According to a press release from July 11, PeopleSoft Inc., a leading
business applications provider, launched PeopleSoft 8, a new generation
of pure Internet e-business applications offering browser-based access
and open integration across enterprise boundaries. PeopleSoft claims to
have completely rewritten its applications for the Internet. The PeopleSoft
8 release includes PeopleSoft Customer Relationship Management (CRM),
Supply Chain Management, Human Resource Management (HRMS), Financials,
and Professional Services Automation (PSA), as well as other industry-specific
solutions. In addition, PeopleSoft announced availability of 59 newly
developed e-business applications that enable collaboration and commerce
with customers, employees and suppliers.
8 is powered by the PeopleSoft Internet Architecture, which the company
considers the industry's most open and scalable e-business platform based
on HTML and XML. The server-centric architecture may significantly decrease
cost by completely eliminating the need for software on the computing
device other than a standard Internet browser. PeopleSoft 8 eBusiness
applications are accessible via phone lines and wireless devices, have
the look and ease-of-use of popular web sites, and integrate quickly and
cost-effectively with third-party software. PeopleSoft claims its XML-based
open integration capabilities will allow organizations to seamlessly combine
PeopleSoft applications, such as CRM and Supply Chain Management, as well
as third-party applications, to create a tightly integrated enterprise.
Companies will be able to track orders from the point of contact with
customers whether via phone, fax, e-mail, or the web through order management,
procurement, and fulfillment to service execution.
is the first enterprise application vendor to deliver a pure Internet
solution," said Craig Conway, president and CEO of PeopleSoft. "PeopleSoft
8 is an entirely new generation of eBusiness applications, and represents
PeopleSoft's emergence as an Internet company."
also hopes its support for Unicode, a global language standard, will allow
customers to centrally manage implementations of PeopleSoft 8 in virtually
every modern language in a single database. This will possibly enable
multinational companies to better coordinate and streamline operations
while significantly reducing cost. The company claims that PeopleSoft
8 is also the first enterprise application to embed multi-language search
has embedded analytic capabilities into all PeopleSoft 8 applications,
empowering individuals to make quick, effective decisions and enabling
organizations to better predict and respond to change. PeopleSoft's award-winning
eBusiness analytic applications such as Customer Profitability, Workforce
Analytics, Supply Chain Analytics, and Balanced Scorecard deliver the
right information at the right time to customers, employees, and suppliers.
PeopleSoft also plans to tailor specific eBusiness industry solutions
for the Professional Services, Financial Services, Education, Government,
Consumer Products, Communications, High Technology, Utilities, Distribution,
and Health Care industries.
8 collaborative applications extend to PeopleSoft MarketPlace, a business-to-business
trading exchange where customers, suppliers, and employees can collaborate
and do business efficiently over the Internet. PeopleSoft MarketPlace
is live today with eProcurement for office maintenance, repair, and operations
(MRO) products and services. Future collaborative services are currently
scheduled to include direct procurement, resource management, benefits,
travel and expense, and recruiting. The solutions will enable strategic
decision-making by integrating PeopleSoft Enterprise Performance Management,
PeopleSoft's eBusiness analytics suite.
8 best-in-class applications can be hosted via PeopleSoft eCenter, PeopleSoft's
applications hosting service, which provides the industry's broad set
of integrated e-business applications, with single-vendor accountability
and an enhanced customer experience. Customers can also turn to one of
PeopleSoft's 12 certified Application Service Provider (ASP) partners
to host PeopleSoft 8.
PeopleSoft Internet Architecture was delivered in December 1999 along
with PeopleSoft's Enterprise Performance Management suite of eBusiness
analytic applications. PeopleSoft 8 is scheduled to ship in the third
quarter of this year.
PeopleSoft seems to have turned the corner. While most of its competitors
have been faltering during the recent turbulent times, with the exception
of Oracle and possibly SAP, PeopleSoft has returned to strong profits
and revenue. The bleak days of 1999 and the possibility of being toppled
by J.D. Edwards are a matter of the remote past.
company has also improved its traditionally low international market penetration,
with the international license revenue growing 31% year over year. Furthermore,
these upbeat results coincide with the winding down of its ambitious R&D
endeavors. PeopleSoft invested an exorbitant 27% of total revenue in R&D.
That investment is paying off with new product releases that indicate
the company is in sync with market trends.
PeopleSoft's latest product release, with an even more remarkable new
browser looking user interface, a completely redesigned Internet architecture,
and notable additional functionality, places the company as one of the
frontrunners in the next generation of e-business applications. Furthermore,
it stands a chance to currently be the only vendor, other than Oracle,
that can deliver a majority of the components of a complete e-business
solution with its PeopleSoft 8 suite.
impressive are its pervasive Business Intelligence (Analytics) components,
with dedicated complex analysis and reporting around many crucial business
areas including several new CRM components. Although the marketing, so
far, of its CRM acquisition has not matched the efforts of rivals such
as Oracle, Siebel and Nortel/Clarify, PeopleSoft's huge potential advantage
is the integration of its Vantive product to the back-office ERP system
that handles the vital internal processes so important to customers. For
example, sales and/or customer support representatives should know at
any time whether the supplies needed to make a product are in stock, so
they can accurately inform customers about a product's available-to-promise
new system allows manufacturers to get a 360-degree view of all their
customer relationships. It provides tracking and management of marketing
campaigns, the entire sell cycle, the fulfillment cycle, and customer
service. This kind of knowledge only comes from integrating CRM software
with back-office systems. Additional advantages of the Vantive product
are its ability to easily integrate with other 3rd-party ERP systems as
well as improved scalability (the company claims to be the first vendor
to support 20,000 users).
we have strong reservations towards about company's utilizing high sounding
words like "technology leap", there is a point in PeopleSoft's suggestion
that its competitors' (read Oracle and SAP) products were only Web-friendly,
rather than an Internet-only application. Early Web enabled releases from
both Oracle and SAP were a mere porting of client/server architecture
to the Internet (in other words, basically rejuvenated versions of the
existing Windows-like screens and forms).
PeopleSoft's announcement of 100% Internet connectivity with the elimination
of required client side software represents a new twist. Not only will
it speed application deployment time (browsers are free and often pre-installed),
it will allow access to anyone with a cell phone, hand held or browser
equipped machine, which is an attractive prospect for remote offices,
sales teams, and business partners. Also, PeopleSoft's architecture will
challenge competitors' offerings with advanced XML messaging and application
programming interfaces (APIs) options that promise to ease integration.
Other indisputable advantages of a browser are the ease of training and
use, as well as a broad-scale deployability.
believe that PeopleSoft is also in a good position to be a strong contender
in a number of industries. While this may not be the case in complex manufacturing
until the market witnesses the proven capabilities of its forthcoming
PeopleSoft 8 release, it certainly can compete in traditional service
industries with its human resources, financial, and now CRM and e-business
modules. It may also compete in distribution industries like Consumer
Packaged Goods (CPG) with its supply chain and logistics functionality
resulting from the Red Pepper purchase.
PeopleSoft has so far failed to exploit its purchase of Red Pepper several
years ago, its new tack of addressing manufacturers' needs may result
in far greater success. Namely, PeopleSoft has focused its manufacturing
solutions on only consumer packaged goods, high tech/electronics, and
wholesale distribution industries. It already has a strong customer base
within these industries, primarily with its financial and human resource
management systems, but also to a degree with its manufacturing and supply
may also help PeopleSoft in this particular endeavor is the change in
both the business applications climate and users' mindset. The times when
features and functions (bells and whistles) were the order winners are
over. The new selections fights are fought on the peripheries of ERP,
in the CRM, the supply chain management (SCM) and e-collaboration arenas,
with very sharp vertical focus. Assuming the forthcoming new manufacturing
functionality will not be significantly inferior, bundled with CRM capabilities
from its recent purchase of Vantive and with traditionally strong analytic
applications developed in house, PeopleSoft may turn out to be an adequate
contender in future manufacturing and material management software selections.
Nevertheless, PeopleSoft faces a number of notable challenges. Despite
a significant growth of PeopleSoft's license revenue in the last quarter
(37% compared to year ago), a more detailed look reveals things to not
appear quite so rosy. Namely, Vantive products have been the major license
revenue contributor (~26%), which means that PeopleSoft traditional breadwinners'
(HR and financial systems) revenues have shown below the market average
growth year over year. Moreover, the overwhelming impression is that Vantive
has not been utilized to its full potential either despite the fact that
the CRM market has been experiencing stellar annual growth.
PeopleSoft now has a strong management with an invigorated stance, and
is running a profitable business, it may be short-lived without sustaining
license revenue. The company has a reputation of squandering very promising
acquisitions away - the Red Pepper purchase from a few years ago being
one. A similar mistake with Vantive would be disastrous, particularly
since CRM is a part-and-parcel of the new economy giving PeopleSoft a
company's biggest challenge, without doubt, lies in creating marketing
awareness, promoting its new image, products, and the Web architecture
as well as in crisp sales execution. While PeopleSoft has more than tripled
its marketing budgets and is on the quest to beef up and focus its sales
organization, a poor market acceptance of PeopleSoft 8 or any early adopter
dissatisfaction could be very detrimental to the company's future. We
are concerned that betting mainly on enterprise performance management
(EPM) analytics and new product architecture, on top of its embellished
traditional product offering, will not suffice in the long run.
the number of additionally released applications (59) is impressive, the
product portfolio still shows serious functional holes, particularly in
its proverbial 'bogey' areas like manufacturing and supply chain management,
where its competitive position is not going to improve dramatically very
soon. To that end, the company has also implemented a Baan Voyage program
to encourage companies to trade in Baan's products in place for PeopleSoft
PeopleSoft's weak complex discrete manufacturing functionality (which
is Baan's strength on the other hand) we do not regard the company's offer
to discount only $100,000 off the implementation costs (which would only
be a negligible fraction of the total cost of ownership, never mind the
pain of switching to another system per se) as very compelling. In a case
where its functionality could come close to Baan's (e.g., in flow manufacturing),
the company should offer its software for a significantly discounted license
price in order to boost the number of its manufacturing reference sites,
which is currently only a measly couple of hundred.
impediment to PeopleSoft's immediate success may be the market's generally
low awareness of the Internet-only architecture advantages. At this stage,
users mainly require the look and feel of the Internet and, therefore,
other Web-enabled products may not be seriously disadvantaged while competing
against PeopleSoft 8.
Oracle and SAP have already significantly improved their latest product
releases and there is every reason to believe that they may eliminate
the PeopleSoft architectural advantages very soon. And this is aside from
Lawson Software that has long been acclaimed for its advanced product
architecture and superior user interface. Furthermore, the client/server
architecture is still far from being dead. There is a great likelihood
that client/server and Internet architectures will coexist for the long
time to come until interruptions and Internet instability are tremendously
one wants to be nit picking he/she may notice that even PoepleSoft's entire
product suite does not exhibit an identical look and feel across the board.
Namely, its Vantive CRM suite still requires Java virtual machine and
will hopefully be rearchitected for the Internet and fully integrated
within the suite at some point in the future. This flies in the face of
the company's recent lambasting of competitive products. Moreover, it
may also prove to be a serious drawback, given that CRM is often the driving
force behind e-business projects.
SAP and Oracle, PeopleSoft should also carefully reevaluate its product
migration strategy from current product instances (7.5 and earlier), in
order not to alienate and disillusion its loyal customer base. PeopleSoft
8 has allegedly disconcerted some users because its licensing model requires
that existing customers re-license its older software, rather than pay
a lower upgrade charge as with previous updates. Some customers may see
this as only another hefty investment with little added value other than
improving user interface. The competitors are only begging for a surge
of similar news.
addition, SAP's recent $250 million joint development alliance with Commerce
One Inc. may derail PeopleSoft's own technology alliance with the same
marketplace vendor. PeopleSoft Marketplace is its e-procurement suite
for which Commerce One's MarketSite technology is used to power content
management, auctioning, and searching, with the initial target markets
to be professional services, educational, and financial services. Future
collaborative services are said to include direct procurement, travel,
benefits, resource management and recruiting. PeopleSoft may now be forced
to develop its own marketplace technology as a result of the SAP deal.
PeopleSoft's small customer base within discrete manufacturers can further
aggravate its marketplace initiative dubiousness given that these are
the prevalent users of Internet collaboration.
Existing PeopleSoft customers should certainly consider the new offering,
but avoid selecting it without looking at what the other vendors have
to offer. We recommend identifying your clear e-business strategy and
conducting a thorough comparison-shopping, at least for the negotiation
leverage sake. Contact PeopleSoft sales representative for more information
on PeopleSoft 8 and request a list of recent customers and ask them about
users of PeopleSoft client/server-based products may want to inquire about
PeopleSoft's future product support and/or migration strategy. Beware
of a potentially hidden cost of a migration. In order to preserve the
existing customers' business rules, a certain amount of application logic
must be "mapped" into XML. For customized applications this could represent
a significant amount of coding and require a complex understanding of
the business rules. Find out what resources are required to preserve the
business rules and most importantly, who pays for it. Additionally, by
shifting much more processing power to the application server side, PeopleSoft
8 may require much more hardware processing power of the application server
compared to its preceding releases.
for potential customers, PeopleSoft remains a very strong contender in
enterprise application selection processes within the following industries:
utilities, healthcare, service providers, financial institutions, public
sector, insurance, higher education and consumer packaged goods. It should
be on a short list in any selection where HRMS system, financial modules,
and e-business/self-service are the main pillars of an enterprise application.
However, since the company has been touting the significant manufacturing
and supply chain product enhancements within its new release, which is
due later this year, current and potential users are advised to inform
themselves about these, particularly in the above-mentioned industries
of focus. Furthermore, companies outside of above-mentioned industries
may benefit from evaluating PeopleSoft's product components on a stand-alone
basis for their e-business needs and leverage that information against
other vendors in the selection.
considering extended ERP applications (both web based and network dependent)
should consider all options, although PeopleSoft's activities are promising.
The notion of a full Internet based solution could save time and money
on the integration. An additional consideration might be the complete
outsourcing of the ERP application with an Application Service Provider
(ASP). Consideration should also be given to the products availability
and endorsement of "web standards." Should a different XML standard be
adopted (industry wide) after installation, identify who will be responsible
for accommodating the change and what measures have been engineered into
the application to support evolving standards.
with all new releases, users should employ a critical approach in their
evaluation of PeopleSoft 8 and require all potential vendors to demonstrate
specific business processes. Though demonstrations do not guarantee a
trouble-free implementation, they can go a long way toward helping users
understand how the software might behave in their environments. Future
clients are also advised to request the company's written commitment to
promised functionality, length of implementation, and seamless future
upgrades, particularly for recently announced offerings.