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PeopleSoft exec: JDE is key to midmarket road map

There's no question that PeopleSoft Inc.'s acquisition of Denver-based J.D. Edwards & Company will create an enterprise applications force to be reckoned with. The companies have a combined $2.8 billion in revenue, 13,000 employees and 11,000 customers in 150 countries. Executives are still sketching the product road map -- including any CRM synergies. News editor Jon Panker talked with Nanci Caldwell, chief marketing officer at Pleasanton, Calif.-based PeopleSoft, to get a better idea of how the merger will take shape.

It took a few years for technology from the Vantive acquisition to be fully integrated. What is the timeline for any integration between PeopleSoft and J.D. Edwards software?
There is already integration capability between the products based on our pure Internet architecture and Web services. There isn't a plan for integration that we're ready to announce, but you can bet that you're going to see a lot more integration between the product lines. We aren't at the point of being able to get down to talking about individual product modules. As a philosophy, PeopleSoft has always wanted to integrate with other vendors. With this acquisition, you'll see that integration accelerate. If I'm an existing PeopleSoft or J.D. Edwards shop, how does this acquisition affect me?
At this stage of having announced the acquisition and looking to Q3 or early Q4 as the close date, I can tell you we'll be doing work now to answer the questions that customers have. We have a loyal customer base at PeopleSoft, and J.D. Edwards has a very loyal and happy customer base, too. We are very committed to the AS/400, which is an important part of J.D. Edwards' midmarket strategy. We intend on supporting customers and not forcing them to move from platform to platform. How does this acquisition fit into your overall midmarket strategy, which the company seems to have been emphasizing a lot lately?
First of all, you have to remember that we [and J.D. Edwards] do not play in the midmarket now in the same places. We play in the services industry; they play in manufacturing, distribution and asset intensive industries. With the acquisition of J.D. Edwards, we believe we can accelerate around the midmarket. It gives us a really big footprint. One out of three of our new customers for the last 12 month has been [in the] midmarket. It's been a successful and growing part of our business. This is a chance to accelerate our focus on the midmarket and bring some technology and tools to the midmarket, particularly around speed of implementation -- including some of the ways they've built automation. We have said for the last nine to 12 months that [the] midmarket is very important to us. This acquisition, amongst other things, reinforces that. Will the company maintain two distinct product lines?
We have not answered all those questions yet, as you can imagine. Certainly, we'll be working through the product road map. We don't have plans now that say we're going to merge them into one product line. We're going to have an analyst call later in June to discuss more of our product plans in detail. What type of organizational synergy should we expect once the companies are combined?
We anticipate the acquisition to be accretive to PeopleSoft in 2004. To do that, we need to take $80 million out of the combined cost structure of the two companies, which is $2 billion. There will be opportunities in G&A for operational efficiencies. There are opportunities, as you look at where we're [both] located worldwide. I don't mean from a people perspective, but [from] the fact [that] our footprints (or physical locations) are the same. Does this deal help you compete more aggressively with SAP, which already has strength in the manufacturing and distribution sector?
This puts PeopleSoft clearly in the No. 2 position in terms of enterprise application software vendors -- particularly internationally. We have a lot of scale in the U.S. We've been larger than SAP in the U.S. Internationally, that's where we've wanted to grow. So this acquisition gives us a lot more scale in these international regions, with more feet on the street and more presence in those markets. The combination of the manufacturing and distribution capabilities, added to our strengths in supply chain and supplier relationship management, is going to be very strong in terms of the value proposition here and internationally. Around [the] midmarket, our footprint is very broad now. Will there be layoffs?
The plans I talked to with respect to the $80 million does not involve layoffs, and we announced no layoffs today.

FOR MORE INFORMATION:

PeopleSoft to acquire J.D. Edwards

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