A report from Giga Information Group has suggested that Peoplesoft may find 1999 a very tough year, and that rival Oracle could be the beneficiary of its new product direction.
But the study follows a similar one issued by IDC last year that confirmed Peoplesoft had leapfrogged Oracle into the number two position in the enterprise resource application (ERA) market.
IDC tracks annual licence revenue figures and growth in the ERA sector, but also looks at engineering and point product providers. And its latest analysis showed that in non vertical markets, Oracle and Peoplesoft have swapped places, with Peoplesoft assuming the lead.
During 1998, the market research firm said Peoplesoft achieved the highest rate of licence revenue growth in its sector at 59 per cent, overtaking Oracle, which it claimed grew 23 per cent.
Mark Lane, Peoplesoft?s vice president of global marketing, said: ?Last year, there was daylight, this year, we?ve created a yawning chasm.?
According to Giga, however, Peoplesoft?s growth forecast, while modest at 20-30 percent, faces many problems. This is in sharp contrast to Oracle, which, in its last fiscal quarter, showed applications revenue growth of 19 per cent compared with Peoplesoft?s three per cent.
James Holincheck, an analyst at Giga, said that Peoplesoft?s growth rates could easily stagnate during the first half of this year. Its human resources and financials packages are the only strong selling products, while its Red Pepper manufacturing module is a minnow and is not winning as much business as even the trouble hit Baan.
Holincheck was particularly concerned that as Peoplesoft moves towards a greater reliance on services in the wake of falling license sales, services may not be able to grow quickly enough to fuel overall growth. And he sees competition coming in many forms, principally in the customer relationship (CRM) and supply chain management (SCM) markets.
?Peoplesoft does not have its own CRM solutions?If Peoplesoft had bought Vantive, it might have another higher growth revenue stream to lean on in 1999,? he said.
Holincheck was also concerned that, by its second fiscal quarter, the company may struggle to keep its pipeline of sales growing and that products coming out of its Momentum research and development spin off may be too late ?to contribute much to 1999 revenue.?
Peoplesoft countered the doom and gloom, however, by saying it was more concerned about its third and fourth quarters.
Lane explained: ?Everyone?s worried about Q1 and 2. I?m not, but I don?t feel comfortable looking out past six months. But we?ll have products for the Peoplesoft Business Network sooner rather than later, and I think there?s a good chance that Momentum led Internet products will get us sales this year.?
However, he conceded that the firm?s sales effort would concentrate on Peoplesoft?s traditional products, augmented by enterprise planning management in the first instance.
Peter Dunning, Oracle?s senior vice president of worldwide applications, on the other hand, said: ?Peoplesoft looks vulnerable. We can sell with many point solutions it cannot offer. It?s stuck with just doing ERA.?
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