Despite talk of a likely hostile takeover by rival Oracle Corp., PeopleSoft Inc. is forging ahead with plans to ramp up the amount of business it does with smaller organizations. The company just unveiled a newly updated package of software and services designed to bring EnterpriseOne applications to midmarket manufacturers.
PeopleSoft EnterpriseOne Rapid Start 8.11 adds human resources and customer relationship management (CRM) functionality to the product line's existing portfolio of financial, distribution and manufacturing software for midsize companies. The Rapid Start package also includes application training from PeopleSoft Global Services or "selected" resellers.
Andy Carlson, PeopleSoft's vice president of marketing for EnterpriseOne, said the Rapid Start offering is aimed at manufacturers with roughly $50 million to $250 million in revenue that want to implement what basically amounts to an enterprise resource planning (ERP) system.
"Usually what we're seeing in the smaller companies is they don't have an ERP system in place," Carlson said. "If you were to buy even just the [EnterpriseOne] basics -- financials, manufacturing and distribution -- you're essentially putting in an ERP system."
He declined to discuss pricing, but said it is available as either a licensed
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product or via hosted, subscription-based configurations through a variety of resellers.
Mike Dominy, a senior analyst at Boston-based Yankee Group, said the big challenge facing PeopleSoft in its efforts to market Rapid Start is how to convince potential customers that the company and the product line will be viable going forward, given Oracle's looming takeover threat.
"Even if [Rapid Start] cuts implementation time in half, and it's really easy to use, and it's very targeted for my business, I'm going to be very worried about buying these products from PeopleSoft, if I don't know what is going to happen to the company," Dominy said.
PeopleSoft is not alone in targeting companies in this space. All the large and many small players have offerings for it, analysts said.
One satisfied customer
Nonetheless, Dominy said PeopleSoft should have no trouble convincing midmarket manufacturers that Rapid Start is a solid package, because the company has years of experience working with all types of manufacturers.
One of those customers is Cannon Equipment Co., a midsized manufacturer of point of purchase displays, steel cart handling systems and distribution equipment based in Rosemount, Minn.
Cannon had been using a "mixed bag" of software from Mapics Inc. and Epicor Software Corp., but wanted to use products from one company, so it can save time and streamline processes.
"We were looking for a system that could replace those across all of our platforms," said Fred Hauenstein, Cannon's vice president of corporate administration. "And we wanted to have a piece of software that basically we would not have to modify or customize."
Cannon purchased an earlier version of Rapid Start back in February, though Hauenstein prefers not to discuss the price. That same month, employees began training on EnterpriseOne software.
Despite a few minor snags here and there, the first of Cannon's five plants went online with a fully deployed set of EnterpriseOne sales, manufacturing and accounting software in September, Hauenstein said. The company expects the rest of its plants to follow suit over the next few months.
Hauenstein, whose company employs just over 1,000 people and takes in about $250 million to $300 million in revenue each year, said he expects the EnterpriseOne apps to pay for themselves in about three years.
"We found that the Rapid Start environment that we used worked very well for us," Hauenstein said. "So, I have no reason to think that it wouldn't work on these new applications that [PeopleSoft is] putting out there."
New features and functionality
The Pleasanton, Calif.-based PeopleSoft said its Rapid Start offering enables the installation and platform-specific technical configuration of EnterpriseOne applications in as little as one day, while full scale software deployments may take four weeks or longer, depending on the size of the customer and the industry they serve. (Cannon's deployment took about seven months.)
New functionality in the release includes two new modules: Rapid Start for HCM and Rapid Start for CRM.
The Human Capital Management (HCM) module allows those in charge of human resources to manage all aspects of the employee lifecycle, including hiring, developing skills sets and monitoring performance. It also offers predefined user roles for typical manufacturing industry professionals -- equipment operator, plant manager and administrative assistant. Additionally, the package includes preconfigured business process software designed to aid in tasks such as employee recruitment, benefits program enrollment and timecard management.
EnterpriseOne Rapid Start for CRM manages key customer-facing business functions such as sales force automation, and order, warranty and service management. The module has predefined user roles for CRM professionals, such as case managers, warranty managers and customer service representatives. With the preconfigured business processes, users can track leads, manage sales quotes, create and track sales orders, and track shipments.
Rapid Start 8.11 will ship this month, and runs on all major platforms, including Intel, IBM eServer iSeries, and Unix- and Linux-based servers.
Competition aplenty
Analysts point out that PeopleSoft isn't the only company vying for market share amongst midsized manufacturers. Big companies like SAP AG, Microsoft and even Oracle are trying to woo manufacturers with a host of products. And there are some smaller companies to look out for, too.
"If you look at it revenue-wise, I think you'll see that SAP and Oracle are the biggest sellers to the midmarket," said Bob Locke, senior research analyst with AMR Research Inc. in Boston.
One of the smaller companies to watch SSA Global Technologies, Locke said.
"I think everyone is competing for that piece of the market now," he said. "SSA has been there for years and they've just grown and grown through acquisition."
SSA has purchased several companies during the past couple of years to expand its presence in the manufacturing segment. Those purchases included supply chain management specialist EXE Technologies and ERP software vendor Baan. The company also purchased e-business applications vendors Elevon and Ironside Technologies Inc.
Other companies making headway in the market are smaller companies Glovia and Adonix. Locke said Glovia is owned by Fujitsu and has a large and growing presence in Asia. Adonix is a French company with headquarters in the U.S. that has been successful in selling to the aerospace, defense and auto industries.
Takeover talk looms over Rapid Start release
Meanwhile, the new Rapid Start release was overshadowed in late November by news that a majority -- 61% -- of PeopleSoft had tendered their shares to Oracle at a price of $24 each.
But experts said the 17-month battle between the rivals isn't over yet, as litigation surrounding some PeopleSoft antitakeover measures makes its way through the courts. Though, the $9.2 billion takeover is beginning to look more and more likely.
PeopleSoft executives refused to comment on what a successful takeover would mean for the future of Rapid Start and its other offerings, but IT industry analysts predict that a merger would have little effect, at least in the short term.
Rob Kidd, a research director with Union City, Calif.-based Sageza Group, thinks Oracle will probably give its new acquisition a degree of autonomy for a year or two after the merger. Customers would not notice major changes to their service for some time, he said.
What those customers might notice, however, is a slowing of innovation around PeopleSoft products like Rapid Start, added Yankee's Dominy. The analyst said PeopleSoft customers probably won't experience lagging service immediately following an acquisition, but they won't see significant development activities either.
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