PeopleSoft Plays Beltway Card

The hot software company is on a high roll, with plans to double its area presence to tap the lucrative federal and mid-Atlantic commercial markets

When Jeffrey Carr began working for the $114 million client/server software vendor PeopleSoft in 1990, the entire company had only 40 employees. Carr eventually opened PeopleSoft's mid-Atlantic office in Columbia, Md. Now, he must beat a trail through a newly developed market as director of federal programs for the hot Walnut Creek, Calif.-based software company, which has formally christened its Washington-area presence with a federal division.

According to PeopleSoft's founder, President and CEO Dave Duffield, the company's opening a federal division reflects its interest in "defining key vertical markets, such as higher education, and organizing separate business units to penetrate them."

That seems like a wise move. PeopleSoft already claims a half dozen federal customers, including Mitre Corp., Perot Systems, PRC, TRW and Vitro Corp. Success in the U.S. federal market mirrors PeopleSoft's impressive gains during the past year in the Canadian federal market, where 15 of the top departments hold PeopleSoft licenses. Duffield says that the federal division has four active prospects among the federal agencies, and that PeopleSoft hopes to land at least two of them by December.

By December, the publicly held company plans to release HRMS, or human resources management software, for the federal market, and Carr and his associates are working feverishly with integrator PRC to deliver the product through a large Air Force contract held by the prime contractor. This month PeopleSoft will move its local office to Bethesda. That office will house research and development, sales and training facilities.

Locally, PeopleSoft has hired board systems developers, human resources, personnel and payroll experts. The office now has approximately 30 employees, but Carr predicts the number will probably double by year's end.

That makes PeopleSoft one of a number of companies that make huge contributions to the local economy and high-tech community -- but don't have headquarters here. A $26-billion federal market and a clutch of Fortune 500 companies as well as high-tech successes and start-ups has made the area a prime candidate for a satellite office, creating economic activity that often gets missed or overlooked in surveys of the area's growing importance in the so-called third-wave economy.

And those offices often do much more than marketing and sales; like PeopleSoft, many companies perform research and development in the Washington area to customize products and services for federal customers.

"There are so many [personnel approvals for federal workers] that they use a lot of paper," asserts Carr. PeopleSoft wants to help government users create a paperless personnel office by improving internal workflow. PeopleSoft hopes to work with the ubiquitous SF52 personnel form, which civil servants use to report newly hired personnel, promotions, resignation and retirement. He says PeopleSoft works well with Delrina's Deskform for handling electronic document flows -- another hot software product in the federal market.

Other goals include providing a payroll interface for federal civilian agencies which don't use the National Finance Center of the U.S. Department of Agriculture. By early to mid-'96, says Carr, they hope to develop strong benefits administration applications.

So far, government users have responded enthusiastically to PeopleSoft.

A pre-announcement gathering for the HRMS federal product drew approximately 300 federal government attendees to Tyson's Corner, Va. "Usually, we have 100 attendees or so at our regional seminars."

The company's main federal goals are twofold: Getting a spot on the government's General Services Administration schedule list of approved products for agency purchases by October 1, 1995, and pumping up product sales through a contract that prime contractor PRC has with the Air Force.

More immediately, PeopleSoft Federal must hire qualified personnel. "Our single biggest challenge is hiring in anticipation of growth. We can't wait until we get the contracts."

All new employees go through a training program called PeopleSoft University. "It's easier to hire people [in the Washington, D.C.,] area because there are a lot of systems integrators and people who are looking to get out of the government."

PeopleSoft's primary competition includes SAP America Inc., the American division of the German company, and Oracle Corp.

In the federal government market, Oracle serves as the most formidable adversary. PeopleSoft has approximately 700 customers -- enough to occupy 34th place in Software Magazine's 1994 survey of leading software firms. According to the Gartner Group, a Stamford, Conn.-based market research firm, PeopleSoft holds 54 percent of the market in systems for managing human resources.

While Oracle competes with PeopleSoft in the client/server software market, Carr points out that his firm "sells a lot of Oracle databases, as packaged applications become more common. It's easier to change databases."


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