PeopleSoft is to unify the pricing models for its Enterprise software line and the EnterpriseOne line built around the applications it picked up through its August acquisition of JD Edwards. The changes will alter the licensing structure JD Edwards customers are accustomed to.
After the JD Edwards acquisition, PeopleSoft formed three product lines: Enterprise, a portfolio containing its traditional applications; EnterpriseOne, a rebranded suite of JD Edwards applications; and World, the portfolio for JD Edwards' legacy AS/400 World software. Rather than mingling code bases, PeopleSoft will maintain the three brands indefinitely.
PeopleSoft and JD Edwards had different pricing strategies, however. PeopleSoft uses what it calls a "value-based pricing" model, in which its software has no list prices. Fees are calculated according to a number of factors, including a customer's size, industry and annual revenue. The licenses usually cover an unlimited number of users. JD Edwards had a more traditional, per-user licensing model for its applications and modules.
"We're been doing a lot of work to roll out a single pricing model next year. We're moving more toward the PeopleSoft model," said Les Wyatt, a former JD Edwards executive now serving as general manager of PeopleSoft's EnterpriseOne line.
The change will affect only Enterprise and EnterpriseOne customers; World, for which additional licences are sold almost entirely into the existing base of around 3,400 customers, will continue to be priced on a per-user basis. EnterpriseOne also has around 3,400 customers.
The change will affect EnterpriseOne customers as they license new modules from either the EnterpriseOne or Enterprise product lines. Maintenance fees for EnterpriseOne are also likely to rise, Wyatt said, though he noted that JD Edwards had been raising its maintenance charges steadily throughout the past three years.
Details of the pricing changes are still being worked out.
"One of the things we don't want to do is move to a model that arbitrarily and dramatically increases our prices," Wyatt said. "Our users will be paying roughly the same amount."
PeopleSoft's pricing plans will be finalised and implemented in the first quarter of 2004, most likely in January.
At the same time the company will unify its sales force, which since the JD Edwards acquisition has remained separate. Sales executives will specialise by region and industry, but every sales employee will be able to sell every PeopleSoft product.
Stacy Cowley writes for IDG News Service