PeopleSoft has entered into an alliance with IBM that would see the two companies expand their global partnership and grant IBM resellers, who service the small to mid-market business (SMB) space, the opportunity to offer PeopleSoft applications.
On top of that, PeopleSoft is releasing World
Express, an SMB solution that includes the company’s World enterprise applications and more than 30 other industry-specific business process and implementation services.
The plan is expected to add well over 100 new IBM-focused resellers to PeopleSoft’s channel base worldwide.
For PeopleSoft Canada, the IBM arrangement opens up an opportunity the subsidiary did not have in its channel strategy, said Andy Aicklen, vice-president and managing director of Toronto-based PeopleSoft Canada.
“”This deal really helps us more in the west and in Ontario and it gives us some leverage. We will work with IBM properly and not abuse the channel partners we have now,”” Aicklen added.
While the strategy worldwide for PeopleSoft is to recruit more partners, that is not necessarily the case in Canada.
“”The strategy here is not to recruit hundreds of partners. We are going to focus on the product skill sets of partners and make sure they are profitable, especially with I Series,”” said Gary Issacs, director, partners, Canada for IBM Canada Ltd. of Markham, Ont.
Isaacs added that 80 to 85 per cent of iSeries sales in Canada go through partners. “”These are the partners who are building solutions and this base of partners can be leveraged (by PeopleSoft),”” he said.
Dave Siebert, general manager and group vice-president of the PeopleSoft World product line for PeopleSoft, currently pegs the total number of partners worldwide at 50, which he said is not enough for the company to properly reach the small-to-mid size market.
PeopleSoft World is from the J.D. Edwards One World product line, which it got when PeopleSoft acquired J.D. Edwards last year.
Siebert envisions PeopleSoft’s partner base growing to more than 200 worldwide. In the Canadian market, he forecasts the subsidiary to have between six to 10 partners. In the U.S. market, he believes the total number of partners could reach as high as 40, but realistically it would be 30.
“”Time will tell,”” he said.
Currently PeopleSoft’s indirect sales are only 10 per cent of overall sales worldwide. He added that the company hopes to grow that number to 20, and possibly even 40 per cent. However, this indirect growth will not be at the expense of the company’s direct business.
“”We are going to grow the pie and Canada will be a part of that. We want Canada to have local coverage so that PeopleSoft has a strong presence,”” Seibert said.
One of the channel concerns that Siebert wanted to dismiss is that PeopleSoft software is too costly for the SMB market here.
He said that a 30-user PeopleSoft World Express solution including hardware, installation and services would cost under $100,000.
Siebert broke it down this way:
- Hardware for 30 users using iSeries servers is between US$20,000 to $22,000;
- Two-week implementation at US$175 or more an hour would be about US$14,000 to $15,000; and
- The software would be about US$20,000 to US$25,000.
Margins for partners would be between 40 to 60 per cent if they include services, Siebert added.
Distribution will not be in PeopleSoft Canada’s plans for now. Aicklen said in reality PeopleSoft channel is a “”work in progress””. “”Before we acquired J.D. Edwards we tried to be a mid-market player for at least the last three years. At this point, we are trying to create a channel. I want to get it right today then when the volumes are high enough I would consider a distribution model,”” he said.
The two companies also announced they will collaborate on a new Linux program.