PeopleSoft acquisition of Vantive to help lead them into the new millennium

To buy, to build or to partner seems to be the credo of the high technology sector. For PeopleSoft Inc., the desire to enter the world of customer relationship management led them to acquire Vantive Corp. late last year.

According to Craig Conway, CEO of the Pleasanton Calif.-based software company, the acquisition was made after much research and many meetings. He told the audience at Vantive 2000, the company’s June CRM customer conference in San Francisco, that PeopleSoft took several years to decide on Vantive.

“Three years ago we felt that PeopleSoft could play a leading role in customer relationship management,” he said. Conway continued by saying that PeopleSoft decided on Vantive after about two years, and it was at this point the company had to decide whether to build, buy or partner. Members of his team talked to customers and analysts, and then met with about 15 CRM vendors. The more research they did the more they realized that Vantive was the company for them, Conway said.

Vantive was already integrated with PeopleSoft, making the transition easier, he added. And in some cases Vantive was ahead of the game. “Vantive had actually executed better than we had executed. By the time we had come together with Vantive, it already had 300 customers running the Vantive product through the Internet architecture.”

So what does PeopleSoft have to offer in return?

“The first thing was financial resources. PeopleSoft has US$835 million in cash and US$200 million in a development fund on top of that…to commit to what ever we want to commit to,” he said.

But Conway made it clear that the benefits were not limited to money. PeopleSoft’s geographic coverage, available in 92 countries, would also help the Vantive product gain true global access, he said. Conway also pointed to PeopleSoft’s management strength and ability to instantly transfer resources to Vantive as the other key factors in helping Vantive succeed globally.

Conway concluded by saying that though the products will be fully integrated, the true value proposition is the company’s dedication to have absolutely the best CRM product on the market.

“We will maintain the same high level of customer satisfaction with the Vantive product line as we have with the other PeopleSoft product lines,” he stressed.

Sam Gallucci, the executive vice-president for CRM who joined the company in May, spoke in more general terms about the state of the world of high technology. He said a lot of technological innovations occurred after the break-up of AT&T, when the line between computing and communications became less distinct.

He said one of the big changes was the move from muscle to might to mind, where those who controlled the economy moved from the strongest, to the wealthiest to those with the most information.

The business world has been set on its head with changes never seen before, he added. “When you see a two billion dollar company have a lower market cap, with 8,000 employees, than a 12 million dollar company with 100 employees and losing significant revenue, you have got corporate America’s attention like you have never had before.”

Michael Schumacher, vice-president of CRM product development, then spoke about the company’s future roadmap. Vantive 8.5.3 shipped in March with a new server architecture and later this year will have an enterprise application architecture based on Java Server Pages Model 2.

“The advantage of this architecture is that it separates business logic from the presentation layer, which means it is a lot easier to go across browsers, it is a lot easier for us to maintain the product and it is going to be a lot easier for you to move to the product,” Schumacher said.

“By Q1 2001 we will have a complete customer interaction centre, completely Web enabled running as a Vantive product…with brand new technology based on Java.”