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PeopleSoft rights its customer software ship

After lagging behind rivals, the software maker wins analysts' applause for its latest applications focused on managing customer relationships.

After lagging behind rivals in the lucrative market for front-office software, PeopleSoft is winning analysts' applause for its latest applications focused on managing customer relationships.

PeopleSoft is set to unveil Monday additional features and applications that will round out PeopleSoft 8 CRM, its newly introduced collection of customer-relationship management software. CRM software helps a company manage its front-office operations--that is, sales, marketing and customer service.

At its leadership summit in Las Vegas next week, PeopleSoft will trumpet the Internet-based framework it has developed to support its CRM applications, meaning that companies can access any of the applications via a Web browser.

The company is also going to reveal analytics software that will be embedded in different components of the applications so that companies have a way to analyze important data--to find out, for example, who their most profitable customers are or to better forecast sales cycles to match production and demand. The complete set of applications will be generally available in late June.

Although the software maker has been unveiling parts of PeopleSoft 8 CRM over the past year, "this represents the final phase of completing the development of pure Internet solutions for CRM," said Stan Swete, vice president of CRM for Pleasanton, Calif.-based PeopleSoft.

The company is finally making a huge splash in the sector, analysts say.

"PeopleSoft is throwing down the gauntlet and saying, 'We're here,'" said Meta Group analyst Sam Clark. "PeopleSoft is saying, 'You may have thought we disappeared, that we were no longer a player, but we are a player as much as anyone else is, as much as Siebel, as much as Oracle. We intend to compete.'"

The company has been criticized for being slow to offer customers a complete line of CRM software--an area that rivals Oracle and SAP have been zeroing in on over the past two years. Though it has taken a while to reach completion, analysts are optimistic that with the official release of PeopleSoft 8 CRM, the company will gain momentum with customers.

"This is a significant marketing message," said Joanie Rufo, an analyst with AMR Research. "It needs to be."

Getting the deals
Rufo said PeopleSoft has done a good job entering the market with a competitive line but now needs to focus on actually landing sales. The company needs to "get to the plate more, making sure their sales force is getting into the deals," she said.

PeopleSoft competes against market leader Siebel Systems, along with business-management software giants Oracle and SAP. Though both Oracle and SAP spent time developing their own CRM applications, PeopleSoft in October 1999 acquired Vantive, a niche player in the CRM sector, to get ahead in the market. But critics questioned the marriage and were perplexed by PeopleSoft's plans.

"They initially didn't do a good job articulating what they were going to do" with Vantive, said Meta's Clark. "The market didn't respond exuberantly to the acquisition. Most folks were not thrilled. It was a question of marketing, and there was also the technology concern."

Now, however, PeopleSoft 8 shows the results of the company's diligence in working out the kinks, Clark said. "We think we should consider them on our shortlist."

Since last year, PeopleSoft has made huge investments rewriting Vantive's products for the Web and has begun releasing parts of its CRM suite. PeopleSoft 8 CRM houses several major categories, including help desk, call center, sales force automation, field service, marketing automation, analytics and customer interaction.

PeopleSoft is also nearing the one-year anniversary of its long-awaited collection of Internet-based business applications, PeopleSoft 8, which has been two years in the making.

In recent research notes, Lehman Brothers analyst Neil Herman wrote that the release of PeopleSoft 8 has "reignited" interest in the company's products.

"PeopleSoft indicates that when invited to a (CRM software) deal to compete head-to-head vs. Siebel, the company wins about 50 percent of the time," Herman wrote. "The new products, combined with the heightened level of sales and marketing activities, should help PeopleSoft get invited to the party more frequently."

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