     ------------------
AND DOES NOT HEREBY MAKE AND HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS
OR WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE EXPANSION PREMISES, ITS CONDITION (INCLUDING WITHOUT LIMITATION
ANY REPRESENTATION OR WARRANTY REGARDING QUALITY OF CONSTRUCTION, STATE OF
REPAIR, WORKMANSHIP, MERCHANTABILITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE).

9.   Tenant's Improvements.  Landlord shall construct improvements in the
     ---------------------
Expansion Premises subject to and in accordance with the terms and conditions of
the Work Letter attached hereto as Exhibit B.
                                   ---------

10.  Acceptance of Expansion Premises.  Tenant hereby accepts the Expansion
     --------------------------------
Premises for all purposes.  Upon Substantial Completion of the improvements in
the Expansion Premises, Landlord and Tenant shall execute the Acceptance of
Premises Memorandum substantially in the form of the Acceptance of Premises
Memorandum executed in connection with the Lease.

11.  No Brokers.  Tenant warrants that it has had no dealings with any real
     ----------
estate broker or agent in connection with the negotiation of this Amendment,
excepting only the broker named in Item 9 of the Basic Lease Provisions (The
Alexander Company) and that it knows of no other real estate brokers or agents
who are or might be entitled to a commission in connection with this Amendment
or otherwise in connection with the Lease. Tenant agrees to indemnify and hold
harmless Landlord from and against any liability or claim arising in respect to
brokers or agents other than the broker named in Item 9 of the Basic Lease
Provisions.

12.  Authority.  Tenant and each person signing this Amendment on behalf of
     ---------
Tenant represents to Landlord as follows: (i) Tenant is a duly incorporated and
validly existing under the laws of the State of Delaware, (ii) Tenant has and is
qualified to do business in Texas, (iii) Tenant has the full right and authority
to enter into this Amendment, and (iv) each person signing on behalf of Tenant
was and continues to be authorized to do so.

13.  Defined Terms.  All terms not otherwise defined herein shall have the same
     -------------
meaning as assigned to them in the Lease.  Except as amended hereby, the Lease
shall remain in full force and effect in accordance with its terms and is hereby
ratified.  In the event of a conflict between the Lease and this Amendment, this
Amendment shall control.

14.  Exhibits.  Each Exhibit attached hereto is made a part hereof for all
     --------
purposes.

15.  Entire Agreement.  This Amendment, together with the Lease, contains all of
     ----------------
the agreements of the parties hereto with respect to any matter covered or
mentioned in this Amendment or the Lease, and no prior agreement, understanding
or representation pertaining to any such matter shall be effective for any
purpose.
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.

                              LANDLORD

                              B.O. III , LTD., a Texas limited partnership

                              By:  Office/Industrial, Inc., General Partner



                                    By: /s/ Richard E. Anderson
                                       ------------------------------------
                                    Name:  Richard E. Anderson
                                    Title: Vice President

                              TENANT:

                              VIGNETTE, INC., Delaware corporation



                              By: /s/ Jack F. Lynch
                                 ------------------------------------------
                              Name:   Jack F. Lynch
                              Title:  Vice President
<PAGE>

                                   EXHIBIT A
                                   ---------

                            THE EXPANSION PREMISES
<PAGE>

                                   EXHIBIT B
                                   ---------

                                  WORK LETTER
                   PLANS TO BE AGREED UPON/FINISH ALLOWANCE

     This Exhibit is attached to and a part of that certain First Amendment to
Lease Agreement (the "Amendment") dated as of October 30, 1998, executed by and
between B.0. III, LTD.("Landlord"), and VIGNETTE, INC. ("Tenant"). Any
capitalized term used but not defined herein shall have the meaning assigned to
it in the Lease (as defined in the Amendment). Landlord and Tenant mutually
agree as follows:

1.   Space Plan.  On or before November, 1998, a space planner engaged by Tenant
     ----------
and approved by Landlord shall, at Tenant's expense, prepare and deliver to
Landlord a space plan for the Expansion Premises showing, regardless of the
quantities of such items, the location of all partitions and doors and the lay-
out of the Expansion Premises. Landlord will at all times cooperate with
Tenant's space planner (who shall be subject to the reasonable approval of
Landlord) to efficiently and expeditiously arrive at an acceptable lay-out of
the Expansion Premises. Landlord will approve or disapprove in writing the space
plan within three (3) business days after receipt from Tenant and if
disapproved, Landlord shall provide Tenant's space planner with specific reasons
for disapproval. If Landlord fails to approve or disapprove the space plan on or
before the end of such three (3) business day period, Landlord shall be deemed
to have approved the last submitted space plan. The foregoing process shall be
repeated until Landlord has approved (which shall include deemed approval) the
space plan (such space plan, when approved by Landlord and Tenant, is herein
referred to as the "Space Plan").

1.2  Compliance With Disability Acts.  Tenant has provided Tenant's space
     -------------------------------
planner with all information needed to cause the construction of Tenant's
Improvements to be completed such that Tenant, the Expansion Premises and
Tenant's Improvements (as constructed) will be in compliance with the Disability
Acts. TENANT SHALL BE RESPONSIBLE FOR AND SHALL INDEMNIFY AND HOLD HARMLESS
LANDLORD FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES AND EXPENSES
(INCLUDING, WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES AND EXPENSES) INCURRED
BY OR ASSERTED AGAINST LANDLORD BY REASON OF OR IN CONNECTION WITH ANY VIOLATION
OF THE DISABILITY ACTS ARISING FROM OR OUT OF (i) Tenant's employer-employee
obligations, or (ii) violations by Tenant and/or Tenant's Improvements or the
Expansion Premises not being in compliance with the Disability Acts.  The
foregoing indemnity shall not include any claims, liabilities or expenses
(including reasonable attorneys' fees and expenses) arising out of the
negligence or gross negligence of Landlord or Landlord's employees, agents or
contractors.

1.3  Construction Plans.  On or before fifteen (15) days after approval of the
     ------------------
Space Plan by Landlord and Tenant, a licensed architect reasonably acceptable to
Landlord (which architect may be the approved space planner if the space planner
is a licensed architect), at Tenant's expense, will prepare construction plans
and specifications (such construction plans and specifications, when approved by
Landlord and Tenant, and all changes and amendments thereto agreed to by
Landlord and Tenant in writing, are herein called the "Construction Plans") for
all of Tenant's improvements requested pursuant to the Space Plan (all
improvements required by the Construction Plans are herein called "Tenant's
Improvements"), including color and design schemes, detail and finish drawings
for partitions, doors, reflected ceiling, telephone outlets, electrical switches
and outlets and Building standard heating, ventilation and air conditioning
equipment and controls. Within five (5) business days after construction plans
and specifications are delivered to Landlord, Landlord shall approve or
disapprove same in writing and if disapproved, Landlord shall provide Tenant's
architect specific reasons for disapproval. The foregoing process shall continue
until the construction plans and specifications are approved by Landlord;
provided that if Landlord fails to respond in any five (5) business day period,
Landlord shall be deemed to have approved the last submitted construction plans.
Landlord hereby agrees that Landlord shall not be entitled to disapprove
construction plans except for the following reasons: (i) the construction plans
do not conform to applicable laws, rules and regulations, (ii) the construction
plans or specifications will not accommodate Building standard heating, cooling,
mechanical, electrical or plumbing improvements, (iii) the construction plans or
specifications do not conform to the Space Plan, (iv) the construction required
by the construction plans could in Landlord's judgment affect the structural
integrity or any structural member of the Building or any part thereof or
requires
<PAGE>

a floor of the Building to be cut through or in Landlord's judgment will
adversely affect existing Building standard heating, cooling, mechanical,
electrical or plumbing improvements in any part of the Building, (v) the design
and/or color of the improvements which can been seen from the Common Areas do
not conform to the design and/or color scheme generally found in other parts of
the Building, (vi) the work required by the construction plans affects the
exterior of the Expansion Premises or the Building, or (vii) the construction
plans are incomplete or contain material errors or omissions (collectively,
"Permitted Objections"). Tenant shall reimburse Landlord for the cost of
Landlord's architectural review of the Space Plan and the Construction Plans
within thirty (30) days of receipt of an invoice therefor.

1.4  Changes to Approved Plans.  If any re-drawing or re-drafting of either the
     -------------------------
approved Space Plan or the approved Construction Plans is necessitated by
changes (all of which shall be subject to Landlord's written approval) requested
by Tenant after approval by Landlord and Tenant, the expense of any such re-
drawing, re-drafting or re-reviewing by Landlord's architect required in
connection therewith and the expense of any work and improvements necessitated
by such re-drawing or re-drafting will be charged to Tenant.

1.5  Coordination of Planners and Designers.  If Tenant shall arrange for
     --------------------------------------
interior design services, whether with Landlord's space planner or any other
planner or designer, it shall be Tenant's responsibility to cause necessary
coordination of its agents' efforts with Landlord's agents to ensure that no
delays are caused to either the planning or construction of the Tenant's
Improvements.

1.6.  Building Standard Materials. Tenant shall use Building standard materials
      ---------------------------
in connection the design and construction of the Tenant's Improvements,
including without limitation, Building standard doors, frames, hardware,
lighting, ceiling tile and occupancy sensors.

2.   Construction and Costs of Tenant's Improvements.
     -----------------------------------------------

2.1  Selection of Contractor.
     -----------------------

     (a)  Landlord agrees to bid the construction of Tenant's Improvements to at
          least three (3) mutually acceptable general contractors (unless a
          lesser number is approved by Tenant) within two (2) business days
          after Landlord's approval of the Construction Plans. Landlord shall
          request that all contractors submit their respective bids within two
          (2) weeks after receipt of the bid package. Landlord shall also submit
          the Construction Plans for permit within two (2) business days after
          Landlord's approval of the Construction Plans.

     (b)  Landlord and Tenant shall jointly review any bids, and make
          adjustments in the bids, if necessary, for inconsistent assumptions in
          order to reflect an equitable comparison. Tenant shall select a
          contractor within two (2) business days after Landlord's receipt of
          all bids. Within three (3) business days after Tenant's selection of
          the Contractor, Landlord shall enter into a construction contract with
          the Contractor consistent with the terms of the bid to construct the
          Tenant's Improvements (the "Construction Contract").

2.2  Construction Obligation and Finish Allowance.
     --------------------------------------------

     (a)  Landlord agrees to construct Tenant's Improvements, at Tenant's cost
          and expense; provided, however, Landlord shall provide Tenant with an
          allowance up to $16.00 per square foot of Agreed Rentable Area in the
          Expansion Premises (the "Expansion Premises Finish Allowance"), which
          allowance shall be disbursed by Landlord, from time to time, for
          payment of (in the following priority) (i) the contract sum required
          to be paid to the general contractor engaged to construct Tenant's
          Improvements, which contract sum shall include without limitation, the
          costs of any and all payment and performance bonds required by
          Landlord in connection with the construction of Tenant's Improvements
          and any other costs incurred by such general contractor to comply with
          the construction requirements applicable to the Building (the
<PAGE>

          "Contract Sum"), (ii) the fees of the preparer of the Space Plan and
          the Construction Plans, (iii) payment of the Construction Management
          Fee (hereinafter defined), and (iv) such other costs related to the
          leasehold improvements (such as equipment, appliances and furnishings)
          as Landlord specifically approves in writing, it being understood that
          Landlord shall have no obligation whatsoever to fund any portion of
          the Finish Allowance for such other costs. Upon completion of Tenant's
          Improvements and in consideration of Landlord administering the
          construction of Tenant's Improvements, Tenant agrees to pay Landlord a
          fee equal to five percent (5%) of the Contract Sum to construct
          Tenant's Improvements (the "Construction Management Fee") (the
          foregoing costs are collectively referred to as the "Permitted
          Costs").

     (b)  Title to any equipment, appliances, furnishings or personalty
          installed in the Expansion Premises and purchased with any portion of
          the Expansion Premises Finish Allowance shall pass to Landlord upon
          payment of the invoice cost thereof and Tenant shall not remove any
          such equipment, appliances, furnishings or personalty from the
          Expansion Premises without Landlord's express, prior written consent
          or unless requested by Landlord in connection with the expiration or
          earlier termination of the Lease.

2.3  Excess Costs.  If the sum of the Permitted Costs exceeds the Expansion
     ------------
Premises Finish Allowance, then Tenant shall pay all such excess costs ("Excess
Costs"). Tenant agrees to keep the Expansion Premises free from any liens
arising out of nonpayment of Excess Costs. In the event that any such lien is
filed and Tenant, within ten (10) days following such filing fails to cause same
to be released of record by payment or posting of a proper bond, Landlord shall
have, in addition to all other remedies provided herein and by law, the right,
but not the obligation, to cause the same to be released by such means as it in
its sole discretion deems proper, including payment of or defense against the
claim giving rise to such lien. All sums paid by Landlord in connection
therewith shall constitute Rent under the Lease and a demand obligation of
Tenant to Landlord and such obligation shall bear interest at the rate provided
for in Section 15.10 of the Supplemental Lease Provisions from the date of
payment by Landlord until the date paid by Tenant.

2.4  Construction Deposit.  Tenant shall remit to Landlord an amount (the
     --------------------
"Prepayment") equal to the projected Excess Costs, if any, within five (5)
working days after commencement of construction by Landlord. Upon Substantial
Completion of the Tenant's Improvements in the Expansion Premises, Tenant shall
deliver to Landlord the actual Excess Costs, minus the Prepayment previously
paid. Failure by Tenant to timely tender to Landlord the full Prepayment shall
permit Landlord to stop all work until the Prepayment is received. All sums due
Landlord under this Section 2.4 shall be considered Rent under the terms of the
Lease and nonpayment shall constitute a default under the Lease and entitle
Landlord to any and all remedies specified in the Lease.

3.   Substantial Completion and Punch List.  The terms "Substantial Completion"
     -------------------------------------
and "Substantially Complete," as applicable, shall mean when Tenant's
Improvements are sufficiently completed in accordance with the Construction
Plans so that Tenant can reasonably use the Expansion Premises for the Permitted
Use (as described in Item 10 of the Basic Lease Provisions). When Landlord
considers Tenant's Improvements to be Substantially Complete, Landlord will
notify Tenant and within two (2) business days thereafter, Landlord's
representative and Tenant's representative shall conduct a walk-through of the
Expansion Premises and identify any necessary touch-up work, repairs and minor
completion items as are necessary for final completion of Tenant's Improvements.
Neither Landlord's representative nor Tenant's representative shall unreasonably
withhold his agreement on punch list items. Landlord will use reasonable efforts
to cause the contractor to complete all punch list items within thirty (30) days
after agreement thereon.

4.   Tenant's Contractors.  If Tenant should desire to enter the Expansion
     --------------------
Premises or authorize its agent to do so prior to Substantial Completion of the
Tenant's Improvements in the Expansion Premises, to perform approved work not
requested of the Landlord, Landlord shall permit such entry if:

     (a)  Tenant shall use only such contractors which Landlord shall approve in
          its reasonable discretion and Landlord shall have approved the plans
          to be utilized by Tenant, which approval will not be unreasonably
          withheld; and
<PAGE>

     (b)  Tenant, its contractors, workmen, mechanics, engineers, space planners
          or such others as may enter the Expansion Premises (collectively,
          "Tenant's Contractors"), work in harmony with and do not in any way
          disturb or interfere with Landlord's space planners, architects,
          engineers, contractors, workmen, mechanics or other agents or
          independent contractors in the performance of their work
          (collectively, "Landlord's Contractors"), it being understood and
          agreed that if entry of Tenant or Tenant's Contractors would cause,
          has caused or is causing a material disturbance to Landlord or
          Landlord's Contractors, then Landlord may, with notice, refuse
          admittance to Tenant or Tenant's Contractors causing such disturbance;
          and

     (c)  Tenant (notwithstanding the first sentence of subsection 7.201 of the
          Supplemental Lease Provisions), Tenant's Contractors and other agents
          shall provide Landlord sufficient evidence that each is covered under
          such Worker's Compensation, public liability and property damage
          insurance as Landlord may reasonably request for its protection.

Landlord shall not be liable for any injury, loss or damage to any of Tenant's
installations or decorations made prior to the Expansion Premises Commencement
Date and not installed by Landlord. Tenant shall indemnify and hold harmless
Landlord and Landlord's Contractors from and against any and all costs,
expenses, claims, liabilities and causes of action arising out of or in
connection with work performed in the Expansion Premises by or on behalf of
Tenant (but excluding work performed by Landlord or Landlord's Contractors).
Landlord is not responsible for the function and maintenance of Tenant's
Improvements which are different than Landlord's standard improvements at the
Property or improvements, equipment, cabinets or fixtures not installed by
Landlord. Such entry by Tenant and Tenant's Contractors pursuant to this Section
4 shall be deemed to be under all of the terms, covenants, provisions and
conditions of the Lease except the covenant to pay Rent.

5.   Construction Representatives.  Landlord's and Tenant's representatives for
     ----------------------------
coordination of construction and approval of change orders will be as follows,
provided that either party may change its representative upon written notice to
the other:

LANDLORD'S REPRESENTATIVE:

     NAME      Sam Houston or Ben Greider
     ADDRESS   2800 Industrial Terrace
               Austin, Texas 78758
     PHONE     (512) 835-4455

TENANT'S REPRESENTATIVE:

     NAME      Kenny Hilbig
     ADDRESS   3410 Far West Boulevard, Suite 300
               Austin, Texas 78731
     PHONE     (512) 502-0223
<PAGE>

6.   Building Shell.  Landlord shall perform the following Building shell work
     --------------
at Landlord's sole cost and expense:

     (a)  Building standard VAV system, rigid duct work, perimeter slot
          diffusers (excluding internal zone flex duct and supply grills).

     (b)  Building standard window treatments.

     (c)  Building standard ceiling grid installed with 2 x 4 ceiling tile
          stacked on the floor and 2 x 4 parabolic light fixtures at a ratio of
          1 per 90 usable square feet stacked on the floor.

     (d)  Sprinkler heads installed at 1 per 225 usable square feet.

     (e)  All Building common areas installed.