This win has multi-dimensional importance for PeopleSoft. First, it should boost the Company's dismal software license revenues in 1999 (down 58% compared with the first 3 quarters of 1998). Second, PeopleSoft badly needs a stronger market penetration outside the North American market, and this contract provides needed credibility. Third, the scope of the first project's phase is finance and accounting, which is not necessarily regarded as PeopleSoft's strongest area of competence. We believe that PeopleSoft is now in the sweet spot for the next phase of project, which will involve HR system implementation, where PeopleSoft is a recognized functional leader. As a summary of our recommendations in TEC's note on PeopleSoft (See TEC Technology Research Note: "PeopleSoft - Are Business Intelligence and e-Commerce Enough?" ), PeopleSoft is a very strong contender in enterprise application selection processes within the following industries: utilities, service providers, financial institutions, public sector, insurance, and higher education. It should be on a short list in any selection where HRMS system and financial modules are the main pillars of an enterprise application. However, organizations currently evaluating PeopleSoft should keep a close eye on PeopleSoft's future product development and support strategies, particularly how top management will address poor market perception of its manufacturing software.
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