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PeopleSoft heads to India

The company plans to open a lab in Bangalore, a move that it says will trim the cost of consulting services for its customers.

PeopleSoft plans to open a software lab in Bangalore, India, in June, in a drive to reduce the cost of consulting services that its customers need in order to install its complex set of business automation software.

The Pleasanton, Calif.-based company discussed the Bangalore development center on Tuesday at its annual Leadership Summit conference in Las Vegas. It plans to hire 300 programmers and consultants by end of the year to work in the Bangalore center, making it the largest of eight PeopleSoft labs around the world.

"The facility in India will offer a remote configuration capability, providing high-quality service while driving down the cost and time required for implementations and upgrades," the company said in a statement. "As a result, customers can implement PeopleSoft software faster and at a reduced cost."

The new lab is part of PeopleSoft's drive to lower software installation and support costs for its customers. It will also enable the company to tap India's supply of relatively cheap and plentiful IT workers.

PeopleSoft said it will spend hundreds of millions of dollars over the next several years and employ more than 500 developers to improve installation and maintenance processes for its software, as well as make its software more easily exchange data with other business systems.

Industry experts estimate that consulting fees for installing business applications that can cost companies more than three to four times the license fees for the software itself.

"Enterprise applications take too long and cost too much to implement," said Ram Gupta, PeopleSoft executive vice president of products and technology, speaking at the conference. "That's because they require consultants, and consultants cost too much."

The expansion to India follows similar efforts by PeopleSoft rivals SAP, Oracle and JD Edwards to increase their own software engineering staff in India to utilize the country's cheap, well-educated information technology work force.

At the conference, PeopleSoft also unveiled plans to release new versions of software applications designed to automate various business tasks. Among the releases will include new and updated software components for tasks such as streamlining manufacturing activities, recruiting consultants and contractors, creating business reports, complying with new accounting regulations, and managing information technology projects.