Sun Forges Key CRM Deal with PeopleSoft

Long-time partners Sun Microsystems Inc. and e-business software maker
PeopleSoft Inc. Wednesday embarked on a new global alliance aiming to place
PeopleSoft’s customer relationship management (CRM) products in Sun’s
Solaris 8 operating
environment and Java-based platforms.

The strategic deal between the firms, whose allegiance to each other dates
back to 10 years, would be attractive to brokerage and communications firms
who may want to beef up their sales, service and marketing capabilities with
the aid of companies whose hardware and software work harmoniously. Sun
already enjoys client relationships with 20 of the world’s top 25 brokerage

For the Charles Schwabs of the world, the deals equates to reduced
implementation time, lower total cost of ownership, and improved customer
service. Ditto coms firms like AT&T Wireless or Sprint PCS — including
wireless, broadband, and satellite providers — which may raise the
competition bar with faster product launches and more effective marketing.

Strategically for Sun, the play is a shot at IBM Corp., which has spent
recent months roping in software vendors to keep them from dumping its
hardware in favor of Sun’s servers, which, according to a March IDC study,
hold the greatest market share in the U.S. IBM has recently inked similar
deals with J.D. Edwards, Siebel Systems Inc., i2 Technologies Inc., Vignette
Corp. — and yes — even PeopleSoft.

Go beyond the box of the Sun/PeopleSoft deal for a moment; it is the UNIX
market where Sun enjoys such sweet success. In the fourth quarter in the
UNIX market, according to IDC, Sun maintained its lead in UNIX as a whole
while the entire market for servers grew 7 percent to $60.2 billion in
factory revenues last year, with fourth quarter sales up 14 percent to $16.7

In a separate release today, Sun took a more direct shot at IBM by claiming
that its Sun Fire servers have captured the lead in Java technology
performance by beating Big Blue in a benchmark test by 35 percent.

Speaking of benchmarks, a recent test gave Sun and PeopleSoft both reason
enough to smile and nod. In an era where hardware/software vendor
partnerships can hinge on speedy transactions, Sun’s Senior Vice President
of Market Development Doug Kaewert said in a conference call Wednesday that
a test showed that more than 20,000 concurrent customers where served in a
little more than half a second.

As for the particulars of the deal, for which financial terms were not made
public, Sun and PeopleSoft will engage in joint sales, services and
go-to-market activities. The companies will also combine engineering efforts
and work with customers in Sun’s iForce Ready Center locations to create
proof of concepts and develop architecture blueprints.

“This announcement highlights Sun as a preferred platform for CRM in the
communications and brokerage industries,” said Craig Conway,president and
CEO of PeopleSoft. “PeopleSoft CRM leveraging Java technology on Sun
Enterprise Servers will give customers industry-leading scalability and
functionality. Together, we will help companies get closer to their
customers and manage more profitable relationships.”

The deal is also a nice win for PeopleSoft, whose Vice President of Product
Marketing Robb Eklund said enjoys a 43 percent market share in enterprise
applications. Eklund said quality CRM tools prevent lost revenues by making
sure that customers are able to connect with businesses as quickly as

The deal is also indicative of the push among software vendors to create
multichannel solutions, which center on the idea that if a Web business is
set up, the people who create it have to be prepared for wild success.
PeopleSoft, in particular has trumpeted its plan to make customer-facing
software its top priority in 2001.

The software maker has developed a customer interaction center application
and the ability for companies to access customer, sales and marketing
software from WAP-enabled phones.

The center lets companies gain access to customer data through a single
point of contact via Web sites, e-mail, phones or handheld devices.

Giga Information Group analyst Erin Kinikin said no company — even giants
like PeopleSoft and Siebel Systems — have achieved true multichannel access
just yet.

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