PeopleSoft boasts strong quarter after JD Edwards acquisition

PeopleSoft has reported record revenue of S$624m and a narrower-than-expected loss.

PeopleSoft has reported record revenue of S$624m and a narrower-than-expected loss of $7.3m.

PeopleSoft's licence fees, maintenance and professional services revenue all increased from last year's third quarter, contributing to its 32% revenue gain. The company declined to break out JD Edwards' contribution to the quarter's revenue, or provide a comparison with last year's quarter, but said the unit's financial impact on PeopleSoft's results was positive.

"JD Edwards has been more than we could have expected," said chief executive officer Craig Conway. "A number of theoretical advantages of combining the company with JD Edwards are actually showing quantifiable results. It's one thing to talk about cross-selling and up-selling opportunities; it's another to actually see a number of cross-selling and up-selling opportunities in the first sixty days."

Conway called the quarter a strong one, and said the results reflect the beginning of advantages from combining PeopleSoft and JD Edwards. More than 170 customers that had not previous purchased from PeopleSoft signed on with the company during the quarter, making it the company's best quarter for new customer signings since 1998.

"It may be the curse of the Oracle tender offer that many people find themselves unable to suspend their disbelief in anything positive I say. But I think for those people, the financial results speak for themselves," Conway said .

Oracle's $7.3bn offer to PeopleSoft's shareholders for control of the company, initiated in June and now extended at least through the end of the year, remains a concern for customers, Conway said.

"I think it's fair to say that every single transaction we did in Q3 came with a requirement to give an update on the Oracle approach. If it's not the first topic, it's certain in the top three topics every customer would like to get an update on."

But the uncertainty created by Oracle's takeover attempt is not preventing deals, even large ones, from going through, Conway said, pointing to the five-year-high number of new customers signed during the quarter.

Several rivals in the industry - most notably, SAP - have complained about price warfare decimating margins for enterprise software sales, particularly since the advent of Oracle's brawl with PeopleSoft.

PeopleSoft chief financial officer Kevin Parker said they agreed pricing is hotly competitive, but denied their company is chopping its price tags.

"The funny thing about a price war is that no one ever seems to start it," Parker said. For two years the software market has been "very, very competitive and almost suicidal at times", but PeopleSoft has held the line on its prices, he added.

Stacy Cowley writes for IDG News Service

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