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October 6, 1998

PEOPLESOFT TEAMS WITH CSC & KPMG FOR OUTSOURCED APPS

By CBR Staff Writer

Peoplesoft Inc has followed Oracle Corp’s move into the world of applications outsourcing in an attempt to tackle one of the biggest log jams in its sales process, namely the huge initial expense of buying into its software. But while Oracle intends to offer a fully hosted, subscription-based service over the internet, Peoplesoft has turned to some heavy weight outsourcing partners, including Computer Sciences Corp and KPMG Peat Marwick, to help it move into this market. These Certified Outsourcing Partners will have the power to sub-license Peoplesoft’s entire suite of software and will act as the primary contact for the client through an independent services contract. The outsourcing partner will supply the processing power and even staff in financial and human resources roles. However, John Haworth, Peoplesoft’s director of outsourcing strategy, said his company would still retain overall control of the pricing model. Customers will hold both a license from Peoplesoft, as well as a separate services contract from their chosen partner. Continuing in the Peoplesoft tradition of embracing curious corporate jargon, Haworth called the set up, an ecosystem with three legs. Peoplesoft has also teamed with two smaller players, Corio and USinternetworking, to offer remote hosting of its applications over the internet in a move similar to that announced by Oracle in September. The jargon being used to describe this type of operation is an ASP or Applications Service Provider. Peoplesoft was reluctant to talk about the specifics of how its new partners will price their services, but insisted it would provide significant incentive to companies who preferred a monthly fee to an initial capital investment. However, it seems likely that customers will end up paying a significant premium to the support the newly attached third appendage to the Peoplesoft ecosystem.

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