PeopleSoft seeks sales boost via upgrade deals

PeopleSoft is offering users of its applications a series of sweeteners to entice them to upgrade their systems, a strategy designed to help the embattled vendor close more sales and boost its ability to fight off Oracle's takeover bid.

Dubbed PeopleSoft Now, the upgrade initiative was one of the new offerings that PeopleSoft announced at its Connect 2004 user conference in San Francisco this week.

The company also detailed an expanded sales and development partnership with IBM. Under that agreement PeopleSoft will optimize its applications for use with IBM's WebSphere middleware and development tools and resell the IBM technology.

The Now program, offered through PeopleSoft's Global Services arm, will provide users with free upgrade work, application management services and access to online training. PeopleSoft also said it will give customers US$100,000 credits on some new software purchases. The program applies to all three of its business application product lines and is due to expire December 31.

David Scott, vice president of marketing and strategy at PeopleSoft Global Services, said Now is designed to help the company save money by reducing the need to maintain older versions of its applications. PeopleSoft also hopes to sell add-ons to users who decide to do upgrades, he added.

The upgrade offer will enable IT managers to exploit the ease-of-use features now being embedded in application releases as part of PeopleSoft's Total Ownership Experience initiative, Scott said. "Some of our reasons are selfish, and some are selfless," he noted.

Conference attendee Dominick Sabatino said he expects his company, the North Shore-Long Island Jewish Health System in Great Neck, N.Y., to take advantage of the upgrade offer. The health care provider runs PeopleSoft's supply chain, human resources and financial applications but is several versions behind on each one.

"We had planned to upgrade in 2005," said Sabatino, the health care system's assistant vice president of corporate human resources. "This gives us an incentive to get there sooner."

"Free is always good," said Todd Inlander, CIO at Fleetwood Enterprises, a Riverside, Calif.-based maker of recreational vehicles that uses PeopleSoft EnterpriseOne software. Fleetwood plans to upgrade early next year from EnterpriseOne 7.3 to 8.10, which should provide improved usability features, Inlander said. But he added that the Now program will require due diligence before the company signs on.

The U.S. Navy might be interested in using Now to help fuel an upgrade of aging payroll applications and other software from PeopleSoft, said Capt. Valerie Carpenter, joint program manager for the Pentagon's Defense Integrated Military Human Resources System (DIMHRS) project (QuickLink 41815).

The payroll system is based on PeopleSoft Enterprise 8.3, and Carpenter said an upgrade to Version 8.8 would offer more stability and enable the system to be seamlessly integrated with DIMHRS, which is due to be rolled out across all branches of the military starting in 2006.

PeopleSoft fell short of its second-quarter revenue target, a result it blamed on the difficulty of closing deals amid the uncertainty created by Oracle's 15-month-old takeover bid. That uncertainty grew earlier this month when a federal judge rejected the U.S. Department of Justice's attempt to block Oracle on antitrust grounds.

Stacy Cowley of the IDG News Service contributed to this story.

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