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PeopleSoft ahead of schedule

The company will do something virtually unheard of in the software business: ship software six months early.

PeopleSoft (PSFT) said today that it will do something virtually unheard of in the software business: ship software six months early.

The company said it has shaved about six months off the delivery date of its PeopleSoft 7 suite of business applications.

The software is scheduled to roll to market in September, not in first quarter of next year as the company had announced. The release will build on Internet features that the company introduced late last year in PeopleSoft 6, said Rick Bergquist, PeopleSoft's vice president of technology, in a conference call today.

"This is really new technology, and we want to get it into the hands of our customers as soon as possible," he said. "We feel confident that we can deliver it on time."

The company has overhauled its two-tier architecture in favor of a three-tier Internet-centric approach that uses BEA Systems' Tuxedo as the middleware connecting the PeopleSoft applications server with client software. The Tuxedo layer will allow "very large volumes" of users to employ the apps concurrently, helping with load-balancing, according to Peoplesoft.

The company will offer the standard 18 months of migration support to customers seeking to upgrade to the three-tier architecture. However, customers who still opt for the two-tier approach will be able to use the new version.

With PeopleSoft 7, the company will also deliver a new client written in Java and integrated online analytical processing (OLAP) capabilities. Also scheduled to debut are two new engineering modules and a suite of 15 self-service Web applications that are in beta testing.

Gartner Group analyst Vinnie Mirchandani said PeopleSoft is catching up with its competition by adding Java and OLAP features but questioned whether the enhancements will help win new customers. The company has aggressively courted vertical-market niches, including manufacturing, since releasing its first manufacturing modules last year.

The manufacturing apps will likely lack important enhancements because of the rush to market, Mirchandani said. New customers in this area are waiting for PeopleSoft to bring its apps up to the level of competitors such as Oracle. Still, he said the enhancements are not contemplated in the next version.

"PeopleSoft is a powerhouse in human resources and financials. They want to position themselves to extend into the global market and vertical markets, but they won't be as successful as fast in these markets," Mirchandani said. "Manufacturing software is very complex and very unique. PeopleSoft is not going to go deep into process manufacturing or engineer-to-order industries in the next release."

The move, announced at PeopleSoft's European users meeting in Edinburgh, Scotland, represents the company's response to growing market demand for--and competition to supply--online business applications.

The announcement comes on the same day that PeopleSoft is set to report its quarterly earnings. The company is expected to post a gain of 12 cents per share, according to a FirstCall consensus estimate.

PeopleSoft, like its chief competitors Oracle and SAP, is rushing to offer applications that can be deployed across private networks, such as local area networks, corporate intranets and extranets, and the public Internet.

The applications makers have embraced the Internet during the past 12 months or so and have begun to introduce Web applications accessible with a standard browser by occasional users. The applications firms see the occasional user as an attractive new revenue stream.

However, Mirchandani said sophisticated customers have begun to question the wisdom of buying Web-based apps for performing tasks such as order processing and other e-commerce activities from companies like PeopleSoft, SAP and Oracle. Instead, he said customers are looking to specialized developers for such components that can tie into the business applications.

While pricing for PeopleSoft 7 is not set, Bergquist said the suite will cost roughly the same as the current PeopleSoft 6, which sells for $100,000 per application.