Peoplesoft Inc

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PEOPLESOFT INC.

Pleasanton, California-based PeopleSoft Inc. is a leading developer of enterprise software. Its offerings connect companies and their employees with business partners and customers. In 2001, the company's products included PeopleSoft Customer Relationship Management, PeopleSoft Financial Management, PeopleSoft Supply Chain Management, and People-Soft Human Resources Management. In addition to different customer service options and consulting services, the company offered learning opportunities via on-demand classes and live Webcasts through its PeopleSoft University. It also offered products on a hosted basis, via the PeopleSoft eCenter. In the early 2000s some of the world's leading organizations were PeopleSoft customers, including Visa U.S.A. Inc., Pepsi-Cola Co., Quaker Oats Co., Amazon.com, and AOL Time Warner Inc. Government agencies and educational institutions also used the company's products.

EARLY HISTORY

PeopleSoft's roots go back to 1987, when Ken Morris and David Duffield founded the company. Although Morris eventually parted ways with People-Soft, Duffield remained with the company as its leader. He became popular for maintaining a culture where people were valued, soft drinks were on the house, and pets were welcome. After graduating from Cornell University with an MBA and an undergraduate degree in electrical engineering, Duffield worked as a systems engineer and marketing representative for IBM. He then co-founded Information Associates, a company that developed systems for higher education, and established Integral Systems, a firm that developed accounting and human resources software. According to the company, as chairman of PeopleSoft Duffield was "the driving force behind the company's vision, product, market direction, and commitment to services."

Morris and Duffield established PeopleSoft to develop business software exclusively for client-server environments. At the time, this was a somewhat progressive approach because mainframe computer applications were more commonplace. Many enterprises were faced with the challenge of moving from one environment to the other, and PeopleSoft's products found a niche. The company unveiled PeopleSoft Human Resources Management Systems in 1988. Over time, the company's dominance in this business segment would grow until it attained market share of 50 percent.

EXPANSION BEGINS

International expansion first occurred in 1990 when an office was established in Canada. Three years later, the firm had established operations on five continents and opened offices in Africa, Asia, Central America, Europe, South America, and the Pacific Rim. PeopleSoft's products and services continued to find new markets. In 1992, its fifth year of operation, the company went public. Shares were offered for $4.25 each. Additionally, the firm introduced People-Soft Financials (accounts payable, accounts receivable, asset management) which would become a strong seller. In 1993, PeopleSoft announced its plans to release two new applications: PeopleSoft Distribution, for materials management (purchasing, inventory management, billing, and processing orders); and PeopleSoft Student Information System, which was targeted at schools for managing information about students.

GROWING PAINS

In 1994, Fortune named PeopleSoft the nation's fastest growing software company. The company's revenues increased from $6 million in 1990 to $113 million. New products were unveiled, including PeopleSoft Financials for the Public in 1994, and applications for the education, manufacturing, healthcare, financial services, and government sectors the following year.

In 1995, PeopleSoft ventured into the manufacturing arena. It established PeopleSoft Manufacturing Inc. (PMI) as a separate company to shelter the larger organization from the risks associated with the new venture. Some industry analysts criticized the company's entry into the manufacturing market as too late. Some PeopleSoft customers who were using the company's human resources and accounting software were unable to wait for a manufacturing application and pursued other options.

PMI—which actually included PeopleSoft Manufacturing Inc. and PeopleMan LP—was formally acquired by PeopleSoft in 1996 along with Red Pepper, a manufacturing and supply chain software developer. For the remainder of the 1990s and into the 2000s, the company would live up to the accolades for fast growth it received from Fortune. PeopleSoft began acquiring companies at a rate of 1-2 per year through 2001, including Salerno Manufacturing Systems, Campus Solutions, and TeamOne in 1997; TriMark Technologies and Intrepid Systems in 1998; Distinction Software in 1999; Vantive and Advance Planning Solutions in 2000; and SkillsVillage in 2001.

NEW DIRECTIONS AND STRATEGIES

PeopleSoft continued to branch out in new directions into the late 1990s. In 1998, the company announced that it would create a new business unit devoted to outsourcing services. Specifically, the unit would handle the outsourcing of business processes and technology. After seeing revenues increase approximately 80 percent in 1997, PeopleSoft secured lucrative deals with both Boeing and General Motors. Additionally, its manufacturing product was adopted by companies like 3Com and Hewlett-Packard.

In 1999, PeopleSoft announced that it would alter its strategy of selling enterprise resource planning (ERP) products directly to larger companies and make an effort to reach emerging smaller and medium-sized firms through resellers. The company planned to do so in secondary markets; at that time, its core U.S. markets were Atlanta, Chicago, New York, and San Francisco. In the last half of 1999, PeopleSoft's customers began to enjoy more applications from third-party vendors that were able to integrate with PeopleSoft products. This "open integration" approach was the result of efforts the company began in 1998, and promised to make the PeopleSoft's ERP products more attractive to customers.

Several big things happened at PeopleSoft toward the end of 1999. In October, the company made a huge acquisition when it acquired Vantive Corp., a manufacturer of customer relationship management software, for $433 million. Finally, in September Craig Conway was named PeopleSoft's CEO, assuming responsibility for day-to-day operations from Duf-field. After one year on the job, Conway commented on the impact he had made on the firm in Computer-world. "It's a very, very different company," he said. "We've retooled our management team and business processes, so we're a better-run company. And I think the company's morale and confidence is at an all-time high. . .I think I added an ingredient of intensity and accountability and competition to the corporate culture."

In 2000, PeopleSoft ventured into yet another new arena—professional services automation. It introduced its PeopleSoft PSA product, which helped companies match employees with projects based on their skills. PSA also was useful for managing other aspects associated with projects including billing, scheduling, and proposals. Finally, PeopleSoft became an application services provider (ASP) by offering its applications on a hosted basis via its eCenter.

Just as it had done in the 1980s by offering client-server-based solutions, PeopleSoft began focusing its efforts on a new model in the early 2000s. At that time, companies were interested in the potential business advantages offered by the Internet, especially in the area of transactions. In keeping with this focus, PeopleSoft channeled the lion's share of its resources into creating a "new pure Internet platform for the collaborative enterprise." Over the course of two years, the company devoted 2,000 developers and $500 million to the creation of PeopleSoft 8. The new platform made analytical and relationship data more pervasive and easily accessible for a company's employees.

Late in 2001, PeopleSoft introduced Enterprise Performance Management, a suite of software that included tools for modeling customer behavior. The software enabled companies to "pull data from PeopleSoft's operational CRM applications in real time and use that information to segment, profile, and model customer populations—critical for generating lists for e-mail marketing campaigns," according to InformationWeek.