PeopleSoft is rethinking its strategy for a portal-like Web
site, underscoring the difficulty business software companies face in
adapting to the Internet economy.
PeopleSoft is reworking its
PeopleSoft Business Network (PSBN) plan, announced with great fanfare last
fall as the cornerstone of the company's long-awaited Internet strategy.
PSBN was envisioned as an online counterpart to the company's Enterprise
Resource Planning (ERP) software applications. PeopleSoft plans to offer a
series of e-commerce applications and services from third-party companies
via the site. In essence, the site is intended to offer outsourced business
applications, for a fee, to companies for internal use and for conducting
Now, PeopleSoft has chosen to drop the use of PSBN in company literature as
a defining brand name. Also, a key developer of the site has left the
company. Joe Schmidt, a PeopleSoft spokesman, said that the company will no
longer use the PSBN name, but that the network "is alive and well" in its
Even with the recent resignation of Tom Glassanos, one of the original PSBN
developers, Schmidt assured that PSBN is still in the works and PeopleSoft
has increased its staff from 50 developers to 100, bringing the division into
PeopleSoft's mainstream operations. Schmidt added that the company has just
simply chosen not to use "PSBN" in its company synopsis, but instead to
focus on selling its e-business applications, such as e-procurement and e-store, on a piecemeal basis, which he said customers are demanding.
However, some industry analysts have said they believe PeopleSoft's Internet
strategy needs more work and more substance before it can move forward.
And, while competition is the obvious motivation behind most ERP vendors'
push to make their mark with an Internet vehicle, some analysts are still
skeptical on whether a portal site is going to make the final cut.
"PeopleSoft is dropping PSBN and the question is in what ways will they be
executing an Internet strategy going forward," said Rob Kugel, an analyst at
First Albany. "A portal of some sort is a necessary component of an ERP
system, but the issue is how extensive is that portal and what is it that
you're putting into it."
At its user group conference held last November, the company had
announced a new portal site strategy that would consist of several elements
including: the development of an e-business backbone, extensions for
e-business, and the PSBN, a program for managing and integrating other
vendors' products into PeopleSoft's products. At that time, PeopleSoft had
also said it's building a customizable interface for users that closely
resembles the My Yahoo personalized news
and portal interface. My Yahoo lets users customize Yahoo's Web site to
deliver only news and items of interest to that user.
"ERP portals are all relatively half-baked...not
the kind of Internet strategy you would put your entire business on," said
Joshua Greenbaum, head of Enterprise Application Consulting in Berkeley,
California. Greenbaum added that at the time when PeopleSoft "was leaderless
and grasping for an Internet strategy where it could find it, PSBN looked
like a good idea."
"Any company that believes it's in an ERP business has to have an Internet
strategy because the Internet is integral in enterprise computing," said
Kugel. "How they [PeopleSoft] execute that strategy seems to be even
more up in the air to me today than it appeared when they announced PSBN. My
take on it is that the evolution is more of a reflection of the realities of
the marketplace they're facing and the need to rethink how they're going to
address the marketplace rather than an abandonment on their Internet
After PSBN was announced, ERP competitor SAP followed with mySAP.com, a portal site
that the company had said will eventually serve as a personalized hub for
connecting users to customers and business partners across the Internet. As reported, mySAP.com is intended
to provide one stop for everything from ordering from an online catalog to
scheduling corporate meetings internally to communicating with suppliers.
Greenbaum added that in order for an ERP vendor, like PeopleSoft, to succeed
with an enterprise portal, the company will need to focus on vertical
markets, otherwise it will face stiff competition with other
well-established horizontal portal sites, such as Yahoo.
"ERP vendors are desperate for some play in the portal market in order to
defend their customer base," Greenbaum said. SAP [with mySAP.com]
has been honest and careful in testing out the waters in the market, he
said, which is a big difference from PeopleSoft's strong approach with
PSBN--trying to constitute it as the future of the company.
"PeopleSoft is retreating back to reality," he said. "They know it's
[PSBN] not the future of the company."
Jim Shepherd, an analyst with Boston-based AMR Research, said he believes
PeopleSoft's Internet strategy isn't in any trouble and that it's a strategy
that has "gotten very good reception."
"It's early," Shepherd added. "We're at this stage where we have a lot of
application vendors trying to establish credibility, to establish themselves
on the Internet. It's more of a strategy than it is a completely fleshed out
set of products, but one that fits PeopleSoft well."