PeopleSoft to Offer $100,000 Credits for Some New Licenses

PeopleSoft is apparently making customer retention a priority, as it announces plans this week at its annual customer conference, PeopleSoft Connect, to offer credits of as much as $100,000 to customers willing to upgrade certain versions of its software before the end of 2004. Also compelling is the announcement of a five-year deal with IBM to extend the two vendors' existing relationship. George Ahn, PeopleSoft's group vice president and general manager of enterprise CRM, acknowledges that much of the news coming out of Connect was more general to the company than specific to its CRM offerings. None of the technology news, for example, will impact the company's road map for the 9.0 release of its CRM product, but Ahn tells CRM magazine that all the announcements "have a very strong impact for CRM." For example, Ahn says, the arrangement with IBM "means very good things for our CRM customers; it brings the two great technologies closer together." The $100,000 credit may be the most unexpected move. The credit is applied to new purchases of application licenses worth a minimum of $200,000. Ahn says it's not immediately clear how many CRM users are likely to take advantage of the offer, but that the credit is expected to have a significant impact. "I think it'll push some people over the edge," he says. "It gives [them] a lot of end-of-year fiscal budget opportunities." Erin Kinikin, vice president and research director at Forrester Research, isn't so sure. "I don't think companies will upgrade just to get the free software, but it's a great additional incentive," she says, adding that the credits could be used to pick up any of the add-on modules the company introduced with version 8.9 of its CRM suite, such as Account Planning and Smart Views. Says Kinikin, "$100,000 worth of free software could certainly help justify the purchase or squeeze in one more nice-to-have module [a] company wasn't sure it could justify." The credits are just one of the incentives being offered to entice customers to employ the company's in-house professional-services division, PeopleSoft Global Services (PGS). Others include the free use of one of PGS's six global solution centers and a year of free access for five people to educational materials and Web-based training. But the IBM deal may end up having the deepest impact, Kinikin says, since it addresses "one of the big unmet needs in CRM: process management and integration across the front and back office." Expanding its reliance on IBM's middleware offerings, she says, "will let PeopleSoft products like CRM reach out and coordinate with the legacy provisioning, order management, fulfillment, and billing systems that often have a big impact on overall customer satisfaction." Still, Kinikin says the benefits may not come overnight. "In the short term the technology announcement doesn't do a lot for CRM. But if PeopleSoft can really incorporate IBM middleware processes with CRM in a seamless way, companies should get better CRM results. Most CRM systems touch five to ten legacy and back-office systems, so integration and process management is key to CRM success." On the subject of creating CRM success, Ahn tells CRM about a new program announced this week, called the Customer Success Program, designed specifically for the company's CRM customers. "We put a team together for our new customers to take advantage of the wealth of knowledge from all the implementations we've done, so they can get going quickly and they can avoid the traditional challenges that other customers have faced." The program, he says, gives new users "the opportunity to work with engineers and developers on our side." PeopleSoft had previously extended that invitation primarily to its best users. Ahn says, "This program was put in place to provide the same kind of care and feeding to smaller customers." Like the Total Ownership program, the Customer Success Program is designed to improve what some say is an already positive customer experience. "Customers just like working with us," Ahn says. "We have CRM that customers like to use, and CRM that's actually being used." Related articles: Transactions: Customer Wins for August 17, 2004 PeopleSoft closes the largest client contract in its history. Oracle Wins Antitrust Suit Many barriers remain in the company's quest to purchase PeopleSoft. PeopleSoft's New Partnerships and Products The company announces product improvements and a reselling agreement with IBM.