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PeopleSoft adds Distinction to supply chain software

The maker of business software is acquiring Atlanta-based Distinction Software in a stock and options trade worth $5 million to $10 million.

PeopleSoft wants to add a bit of Distinction to its supply chain management software--as much as $10 million worth.

The Pleasanton, California-based maker of business software announced today it is acquiring Atlanta-based Distinction Software in a stock and options trade worth $5 million to $10 million.

Distinction makes supply chain planning software for high volume manufacturers.

PeopleSoft released in March, Version 1 of its demand planning product, a product that lets companies forecast demand for their products so they can more efficiently manufacturer goods. At the time, PeopleSoft had its sights set on the high tech industry and designed the product to handle the business of its Silicon Valley neighbors.

"We knew we didn't have the development bandwidth to go after the consumer product marketplace. That was not a major target for us," said David Obershaw, PeopleSoft's vice president of marketing for manufacturing. "But then we started to target it more. We found ourselves in a situation where we had a lot of customers who needed high volume capability in a demand planning product. We needed to find a creative way to get to release 4 or 5, quickly."

So, PeopleSoft went shopping.

Industry analysts have speculated that the leading enterprise resource planning application vendors like PeopleSoft, Oracle, and Baan, would begin eyeing supply chain planning vendors for acquisition in an effort to catapult their technology.

Names batted around include top players in the field like Manugistics and Logility, but PeopleSoft chose to go small.

"We didn't want to digest a big company," Obershaw said. "Distinction only has 25 people in the company to assimilate and they were on release 4 of their product."

Currently Distinction runs on Microsoft products. PeopleSoft's plan is to release, in the first quarter of next year, a version of Distinction's product that is integrated with Hyperion's Arbor Essbase multidimensional analytical processor that PeopleSoft has integrated into its supply chain planning product.

Then in the summer, PeopleSoft plans to release versions of Distinction's product that run on a variety of database platforms including Oracle and Microsoft SQL Server.