PeopleSoft Joins ERP Stampede to the Web

• 08/16/2000

PeopleSoft is joining competitors SAP AG (www.sap.com) and Oracle Corp. (www.oracle.com) in shifting its application functionality to Web middleware.

Previously, PeopleSoft applications ran on a two-tier architecture -- from database server to Windows-based workstation. The company has now added a middle-tier Web server to handle most of its front-end processing. "It's the end of our client/server applications. A hundred percent of our applications have been redesigned to run over the Internet," says Jim Littlefield, director of marketing for PeopleSoft's Internet Architecture.

According to Littlefield, PeopleSoft has rewritten all 108 of its existing applications to a Web-server format, including such stalwarts as human resources, payroll, supply chain management, and manufacturing scheduling. "This involves over 14,000 Windows panels that have been redesigned for Web access," Littlefield says. As before, PeopleSoft applications continue to be built on top of a Tuxedo infrastructure from BEA Systems Inc. (www.beasys.com).

Additional features include PeopleSoft MarketPlace, a business-to-business trading exchange that includes online procurement functions, and an application hosting service. The first pieces of the new architecture -- PeopleSoft's Enterprise Performance Management site -- were delivered in December 1999. The entire PeopleSoft 8 package is scheduled to ship in the third quarter of this year.

While this portends a major migration for the company's current installed base, Littlefield promises that the transition will be as smooth as possible. "PeopleSoft has always offered an upgrade path for customers," he says. "We've never left any of our customers behind on old technology."

PeopleSoft has added 59 new applications to its suite, primarily in the area of analytic and business intelligence applications, Littlefield says. As part of these new applications, PeopleSoft now offers a data warehouse, and includes a number of Web self-service applications.

PeopleSoft now offers a broader range of products to compete more effectively with SAP and Oracle. "The real value is that, typically, our customers have had to go out to third-party vendors for products and integrate them back into PeopleSoft," Littlefield says. "PeopleSoft now takes a best-of-breed approach to building applications. We can compete on-par with the new types of applications with a common architecture that runs throughout our product line. We've built an architecture that supports a wide variety of applications and still provides integration throughout the different products. Our average customer doesn't want to have to deal with multiple application architectures."

Analysts agree that the moves are good for PeopleSoft. "Because of the internet-enabling feature of these new applications -- in ERP, CRM, supply chain, and trading exchanges -- PeopleSoft may have somewhat leveled the competitive field," says Shams Mahmud, research analyst at IDC (www.idc.com). "Many of the best-of-breed companies claim that their products have easy Web-integrated features. PeopleSoft also asserts that its applications will do the same. Since their user base is substantially higher than some of the smaller outfits, IDC expects that PeopleSoft will be a formidable competitor to the best-of-breed software vendors."

But the role of Vantive as PeopleSoft's CRM component is still unclear, Mahmud warns. "There is an element of uncertainty regarding the extent of integration of the CRM application with the new release," he explains. "It may very well be that PeopleSoft did not have enough time to seamlessly integrate its Vantive CRM application with its new application development. This should become clear within the next two quarters."

The loyalty of PeopleSoft's customer base will give PeopleSoft breathing room in this area, says Katherine Jones, analyst at Aberdeen Group Inc. (www.aberdeen.com). "Their customers are so loyal, that even when PeopleSoft previously showed no signs of having a CRM application on horizon, the customers said they'll just wait for them." Plus, at this point, Vantive has "already been kind of integrated, because [PeopleSoft and Vantive] have been in the same sites together for the past two years," Jones says. "That's a perfectly adequate and at least fairly competitive solution -- more complete than we see in some of the other ERP vendors today. You can't fault them for lacking in functionality."

Analysts are divided over whether the vendor's entry into the Internet space trails behind its competitors. For instance, SAP has been roundly criticized for its late adoption of Internet technologies. PeopleSoft "is months behind SAP in terms of releasing an internet-style infrastructure for its applications," says IDC's Mahmud. In addition, Mahmud points out that the company is more than a year behind Oracle, which launched its Internet-enabled Oracle 11 applications suite more than a year ago.

Other analysts say PeopleSoft is right on the mark with the pace of Internet development among its customer base. "The PeopleSoft customer base is a fairly large and loyal number of users, and [PeopleSoft's] offering is in keeping with the timeframes that those people require," Jones says.