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PeopleSoft works on its midsize appeal

The software maker releases a set of scaled-down business-management tools priced to attract midsize customers, joining rivals in chasing a largely untapped market.

PeopleSoft has released a set of business-management applications priced to appeal to midsize businesses, joining rivals in a drive to reach a largely untapped market segment.

The Pleasanton, Calif., company said Monday that the newly available software starts at $50,000 per component and is designed for U.S. companies with up to $500 million in annual revenue. The 13 new components are designed to streamline various business tasks such as purchasing and hiring, PeopleSoft said.

Included in the price of the package are an unlimited number of user licenses as well as training and software installation services. PeopleSoft said it designed the software to be capable of being set up in less than three months.

PeopleSoft joins rivals SAP, Oracle and Siebel Systems in introducing scaled-down versions of their high-end business systems, which typically cost millions of dollars and take years to set up. Their efforts to sell to more frugal, smaller-scale businesses are nothing new, but some have rekindled that effort as a result of Microsoft entering the picture.

Through several acquisitions in recent years, Microsoft is putting its might behind building a $10 billion business applications unit that is targeting midsize and small businesses. The company recently enlisted its top sales executive for that effort and currently has many new products in the works.

Also behind the drive toward more bite-size software is the fact that many large companies gorged on software during the late 1990s and have little appetite for more. That reality is reflected in more than two years of declining sales across the software industry.

As a consequence, PeopleSoft and many of its competitors have pegged their hopes on medium-size and small businesses, which offer an oasis in an otherwise saturated market. That hope was buoyed by news last week that the Sage Group--a U.K.-based company that sells software largely to companies with fewer than 100 employees--did swift business in the first half of its fiscal year. The company reported a 14 percent rise in pretax profits and a 4 percent increase in revenue over the same period in 2002.