PeopleSoft CEO discusses ERP strategies

PeopleSoft CEO discusses ERP strategies

In just 11 years, Dave Duffield, CEO of PeopleSoft, has taken the company from a narrowly focused human resource application vendor to the world's second largest application software vendor. Chasing megasoftware power SAP and keeping ahead of the fiercely competitive Oracle, Duffield has his hands full. He sat down with IDG's Mike Vizard and Katherine Bull to talk about what's ahead for PeopleSoftIDG: The popular conception of PeopleSoft is human resources-centric, but you've moved into manufacturing and finance. How is that push going?

Duffield: From our statistics, it's going pretty well. We earned a good reputation in HR. We were very focused on the customer. And for that reputation for innovation and technology, and delivering good products, people would say - "look, just give them a chance". And they did. Now we sell more financial software, I believe, than anyone in the US.

More than Oracle, more than SAP and now we're moving into manufacturing - first the distribution product line, with purchasing order management - and that's going gangbusters too.

IDG: So when you get into an account like that and people start comparing you to SAP, what do you think are PeopleSoft's strengths?

Duffield: Frankly, we're very pleased to be in the running with SAP. I'm one of their biggest supporters. They're a very good company with very good products. We're gaining on them but we both respect each other as the competition.

When the dust settles and a customer is going to pick either SAP or ourselves, if they want current 100 per cent global functionality with a tightly integrated system, they're going to pick SAP.

If they want a long-term relationship, one that is founded on trust and caring with a company easy to do business with, and if they believe in our product and technology vision, they will pick us. We also have some terrific technology in the HR and accounting areas, the maturest of products.

No one company - not ourselves, not SAP - can do everything. We want to focus on what we think we do very well, and that is the core applications for our customers. For example, we are dominating higher education today. We acquired a company called Intrepid for the retail industry and a company called Tri-Mark for the life insurance industry.

And you'll be seeing more acquisitions from us as time goes on.

IDG: What other areas do you think that you're going to need to fill out and what else may you do in the acquisition area?

Duffield: Core applications for the industries that we've targeted such as financial services. You'll see more acquisitions and tight partnering with regard to property and casualty, insurance, the banking industry, brokerage firms.

IDG: Are we going to see more verticalisation from PeopleSoft?

Duffield: Yes. And we want to broaden our product line, meaning move into more countries, add the important features and functions that we don't yet have, while also deepening our focus within any particular industry, like in the Federal Government, retail, and financial services.

IDG: Are you fairly agnostic about whether you buy or build technology?

Duffield: We have these big product matrices of the industry, and we're going to identify the top priority items for each.

Then we're going after either acquisitions or partners or developing ourselves. The first priority would be to develop ourselves.

If time to market is not a big issue, if we can do it within the time frame we want, we'll develop it internally. If we can't, then we have to look for a partner or a potential acquisition.

If the partner we see presents the best solution and has no interest in being acquired, we'll then form a partnership and they can remain independent.

IDG: Is there a threshold, from a dollar perspective, as to what kind of acquisitions you will make?

Duffield: Our biggest one was Red Pepper - it was about $US250 million.

We probably won't do more than that.

We're very opposed to a merger of equals. We wouldn't think about merging with companies like Baan or J.D. Edwards.

IDG: One of the requirements we hear customers talking about is that, while there are some customers that are lining up behind all SAP or all PeopleSoft, it seems that the majority are going to wind up integrating them. Is PeopleSoft going to line up behind Business API? Or is Extensible Markup Language something you are looking at?

Duffield: I will tell you that over a period of three years, you will find that SAP and PeopleSoft and others who move toward a message-based architecture will easily integrate much more so than they do today.

IDG: Does PeopleSoft need to develop its own messaging software?

Duffield: You have to architect your system to use a messaging architecture. We aren't going to build our own middleware, like Open Horizon or Marimba. We use very good stuff, like we have with BEA.

We will build the applications that best exploit the messaging architecture. You just can't take a typical client/server program, and all of a sudden it's message-based.

There's some rework that has to be done to effectively use messaging.

IDG: How do you see Oracle competing in the applications arena?

Duffield: We've seen no increase in competition from Oracle since Larry Ellison took over the applications business.

And rumour has it that he didn't know much about what his own applications did at the Oracle user conference. That tells me that he's still not taking it too seriously. I personally don't think Larry Ellison cares about happy customers.

IDG: What are your customers telling you about year 2000 these days, and where are they in their readiness or preparedness?

Duffield: We've had successes with some political organisations, going into production in six weeks. I mean, you can do it, but the customer has to be prepared mentally, emotionally. They've got to do it fast, they can't have everything the way they want it.

And yet, we offer the ability that whenever they're past their problems, they can reconfigure the software to be more friendly to their particular needs.

We also have an outsourcing initiative; we're talking with partners, big companies - like Electronic Data Systems (EDS), and Computer Sciences Corp (CSC) - and they will provide the software to the customers on an outsourcing basis.

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