Peoplesoft is looking to acquire a front office applications supplier in the near future and is already in discussions with five organisations, including sales and marketing software supplier Siebel, and helpdesk vendor Vantive.
The human resources and finance package vendor also sees its relatively new manufacturing and supply chain applications as the major internal growth areas for the future and hopes to make the division a $1 billion business unit in the forseeable future. It is currently the second largest in the company because revenues include any applications sold to manufacturing organisations as well as the packages themselves.
Dave Duffield, Peoplesoft?s chief executive, said: ?There are more acquisitions in the works and we?re interested in front office applications. Five chief executives have expressed an interest in their companies being acquired in the front office market. We are studying the market and we will be in this business. Siebel and Vantive are two of the companies we are looking at.?
But, the company is equally upbeat about internal growth in the manufacturing sector.
Jeff Carr, Peoplesoft?s vice president and general manager of manufacturing and supply chain management, said: ?This area is key to the company?s success long term, and in the short term we want to be number two in this sector. This is the newest endeavour for the company. I know we?re late to the game and our rivals have been there for 10-15 years with their installed bases, but I believe we?ve crossed the chasm in getting recognition and showing results to a conservative industry.?
He added that version 7.5 of the applications, which started shipping a couple of weeks ago, were key to the firm?s ambitions in this space because ?they give us the credibility to compete where we couldn?t before. Version 7.5 offers us the ability to go after global deals".
Peoplesoft has been slated in the past for its lack of international support and has consistently failed to make significant inroads into the European market as a result.
Ron Codd, senior vice president of finance and chief financial officer, admitted, however: ?We won?t see manufacturing sales in Europe until the fourth quarter. We don?t expect 7.5 to have a dramatic impact overseas. They haven?t had it to sell until recently, but we want it to impact in the third or fourth quarter. We now have a truly global product. We are playing catch-up. We had nothing before, but a decent human resources product.?
Carr refused to be drawn on how many manufacturing applications customers the company had worldwide, saying the figure was more than 20 and less than 100. It admitted to having 21 last year, but is now hoping to woo disgruntled Oracle customers, who ?will have to spend money reimplementing the new version of the applications. So why not upgrade to Peoplesoft, particularly in Europe?? he asked.
The firm is also going to focus on trying to sell the packages to its own installed base. Between a third and 40 per cent of all its manufacturing software sales are currently made to existing customers, but Carr said: ?We have not been aggressively selling back to the installed base until this year. We?re attracted to the high end of the market, but we also see a huge opportunity in the middle market too.?
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