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PeopleSoft Moves Ahead, Unveiling Major IBM Alliance 2

Joint work with IBM is part of strategy to deliver apps that let customers use Web services to build adaptable service-oriented architectures.
One thing Craig Conway has no shortage of is resolve. The CEO of software vendor PeopleSoft Inc. kicked off the company's user conference in San Francisco by unveiling a hugely expanded relationship with IBM, making it clear that, while Oracle's relentless attempt to acquire his company shows no sign of slowing, PeopleSoft is moving full-steam ahead. "PeopleSoft is not slowing down, and we are not changing our commitment to customers," Conway said.

Along with a series of technology announcements, PeopleSoft on Tuesday took the covers off an alliance with IBM that both companies say is the most ambitious they've ever undertaken together. PeopleSoft will bundle IBM's WebSphere middleware products with its applications free of charge, and the two companies will invest $1 billion during the next five years to jointly develop industry-specific software that will capitalize on IBM's WebSphere products. The two also will jointly establish what they say is the first business-process-interoperability lab to test and certify application interoperability.

The expanded relationship with IBM is key to a strategy Conway outlined in his keynote address: Over the next 12 months, PeopleSoft will deliver more adaptable applications to let customers use Web services to build service-oriented architectures. Both IBM and PeopleSoft are committed to helping customers better link applications to create smoother business processes, executives from the companies said at a press conference detailing the alliance. "There's not a company anywhere in the world that isn't talking about horizontal integration," said Steve Mills, senior VP of IBM Software Group.

IBM is deploying teams to PeopleSoft's Pleasanton, Calif., headquarters and will make additional resources available as needed. "This is a very important strategic investment from IBM's perspective, and we're going to back that up," Mills said.

But Charles Di Bona, an analyst with Sanford C. Bernstein & Sons, wasn't impressed with the announcement or PeopleSoft's message about Web services and service-oriented architectures. "I don't think it makes that big a difference," he says. "It's kind of embarrassing that they're just talking about this now. They're so far behind." The alliance is similar to relationships IBM has with many other vendors, and PeopleSoft had to establish a middleware partner if it's not going to market its own infrastructure products, Di Bona says. (PeopleSoft sells an application server, though it trails offerings from IBM, BEA Systems, and others by a large margin.) The primary impact will be on BEA, which was thought to be PeopleSoft's primary middleware partner, he says.

Conway also highlighted PeopleSoft's accomplishments over the past year, most notably the rollout of the company's Total Ownership Experience, a program designed to lower the time and costs related to product rollouts and upgrades. The marriage of J.D. Edwards' manufacturing applications--inherited when PeopleSoft bought the smaller competitor in July 2003--with PeopleSoft's product roster has created the world's most integrated manufacturing system, he said. In the past 12 months, 140 enhancements and 110 regulatory updates were added to PeopleSoft World, and 300 enhancements were added to PeopleSoft EnterpriseOne, including support for radio-frequency identification technology, Conway said. Some 250 additional enhancements are planned for EnterpriseOne by the end of the year.

Oracle's takeover attempt has created a distraction, Conway said frequently. He gave no indication that PeopleSoft is searching for a friendly buyer that could potentially keep the company out of Oracle's hands, indicating instead that he intends to keep the company independent. Oracle's overtures are more of an interruption than a real threat to the company's future, Conway said. "Have you ever had a bad dream that wouldn't end?" he asked, getting laughs from the thousands who packed a Moscone Center's main hall. "We have."