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PeopleSoft unveils hosting strategy

The software maker is finally taking the wraps off of its plans for tackling the application hosting market.

PeopleSoft is finally taking the wraps off of its plans for tackling the application hosting market.

The company today detailed its new application service provider (ASP) division, called PeopleSoft eCenter. As previously reported, the new division will manage, host and support PeopleSoft's business applications for start-ups and larger companies. Armed with a slew of technology partners and an executive management team snagged from rival Oracle, the company claims it already has a large pipeline of customers ready to go live with the new service.

In a conference call this morning, executives said the division will provide secure access to its front-office and back-office applications along with its more complex business-to-business procurement software that powers trading exchanges or online marketplaces via the Web.

The enterprise resource planning software maker has lagged behind rivals including Oracle, SAP and J.D. Edwards in announcing its own application hosting unit. But analysts say PeopleSoft is considered a pioneer by forming partnerships with specialized ASP firms. The company has about 11 existing partnerships with so-called pure play ASPs such as Corio, which has been hosting and managing some of PeopleSoft's software since November 1998.

The company's move comes on the heels of rival SAP's announcement to launch a separate ASP company. SAP said the company will offer application hosting services directly from SAP and support its existing service and hosting partners. Oracle launched its own ASP division, Business Online, early last year. J.D. Edwards recently made an aggressive push in the market as well.

In the past months, a number of technology providers have placed their bets on the nascent market, hoping to cash in on what analysts say could be worth $23 billion in the next three years.

Joshua Greenbaum, an analyst who heads Enterprise Applications Consulting in Berkeley, Calif., said PeopleSoft's move to launch a separate division is a logical one.

"It's recognition that there's serious revenues to be had in this market and also recognition that this ASP market is starting to heat up," said Greenbaum. "The ASP market is getting a lot of impact right now. It's new and the market is new, but the (enterprise resource planning companies) still have to do a lot more in order to grab mindshare in the market. It's not enough to just say you have your own ASP unit."

PeopleSoft eCenter will be led by former Oracle Business Online executive Deepak Gupta. Gupta spent seven years at the database software giant where he was most recently the chief architect and strategist for Oracle's ASP unit. Gupta leads an executive team made of a number of former Oracle executives including Gary Robinson, vice president of sales, and Gopesh Kumar, vice president of consulting services.

For its new unit, the Pleasanton, Calif.-based company has inked partnerships with Cisco Systems for its networking services, Exodus for data center locations and Web site hosting and support, Sun Microsystems for servers, MCI WorldCom for global network services and support, and other hardware providers to support the secure delivery of its software.

The company also said it is teaming with several consulting firms to help implement the software for customers, including IBM Global Services and Andersen Consulting.

PeopleSoft eCenter is available now in North America; the service will be released globally over the next year, the company said. In the second half of the year, it expects to start hosting additional applications--including its customer relationship management suite, which automates a company's sales, marketing and call center needs--as well as complementary non-PeopleSoft applications.

Pricing for the service has not been announced.