PeopleSoft Mounts New Push Into Mid-Market
PeopleSoft Inc. is looking down market for opportunities.
The Pleasanton, CA-based company, best known for its enterprise business software, is aggressively courting companies squarely in the mid-market with today's announcement of 13 new products aimed at businesses with annual revenue between $50 million and $500 million. PeopleSoft says it is targeting more than 62,000 mid-market companies with its new offerings.
Although PeopleSoft has had a division devoted to midsize customers for six years, its focus on that growing market is expanding and is now one of the company's top three initiatives, according to Jeffrey Read, vice president and general manager for PeopleSoft Mid-Market.
In 2002, 25 percent of the company's total sales were to medium-size companies and 40 percent of all new sales in 2002 were to mid-market firms, Read says.
PeopleSoft is not alone in moving downward to tap the lucrative mid-market. The company will face stiff competition from other enterprise players. Siebel Systems, SAP, and Oracle have also started to wade in the mid-market pool.
That's because research shows that while enterprises are tightening belts and trimming IT spending, the mid-market is underserved and ripe with opportunities.
Market-Partners, an independent research firm, surveyed more than 700 top decision makers at companies with annual revenue between $50 million and $500 million and concluded that 41 percent of mid-market customers plan to increase spending on applications in 2003.
The survey also states that 46 percent of mid-market organizations demand solutions that are built to support business processes; 48 percent of mid-market companies require a complete suite of applications from one vendor, allowing them to implement the functionality they need, when they need it; and 34 percent of respondents identified integration as the largest hidden cost for mid-market organizations, closely followed by unpredictable numbers of user licenses and training fees.
Read says all that bodes well for PeopleSoft, which offers a suite of applications for human resources, supply chain management, and CRM.
The new products focus on CRM, finances, HR, sales, procurement, and other functions and are versions of the company's enterprise applications specially designed for the mid-market. "The difference is that specific functionality can be turned on or off within the application as needed by users," Read says. "The processes are 70 to 80 percent configured.
"Mid-market companies face the same business challenges as Fortune 2,000 businesses," Read adds. "But they have smaller budgets, smaller technical teams, want faster implementation, and have a much higher aversion to risk."
According to Read, to satisfy those needs PeopleSoft's new products will sell for a set price, including installation and maintenance, and PeopleSoft will allow customers to buy individual software functions separately as their needs grow.
PeopleSoft's latest offering for the mid-market includes the following applications: PeopleSoft Mid-Market Financial Management, PeopleSoft Mid-Market Resource and Project Management, PeopleSoft Mid-Market Sales and Marketing, PeopleSoft Mid-Market Service, PeopleSoft Mid-Market Sourcing, PeopleSoft Mid-Market Procurement, PeopleSoft Mid-Market Fulfillment, PeopleSoft Mid-Market Manufacturing, PeopleSoft Mid-Market Recruit Workforce, PeopleSoft Mid-Market Optimize Workforce, PeopleSoft Mid-Market Reward Workforce, PeopleSoft Mid-Market AppConnect.