Staying the Course

Thanks to JDE, PeopleSoft plans three enterprise lines.

If Oracle Corp. succeeds in its planned $7.3 billion acquisition of ERP software rival PeopleSoft Inc., the company says PeopleSoft applications could lay dormant or be scrapped.

PeopleSoft is trying to show how different it can be with its acquisition of smaller enterprise resource planning company J.D. Edwards. True to its promise made when the $1.8 billion JDE acquisition was announced in June, PeopleSoft earlier this month laid out a road map for the integrated company that includes three product lines: PeopleSoft Enterprise, PeopleSoft EnterpriseOne and PeopleSoft World.

The two lead products going forward are PeopleSoft Enterprise, or PeopleSoft classic software for the enterprise customer, and PeopleSoft EnterpriseOne, which has a JDE core and is slated for the midmarket. PeopleSoft World will serve JDEs existing user base tied to the AS/400 platform.

Company size and industry will be the determining factors regarding which products customers should go with, according to PeopleSoft executives, speaking at an analysts event here this month.

"We had some degree of concern how this was going to be perceived, but we wound up at this product strategy through our customers," said Craig Conway, president and CEO of PeopleSoft. "Were not feeling any speed bumps as we match the best products by industry to the customer."

As a result of the integration of the two companies, PeopleSoft will roll out several new or enhanced applications including three next quarter: Corporate Real Estate Management, Supplier Relationship Management, and Plant Manufacturing & Advanced Planning. In the first quarter of next year, the company will roll out Asset Management.

Moving forward, PeopleSoft, of Pleasanton, Calif., also plans to support both its middleware relationship with BEA Systems Inc. and JDEs ensconced middleware relationship with IBM.

"PeopleSoft has always supported more than one vendor," said Ram Gupta, executive vice president of products and technology. "JDE has supported IBM as one tier. Going forward, we are all about bringing choice to the customer. Not only will we support IBM for EnterpriseOne, but we will extend support [with other vendors]."

In terms of architectural transformations over time, PeopleSoft contends that it will continue to maintain two product lines—its traditional one and the JDE one—but that it will somehow bring them together under a single architecture.

"We have two product lines today with different tool sets, and thats very sustainable," Gupta said. "The key thing is theyre both built on the same architecture, and key things can be done. ... We have no need to change the architecture or tool of either one of the application sets."

PeopleSoft user C.J. George still has questions about just how the two product lines will be maintained. "The customer bases are so different," said George, director of MIS at Data Transmission Network Corp., in Omaha, Neb. "Id be curious to see how they are going to mesh their applications, how they are going to mesh two code lines and maintain them."

PeopleSoft, which continues to ward off the hostile takeover bid from Oracle, of Redwood Shores, Calif., said its acquisition of Denver-based JDE would produce greater cost savings than it had originally projected as the integrated company jettisons jobs and office space. The company expects to cut 750 to 1,000 jobs next year, which is expected to save PeopleSoft $10 million to $15 million. That will leave the company with about 12,000 employees. Officials made a point of saying there will be virtually no cuts of developers, sales representatives and consultants.

With the merger progressing so well, PeopleSoft said it would have higher-than-anticipated 2003 revenues, with the final total coming in at a projected $2.15 billion to $2.18 billion. Sales for next year were pegged at $2.8 billion to $2.9 billion.

George is not too concerned about Oracles takeover bid for PeopleSoft. "[Oracle CEO] Larry Ellison stepped in it big time with this," he said. "I think he has done damage to Oracle in terms of what people think of the company. If Im going to do business with a company at that level, I need to be able to partner with it at a business level. ... There is a sense that you cant trust Oracle."