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The PeopleSoft Spirit Lives on

August 4, 2005

PeopleSoft is one of those Silicon Valley stories that just won’t die. Even though the company is rapidly being absorbed by Oracle, former PeopleSoft executives seem to be popping up all over, keeping its legacy alive.

    PeopleSoft’s founder, Dave Duffield, is leading the charge. The former CEO is putting together a company that is developing new software technology based on ease of use, adaptability and cost reduction, which sounds a lot like his early strategy at PeopleSoft.

    Elsewhere, PeopleSoft alums have moved into CEO positions at different software manufacturers or have been appointed to boards of a variety of startups and developing companies. Their experience at PeopleSoft is a huge asset for startup technology companies that have plans for growth or want to go public.

    "Everyone wants to be the next PeopleSoft in terms of rapid growth, in terms of seizing on a large market opportunity," says Jason Corsello, senior analyst with the Yankee Group.

    Companies that own PeopleSoft software are being courted as aggressively as the company's former executives are. Oracle wants to hold on to longtime PeopleSoft customers, rival SAP would like to steal them, and numerous niche software vendors see opportunities to get cut in on the business.

    If Oracle has its hands full with competitive pressures, it’s because PeopleSoft was much more than just a technology firm with good marketing. It was a company built in large measure on customer service, hitting the market at the right time and utilizing the risk-taking entrepreneurial spirit of Duffield and people he brought into the company.

    A somewhat goofy incarnation of that spirit was the Raving Daves, a band named after Duffield and formed by musically inclined employees who pulled out their guitars when they needed breaks during long days.

    As the company caught on, so did the Raving Daves, who went from impromptu hallway jam sessions to playing before as many as 12,000 people at the Superdome in New Orleans.

    "I’d often look out at the big crowds and ask myself, ‘How did this happen?’" says Baer Tierkel, the early leader of the band and self-described geek who spent 10 years as a PeopleSoft executive.

    PeopleSoft’s credibility, of course, had more to do with its deep appreciation of its customers and their needs than its employees’ musical chops. It was "a great company; HR people loved it," says Phil Fersht, research director for EquaTerra.

    Competition for the company’s goodwill is fierce. German software company SAP may have the most to gain. Oracle, Fersht says, "is under serious threat from SAP" in the fight to convert PeopleSoft customers.

    "SAP is very smartly using the human resources outsourcing channel to win over PeopleSoft customers," Fersht says. "Oracle needs to better understand the HR BPO market. SAP has definitely taken a jump on Oracle."

    Paul Salsgiver, a former president of one of PeopleSoft’s divisions, says Oracle is going to have a hard time bottling the formula that made the erstwhile software company great.

    "We are people who like to create things," Salsgiver says. "We are not bashful about taking an idea and creating a product out of it."

    These days Salsgiver is CEO of Aspectrics, a company built around a unique technology that can instantly get readings on the chemical properties of liquids, solids and gases. Salsgiver is borrowing heavily from his experience at PeopleSoft. Just as he once sought feedback from colleges and universities to help develop PeopleSoft applications for higher education, Salsgiver is going straight to his customers for feedback in developing products for Aspectrics.

Market innovator
    For 16 fast-paced years, PeopleSoft was one of the darlings of the Silicon Valley, a technology growth machine whose stock doubled four times during the 1990s boom. It showed the business world that advanced, sophisticated and cutting-edge software could be applied as strategically to workforce management as it could to finance, payroll and manufacturing.

    The innovation PeopleSoft brought to the market was client/server software that allowed human resource managers to move away from bulky mainframe computers and work with data and workforce management tools at their desktops.

    Early customers who took a chance on the new technology were Monsanto, Eastman Kodak, the Tennessee Valley Authority and the state of New York.

    By the time Oracle targeted the company for the takeover, PeopleSoft had grown from a handful of people to a global workforce of 12,000, with annual revenue approaching $3 billion after its acquisition of JD Edwards and Co.

    Jeff Carr, now executive vice president of global sales and marketing for Taleo, was one of PeopleSoft’s first 50 employees. He was in sales before the company went public in 1992 and rose to the presidency of a PeopleSoft division.


"When we began rolling out our products, HR was a very underserved market... We captured the hearts and minds of that market."
--Early PeopleSoft employee Jeff Carr, now executive vice president of global sales and marketing for Taleo


    "Dave Duffield was a visionary who could look around corners and see trends before anyone else," Carr says. "He bet the company on client/server and Windows at a time when others still saw it as risky technology."

Because it was a new technology, customer service became Duffield’s mantra.

    "When we began rolling out our products, HR was a very underserved market," Carr says. "Human resources reported up to the CFO. Payroll and financial applications ruled, and employees were seen more as an expense rather than value added. Our early focus was talent and human capital management. We captured the hearts and minds of that market."

Focus on service
    These days, the products Carr sells belong to Taleo, formerly known as Recruitsoft. Carr and several other executives from PeopleSoft, including Taleo CEO Michael Gregoire, are using what they learned at their former employer to help Taleo grow. The private company is gearing up to go public, just as PeopleSoft once did, and is developing a suite of workforce management products.

    Another former PeopleSoft executive, Jason Averbook, co-founded the consulting firm Knowledge Infusion with Heidi Spirgi, also a PeopleSoft alum. Knowledge Infusion has jumped from three employees to 75 in a matter of months following the Oracle takeover, Averbook says.

    Averbook’s company helps PeopleSoft customers develop their software to get more strategic use from it.

    "The hope is that we can help HR departments not take five steps back because of the acquisition of PeopleSoft, but take five steps forward to drive strategic value," he says.

    SAP, the German software giant, picked up two former PeopleSoft vice presidents, Mark Lange and John Zepecki.

    Phil Wilmington, a co-president at PeopleSoft at the time of the takeover, landed as CEO of Outlooksoft. Kevin Parker, the other co-president and CFO of PeopleSoft, is now CEO of Deltek Systems, which hopes to compete against both Oracle and SAP for a share of what once was the PeopleSoft market.

Ronald Codd, a former PeopleSoft vice president and CFO, today sits on the boards of six technology companies. When he was with PeopleSoft, he helped steer the company from $15 million in annualized revenue in 1991 to $1.5 billion when he left at the end of 1998. During that span, the number of employees rocketed from 75 to 7,000.

    Codd captures much of the spirit of early PeopleSoft executives and what makes them so valuable to developing technology companies: They’re not afraid of risk, and many like small companies.

    Codd says he made that clear when Duffield offered him a job.

    "I said, ‘Gee, Dave, I really think I can do this job, but I want to be honest with you: When we get to $300 million or thereabouts, I am not sure I want to continue,’ " Codd says.

    "Dave got a good laugh. He had told people he didn’t want the company to be more than 50 people. He was very worried about losing that vibrant entrepreneurial energy that a team can have together."

    Today, Codd is passing on what he learned during PeopleSoft’s growth years to companies whose boards he sits on. It gets back to listening to the customer.

    "Customer focus is absolutely critical to about 99 percent of the companies out there," he says. "We were always on the cutting edge with technology. People were betting their careers when they came with us, and we wanted to do right by them."

    Former PeopleSoft workers have formed a thriving Web-based alumni association organized by Steve Tennant, who worked at the company during the boom years.

    Tennant figured that after the Oracle takeover it would be fun to get together with other PeopleSoft alumni and have a few beers occasionally. He put out feelers and had 1,300 members in no time at all, Tennant says. His Web site, www.psftalumni.net, is particularly popular with recruiters. It now has 700 recruiters registered, Tennant says, and they have posted 3,000 jobs.

    "It just took off," he says. "It was beyond my wildest expectations."