Why PeopleSoft needs IBM's WebSphere
by Staff -- Manufacturing Business Technology, 11/1/2004 12:00:00 AM
PeopleSoft surprised industry observers with its September announcement that IBM WebSphere would be the standard integration platform for PeopleSoft applications. But this plan follows PeopleSoft's history of buying rather than building to stay competitive.
The most obvious example of this strategy was PeopleSoft's 2003 acquisition of J.D. Edwards. That deal gave PeopleSoft the manufacturing functionality it had been trying to add to its portfolio since 1996, when it purchased an advanced planning & scheduling vendor called Red Pepper (see acquisitions timeline.)
Some analysts suggest this alliance sets the stage for IBM to buy PeopleSoft, thus protecting PeopleSoft from the still-pending hostile takeover attempt by Oracle. Both PeopleSoft and IBM deny any talk of a possible merger, which would violate IBM's longstanding policy of avoiding the application business.
The more likely possibility is that PeopleSoft sees WebSphere as its answer to the NetWeaver integration platform that enterprise market leader SAP introduced nearly two years ago. In announcing the WebSphere strategy at the company's recent user conference, former PeopleSoft CEO Craig Conway called NetWeaver an answer to limitations in SAP's R/3 enterprise package. "They couldn't Web-enable their product with a third-party application server," he said. "So they had to develop their own platform."
Conway said PeopleSoft, by contrast, had always built its applications to work with other vendors' products, and it never planned to offer a middleware platform. "We think customers need to get middleware from a specialist in that area," he said.
PeopleSoft did in fact start development of an integration platform, called AppConnect, but apparently that project was not progressing fast enough to counter the market momentum that SAP was gaining with NetWeaver.
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