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PeopleSoft arms itself for mid-market melee with Microsoft

PeopleSoft has announced a partnership designed to score points in the mid-market, where Microsoft is preparing to make its entrance.


NEW ORLEANS -- At its annual user conference PeopleSoft Inc. announced an expanded professional services relationship with IBM Corp. to help mid-sized customers rapidly implement its CRM applications. The pact is further evidence that the biggest customer relationship battle today is not in the enterprise market, but in the middle market where Microsoft Corp. is poised to make its mark.

The deal calls for IBM to offer a fixed price, quick installation of PeopleSoft CRM, plus pre-configured hardware and database solutions on the Windows NT and Unix platforms.

IBM already works closely with PeopleSoft customers including Sears, Bausch and Lomb and Telstra and has also been named a winner of a PeopleSoft partner award.

PeopleSoft preview
PeopleSoft made several other product announcements at Connect 2002. Here are some software releases due out soon:
  • PeopleSoft Consolidations: Gathers information to respond to new corporate financial reporting requirements.
  • PeopleSoft Investor Portal: Digital dashboard gives investors access to financial information.
  • PeopleSoft Guardian: Hires, trains and deploys emergency personnel to a crime scene.
  • PeopleSoft PASS: Tracks and reports student visa holders.
  • PeopleSoft Project Portfolio Management: Identifies and manages ROI and risk for projects.
  • SRM for Industries: Customized vertical supplier relationship management solutions for six markets.
  • PeopleSoft AppConnect: Integrates multi-vendor applications.
  • However, the strengthened alliance is more significant for its timing than its substance. Microsoft is slated to release its own mid-market CRM applications by year's end and vendors are positioning themselves for a challenge from a deep-pocketed competitor in Redmond, Wash.

    Yet at Connect 2002, Pleasanton, Calif.-based PeopleSoft shrugged off the suggestion that the IBM alliance is a direct response to Microsoft. Executives admit their aim is to sell more CRM software licenses by appealing to the thousands of mid-market companies that have yet to implement the software.

    "We're looking down, Microsoft is looking up," said PeopleSoft president and CEO Craig Conway. He said his company will go after mid-market companies with $300 million in annual revenues while Microsoft targets smaller firms with as few as 25 users.

    Yet Conway didn't discount Microsoft's ability to win customers based on its marketing muscle and active resellers. "The only thing I envy with Microsoft is the channel," he said.

    Publicly, PeopleSoft executives seem unmoved by two recent acquisitions designed to help Microsoft shore up its CRM strategy: accounting applications firm Great Plains and Danish ERP supplier Navision. Conway said neither company is "winning any Academy Awards for [its] product."

    Gareth Herschel, research director with Stamford, Conn.-based Gartner, thinks Microsoft may have sparked PeopleSoft's interest in the mid-market, but that this latest announcement is less a matter of hearing "Microsoft footsteps as it is about grabbing low hanging fruit."

    Herschel said PeopleSoft has always been more interested in courting new customers than in focusing solely on its installed base of human resources and financials users. There are simply more potential CRM customers in the mid-market than there are remaining in the enterprise space, he added. Herschel said PeopleSoft will succeed in the mid-market if it doesn't off load too much to IBM and emphasizes its strength in helping organizations improve business processes.

    In the enterprise CRM arena, PeopleSoft has been noticeably quiet at Connect 2002. It did tout 75 new customers in the second quarter, including six companies who used PeopleSoft to replace software from market leader Siebel Systems Inc. Conway said PeopleSoft is in position to steal away Siebel customers when they're faced with an expensive upgrade to Siebel 7.

    Few details were offered about the next iteration of PeopleSoft's CRM software, PeopleSoft 8.8, which is due out by the end of the year. During his opening keynote, Conway did give the audience a quick glimpse of the revised user interface, which cuts down the number of clicks required to create a customer record from 12 to just three.

    "(It takes) seven clicks for Siebel 7," Conway said. "Not that I'm competitive."

    FOR MORE INFORMATION:

    The Best Web Links on PeopleSoft CRM

    Learn more about PeopleSoft 8.4

    Dig Deeper on Customer data management

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