oh shit, boys & girls, Conway's in the lunchroom and he's got senior cuts.
i think we're having pizza -- someone pass him the crushed red pepper.
yuk yuk.
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October 18, 1999, Issue: 757
Section: Top Of The Week: Customer-Relationship Management
PeopleSoft CEO: "We Cut Ahead In Line"
Alorie Gilbert
techweb.com
PeopleSoft Inc. CEO Craig Conway, who led the move to purchase customer-relationship management vendor Vantive Corp. for $433 million last week, is confident the deal will propel PeopleSoft ahead of its competitors in the fierce enterprise applications market. "We cut ahead in line," he says.
Analysts note that PeopleSoft is late to the CRM game, but the vendor began evaluating its front-office strategy last fall. The process ended three weeks ago at the Stanford Hotel restaurant in Palo Alto, Calif., where Conway met with Tom Thomas, president and CEO of Vantive, to discuss merging the two companies. The deal's appeal? Vantive offers a strong, mature front-office product, while PeopleSoft can shore up sales, support, and marketing.
But while PeopleSoft had partnered with Vantive for years, Conway says Vantive was by no means the obvious choice -- "because we knew them best, we thought there was a better company out there." Vantive, meanwhile, was entertaining a number of other suitors (Thomas declines to name names).
But Vantive's asking price surely heightened the appeal for Conway: Siebel Systems Inc.'s market capitalization is larger than PeopleSoft's, and the $1.2 billion market cap of Clarify Corp., the next CRM heavy-hitter in line, was beyond PeopleSoft's means. And though he's a personal friend of Siebel CEO Tom Siebel, Conway's discussions with the head of the largest CRM vendor didn't strike a match. "We're in a sweet spot; we're not interested in the back office," says Pat House, Siebel executive VP and co-founder.
When Conway finally approached Vantive to make a deal, neither party dragged its feet -- it took just two weeks to sign an agreement. "Time was of the essence," says Thomas, who'll become general manager of the PeopleSoft CRM product line when the deal closes at the start of next year. "We were anxious to get moving, to go to market while we still have a chance to take a lead."
Still, Conway realizes he's got his work cut out for him. PeopleSoft's acquisition of supply-chain vendor Red Pepper in 1996 is a good example, he says, of how not to do an acquisition. "We squandered Red Pepper," he says. To avoid making that mistake again, he'll keep much of the Vantive organization intact. "If anything, we'll staff up," Conway says.
Given the crunch to rush a product to market, Conway admits the deal would have been better done a year ago. "But that doesn't mean the opportunity is gone today," he says. AMR Research projects the market will grow from $3.7 billion this year to $16.8 billion in 2003. And like his cohorts in the ERP market, Conway wants a chunk of those front-office funds. |
