PeopleSoft Wins Big In Mexican Tax Deal

PeopleSoft Inc. last week said it signed the largest software and services deal in its 17-year history, valued at more than $50 million. The deal with Mexico's Tax Administration Service, the equivalent of the Internal Revenue Service in the United States, also is significant because PeopleSoft traditionally hasn't had a strong presence in Latin America, the company said.

The deal's scope is surprising, says Yankee Group analyst Mike Dominy, not just for PeopleSoft but for the industry at large. "The day of the megadeal is well past its prime," he says. The project includes financial-management, customer-relationship-management, and portal software, and is expected to take two years to complete.

The software's ability to easily make changes in application processes secured the win, says Enrique Perezyera, senior VP for Latin America at PeopleSoft. "Tax regulations change after the end of every year, so the applications and business processes have to change immediately to respond to those changes," he says. Mexico's Tax Administration Service couldn't be reached for comment.

The bidding process began about nine months ago, long after Oracle made its hostile takeover bid for PeopleSoft. In a research note released this week, Forrester Research recommends that customers buying new licenses insist on maximum protection under PeopleSoft's customer-assurance program, in which the vendor offers two to five times license-fee refunds as an insurance policy in the event of a takeover, to be paid by the PeopleSoft acquirer.