Future Looks Bright, PeopleSoft SaysFuture Looks Bright, PeopleSoft Says

Executives at enterprise software vendor PeopleSoft Inc. say the company is set to realize big gains in both its product line and financial performance from its $1.7 billion merger with J.D. Edwards & Co. There will be some losses, too: The company plans to cut up to 1,000 jobs over the next year because of the merger.

PeopleSoft is moving fast to integrate offerings. It will complete its full product-integration plans by the first quarter of 2004, executives said last week at an analyst meeting. By the fourth quarter of this year, J.D. Edwards' front- and back-office applications tuned for the real-estate industry will be available to PeopleSoft customers. PeopleSoft's enterprise customers, as a group, own more than 5 billion square feet of real estate, according to Ram Gupta, the vendor's executive VP for products and technology. "Talk about an opportunity," he says.

Software for J.D. Edwards' IBM AS/400 customers will be sold under the PeopleSoft World brand. The PeopleSoft Enterprise One and Enterprise brands will be aimed, respectively, at midsize and large companies. PeopleSoft also is adding J.D. Edwards expertise to its services centers.

Tad Piper, a US Bancorp Piper Jaffray analyst, likes what he has heard. "While there's clearly a lot of work to be done over the coming months and, in fact, years, there's at least a clear plan," Piper says.

With Oracle's $7.5 billion hostile bid looming in the background, PeopleSoft CEO Craig Conway took the opportunity to tout the "clear, present, and immediate benefit" of his company's merger with J.D. Edwards. PeopleSoft raised its estimate for licensing revenue in the fourth quarter from $120 million to $135 million to between $160 million and $175 million. It raised its estimated licensing revenue for 2004 to between $485 million and $515 million.