Technology Evaluation Centers

PeopleSoft: Giving Fervent Hope To The Market And Jitters To The Competition. Part 1: The News

P.J. Jakovljevic - 6/26/2001

Part 1: The News
P.J. Jakovljevic - June 26, 2001

Event Summary 

PeopleSoft is seeking to make bigger strides in the CRM, SCM and B2B software markets with its recent spate of product releases. The rhetoric and hype aside, the fact is that PeopleSoft has become a fearsome enterprise applications provider. PeopleSoft has joined the elite group of vendors that can deliver a majority of the components of a complete e-business framework. If one considers all aspects of a CRM or SCM evaluation, PeopleSoft has earned the license to be evaluated along with market leaders. Possibly more encouraging is PeopleSoft's upbeat prediction for the rest of the year, optimism only a few of its competitors can currently exhibit.

While Wall Street praises the vendor's new product initiatives and its strong first quarter results and optimism for the future, its direct competitors are far from feeling easy.

About this Article: This is a two part note, the first part discusses the news from PeopleSoft about new products and its first Quarter results. Part two discusses the Market Impact of this news and how it affects Users.

Product Bonanza 

Recently, PeopleSoft (NASDAQ: PSFT), one of the largest business applications providers, launched a spate of new product releases with an idea to bolster its foray into customer relationship management (CRM), supply chain management (SCM) and business-to-business (B2B) collaboration areas and to give a pause to respective leading software vendors. PeopleSoft is seeking to make a bigger brand name in these markets where it traditionally had low market recognition.

Customer Relationship Management

On June 4, PeopleSoft 8 CRM, a comprehensive Internet-based solution, made its debut at the PeopleSoft Leadership Summit 2001 in Las Vegas. PeopleSoft cites that its pure Internet architecture, embedded analytics and seamless integration of enterprise data and business processes will change the paradigm of CRM and propel it to the forefront of the industry. PeopleSoft 8 CRM's pure Internet technology should allow for universal access from any Web device, anywhere in the world, at any time, while the embedded business analytics should provide real-time insight into critical business processes. The support for multiple platforms brings a true collaborative spirit to the enterprise, integrating business processes between applications inside and outside enterprise boundaries. Connecting marketing, sales, and customer service to supply chain, financials and human capital management systems, PeopleSoft 8 CRM might be able not only to fulfill customer requests, but to also anticipate customer expectations.

"Today, we have delivered on our promise to bring a complete, pure Internet CRM solution to market," said Craig Conway, PeopleSoft president and CEO. "We completely re-architected our existing CRM applications to create a best-of-breed CRM solution based entirely on pure Internet architecture. No other vendor can offer customers this level of access and collaboration in a CRM solution."

PeopleSoft 8 CRM has long been aggressively announced and eagerly anticipated and, as a result, it already has the following key strategic alliances in place:

  • Cap Gemini Ernst & Young is extending its offerings within the PeopleSoft practice to provide business consulting and implementation services for PeopleSoft 8 CRM.

  • KPMG Consulting revealed its role in the launch of PeopleSoft 8 CRM for Communications, a billing-integration solution exclusively for the communications market. KPMG will be providing implementation and support services for the software.

  • PeopleSoft 8 CRM on it primary IBM DB2 database software is available across all PeopleSoft-supported operating systems. As a result, PeopleSoft 8 CRM on DB2 is available on IBM AIX, zOS, OS/390, Sun Solaris, HP-UX and Windows NT.

  • Deloitte Consulting will leverage its CRM business process experience with its PeopleSoft implementation skills and methodologies to help customers maximize the return on their PeopleSoft 8 CRM investment.

Generally available on June 29, the PeopleSoft 8 CRM suite includes Sales, Marketing, Field Service, Help Desk, Interaction Management and Support applications. PeopleSoft currently expects to deliver the following 10 languages within thirty days of general availability: French, French Canadian, German, Spanish, Italian, Dutch, Japanese, Brazilian Portuguese, traditional Chinese (Taiwan) and Swedish. While IBM DB2 is the primary development platform for PeopleSoft 8, it will also support Microsoft SQL Server and Oracle databases on IBM mainframe, UNIX and Windows NT platforms.

E-Procurement

On May 30, PeopleSoft announced new functionality for PeopleSoft 8 eProcurement that will automate the entire purchasing process from requisition to payment, giving employees self-service capabilities to purchase goods and services. Business intelligence (analytics) will enable purchasing managers to strategically evaluate every aspect of the procurement cycle, including their spend by category, the value of their suppliers, and the effectiveness of their workflow. Based on information provided by the analytics, organizations should be able to quickly renegotiate deals with key suppliers, driving bottom-line savings. In addition, organizations might be able to modify procurement methods in real-time to improve operational efficiency.

Supplier Relationship Management

The PeopleSoft 8 Supplier Relationship Management (SRM) suite, which should allow business partners to communicate their inventory, design and buying plans over the Web through a roles-based, collaborative portal, was announced generally available on May 29. As a follow up to this product, PeopleSoft plans the release in Q1 2002 of new sourcing application, which should let buyers search for suppliers and buy direct materials online over the Web. Embedded analytics should again help organizations evaluate the strategic value of their suppliers by providing insight into key supplier performance metrics.

With the ability to access critical performance indicators almost instantaneously, companies could continuously monitor their business processes ensuring effective management of supplier relationships across the enterprise. PeopleSoft 8 SRM utilizes PeopleSoft's advanced portal technology, bringing an organization's customers, suppliers, and employees directly into critical day-to-day business processes. Possible benefits of real-time interaction could be: reduced costs in product design; improved time to market; and faster response to changes in customer demand.

SkillsVillage Acquisition

On May 1, PeopleSoft acquired services procurement vendor SkillsVillage for $32 million in stock and cash. The company hopes that adding SkillsVillage's system for locating and hiring services and contingent staff will be a strong enhancement of its proverbially strong human resource (HR) product. The addition of the SkillsVillage functionality should provide PeopleSoft with the opportunity to offer an end-to-end system for the sourcing, selection, administration, and management of enterprise services.

Upbeat Results 

These initiatives come in the wake of the company's spectacular quarterly results. On April 25, PeopleSoft announced record financial results for the first quarter ended March 31, 2001. Total revenue increased 34% over $375.3 million in Q1 2000 to $503 million, which was the highest revenue in the company's history and the fourth consecutive record quarter (See Figure 1).

Figure 1.

The company touted continued market demand for its collaborative enterprise applications, citing significant wins against its competitors in the first quarter in all product lines and across all geographies. New customers made up 37% of license revenues, which is an 11% increase from the last quarter. First quarter license revenue grew up 70% to $153 million, compared to $ 90.2 million a year ago. Service revenues rose 22% over the same quarter of last year to $319 million as customer adoption of PeopleSoft 8 drove increased demand for the company's consulting business. Net income from recurring operations increased sharply, rising 212% to $36 million, up from $11 million in the same quarter of 2000.

This concludes Part one of a two part note. Part two discusses the Market Impact of this news and how it affects Users.