It took ten years, but last year PeopleSoft Inc finally managed to throw off its mantle as a great human resources software supplier. In fact, since 1993, when the company first branched out into financial and distribution software, PeopleSoft has rightly claimed to be more than just the leading vendor of human resources software. But it was only in November last year, following the launch of PeopleSoft 6 – the first version of the product to include manufacturing capabilities – that it could really claim to be a fully-fledged integrated enterprise business application supplier on a par with SAP. The addition of manufacturing software to the PeopleSoft armory should significantly enhance the company’s prospects. But even without manufacturing skills, the company’s growth has been meteoric. In 1996, for example, PeopleSoft doubled its number of employees to 2,600 and increased its customer by more than half to just over 1,400 sites.
Continue to impress
The company also acquired Red Pepper Software Company, a supply chain management software company, in September of last year for a staggering $225m. Despite the impact of charges relating to the acquisition of Red Pepper, and the absorption of PeopleSoft Manufacturing, a semi-autonomous subsidiary of the company, financial results for 1996 continue to impress. Revenues, which were restated to reflect the acquisition, rose 94% to $450.1m and net income climbed 32% from $27.3m in 1995 to $35.9m, and would have been $54.7m without the acquisition charges. There is no sign of a slowdown. Although the company has historically been reluctant to make financial predictions, earlier this year, chief financial officer Ron Codd forecast that revenues would rise 70% in 1997 and, given the company’s excellent first quarter results, his optimism may be justified. Net income for the latest quarter rose 89% to reach $17.8m, on revenues up 87% at $153.7m. 1997 will also see new products and partnerships. In April, the company announced that it was bringing forward the release of PeopleSoft 7, originally scheduled for the end of 1997, to September. Among the enhancements expected are the introduction of a three-tier architecture, thin client technology, and integrated on-line analytical processing capabilities. The company will also launch employee ‘self-service’ applications for the internet, as well as a range of packages aimed at vertical markets such as government and student administration sectors in which it already has an established record. The company is also trying to extend into the Microsoft NT market, along with all the other suppliers, announcing an agreement to use Microsoft’s SQL Server NT relational database as the primary development platform for all of the PeopleSoft applications. The company’s growth, however, depends primarily on its ability to cultivate a global customer base, in line with those of key European competitors such as SAP AG and Baan Co NV. If it can achieve this, PeopleSoft seems well-positioned to continue on its upward path.
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