PeopleSoft has unveiled a number of new and revamped enterprise applications that it hopes will pull it out of its current sales trough and propel it back into a leadership position.
But while analysts are enthusiastic about the work the supplier has done so far on internet-enabling its existing enterprise applications and developing 59 new collaborative ones, they claim that its product suite still has some functional holes.
The PeopleSoft 8 suite, which is due to ship this September, comprises rewritten versions of the company's original client/server enterprise packages to make them server-based. They will support Java, XML and HTML and include role-based desktops to manage users' day-to-day activities.
PeopleSoft chief executive Craig Conway admitted: "In 1998 the company lacked innovation and leadership. In 1999 we faced adversity - we'd lead a pretty charmed existence until that time."
However, he said that during the past year PeopleSoft has increased its research and development expenditure to 27 per cent of its revenue. "It was a bet the company strategy. To claim true web architecture, we felt there should be no code on the client - that's what we've achieved," he said.
Some analysts are particularly impressed by PeopleSoft's efforts at making its latest packages easy to use. John Hagerty, services director at AMR Research, said: "I was pretty sceptical, but when I saw it I was really impressed. The work it's done on usability shows it really understands what users need in broadscale deployments."
Arthur Hochberg, chief analyst at Dataquest UK, added: "It's the most cohesive set of applications I've seen to date - certainly more so than SAP."
Customers are also happy. Olivier Farine, human resources project manager at French bank Societe Generale, said: "Users take a lot of convincing and we think PeopleSoft 8 will help us easily deploy applications, especially for self-service."
PeopleSoft's Conway is keen to play up the usability theme to try to differentiate the company from its two main competitors, SAP and Oracle. "We believe SAP is particularly vulnerable at this time. What Oracle has done is create screens that access client/server applications. We think our approach is superior," he claimed.
However, analysts warned that an elegant interface is not everything. "The interface goes a long way, but PeopleSoft still has to market this attractively," said Hagerty.
Conway acknowledges this view. "A superior interface doesn't necessarily mean a win. We expect to be a lot more aggressive in our marketing," he said.
As a result, the supplier has increased the size of its sales organisation by 30 per cent over the past two months and has embarked on an extensive advertising campaign.
At the same time as PeopleSoft announced plans to internet-enable its existing packages, it also unveiled 59 applications spanning areas such as customer relationship management, employee self-service and supply chain.
While they are functionally similar to many of the modules in the company's main product suite, Rick Bergquist, PeopleSoft's chief technology officer, said: "These are point solutions aimed at taking revenue from small vendors like Concur."
They will be sold as standalone applications but can also be integrated into PeopleSoft's main suite.
But some analysts argue that the packages still do not cater to areas such as supply-chain logistics, fulfilment and distribution. Jyoti Banerjee, chief executive of London-based TBC Research, said PeopleSoft has "announced nothing new" in regard to supply-chain execution products.
The real challenge for PeopleSoft, however, will be to execute on sales effectively. But Conway claims that the company is currently well positioned to do so and is keen to talk up its prospects.
"We've tried to get the analysts to accept that we'll exceed their current expectations for 2001. They're forecasting 45 cents. I think we could do 65 cents," he said.
The first test will come next week, however, when the vendor announces its second quarter results.
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