PeopleSoft Vies for Larger Slice of Government Pie

BR>

PeopleSoft Vies for Larger Slice of Government Pie

Human resources software helps the developer expand its federal business

By Jack Sweeney

Group Editor

Of all the software developers piloting client-server strategies, few are riding the distributed computing wave as well as PeopleSoft Inc., Pleasanton, Calif.

Having nearly doubled its sales last year to close to $430 million, industry analysts now expect PeopleSoft's greater market penetration and new product plans to push its revenue beyond $700 million this year, a jump of more than 65 percent. And nowhere is the developer expected to make greater inroads than inside the federal government, where untapped demand and limited competition has PeopleSoft gearing up for rapid growth.

George Sui, director of business operations for PeopleSoft's federal sector, said the 10-year-old developer is hurrying to staff its government unit.

"We started in government 18 months ago and are now up to about 30 people in human resources [applications] alone," said Sui, who expects the number of PeopleSoft federal employees to reach 70 before the end of the year.

Within the last 18 months, PeopleSoft and Andersen Consulting have begun working on client/server projects at the U.S. Department of Justice, Internal Revenue Service, Bureau of the Census, Social Security Administration and the Library of Congress. In addition, the developer is now working with integrator Price Waterhouse at the Department of Veterans Affairs.

Stephen Rohleder, a managing partner within Andersen Consulting's civilian federal sector, said Andersen has been steadily increasing its number of government-dedicated employees within its PeopleSoft practice. Currently, about 250 of the 600 employees now working within Andersen's PeopleSoft practice are focused on government customers, Rohleder said.

"PeopleSoft now has five major departmental accounts, and of those accounts, Andersen has only been left out on one," said Rohleder, who estimates Andersen's overall PeopleSoft practice has grown by 50 percent annually since 1992 and currently captures between $200 million to $250 million annually.

So far, PeopleSoft's government market push has been largely tied to its role as the leading provider of human resources client/server applications in the United States. The developer now has 30 percent of the human resources client/server market worldwide, a slightly smaller share than Germany's SAP, which captured an estimated $2.2 billion in overall sales for 1996.

"The [federal government] is just an immature market that's ripe for opportunity. There's just not a whole lot of competition. I don't think there is any alternative [human resources] client/server package out there," said Sebastian Grady, PeopleSoft's vice president of customer services.

It would be a mistake, however, to believe PeopleSoft's competitors are not looking to counter the developer's ambitious government expansion plans.

"We have a number of opportunities that are in various stages, and I would say our financial client/server offerings are very strong right now," said John Greaney, SAP's manager of public sector, center of expertise.

Still, Greaney said the world's No. 1 developer of human resources programs had yet to capture its first human resources client/server project within the federal government sector.

"I think SAP has really been working hard to exploit its niche in the manufacturing area and therefore has been concentrating more on commercial opportunities," said Rohleder, who indicated Oracle Corp., Redwood Shores, Calif., remains PeopleSoft's greatest government challenger. As PeopleSoft gains new ground in civilian agencies with its human resources applications, Oracle has been making steady inroads within the Department of Defense with its client/server financial applications.

The battle between the two client/server developers will likely escalate later this year when PeopleSoft attempts to move its government focus beyond human resources into financial and supply-chain management applications.

"We will not go after markets where we can't be the No. 1 or 2 player because we don't want to create any extra fringe business. There are just too many major opportunities out there," said Steve Tennant, PeopleSoft's vice president of business development.

One factor helping advance PeopleSoft's government growth is product customization, officials say.

"PeopleSoft was smart to federalize [its] commercial human resources product early on, whereas Oracle and others have attempted to customize their product through clients. This can complicate things," said Rohleder.

PeopleSoft management believes the government's need to remedy its software 2000 problems will
continue to open new doors to client/server projects as more government officials compare the costs
behind their legacy systems with newer client/server projects.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close

Trending

  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Our databases track awards back to 2013. Read More

  • Navigating the trends and issues of 2016 Nick Wakeman

    In our latest WT Insider Report, we pull together our best advice, insights and reporting on the trends and issues that will shape the market in 2016 and beyond. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.