The Pleasanton, California-based software firm today announced a partnership with IBM to integrate IBM's HR Access International Payroll product with PeopleSoft's popular human resource management software.
The deal will give PeopleSoft access to IBM customers in 35 countries, particularly the lucrative European market. PeopleSoft is also pitching the deal as a quick remedy to European and multinational companies' Year 2000 compliance problems.
PeopleSoft signed a similar deal with payroll giant Automated Data Processing (ADP) several years ago for help in building a European payroll product. The result of that alliance will be available as part of PeopleSoft version 8, due out next year.
The IBM deal is acting as a sort of placeholder for PeopleSoft while it gets its internally and ADP-developed product ready for market. But executives at the company insist the IBM deal is a long-term partnership and not a short-term fix.
The IBM product "is not complimentary but it is not actually a conflict either," said Mark Lane, international marketing manager for PeopleSoft. "We will absolutely continue this relationship after Release 8. This is not a short-term relationship. Although some customers are just interested in it as a Year 2000 fix, IBM has many loyal customers who will want the integrated product. Also, some of our customers are not willing to take release 1 of our payroll."
Another factor is PeopleSoft's need to push into global markets. While PeopleSoft is one of the top vendors in the global enterprise resource planning software market, the vast majority of its market share is North American customers. Most of the leading ERP players, like Germany-based SAP, Netherlands-based Baan, and even U.S.-based Oracle, have solid leads in international sales.
Great Britain and France will be the first two countries to get a taste of the Big Blue/PeopleSoft product. The companies are rolling out the integrated system to the countries in the beginning of the third quarter of 1999, with deployment in other regions to follow.
"We have a very fast growing installed base of international customers in Europe. More than 400 enterprises are using PeopleSoft's product with about 300 running the HR product," Lane said. "About half of our HR product installations are in [the United Kingdom and France]. So we think it is important that we address these two first. Within a very small time frame afterward, we will be attacking the other major economies in Europe."