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. Sun Microsystems and PeopleSoft agree to deliver CRM solutions to communications and brokerage industries.
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 firms.
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 0.2 billion in factory revenues last year, with fourth quarter sales up 14 percent to 6.7 billion.
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 possible.
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.