PeopleSoft has unveiled its direct ASP (application service provider) hosting service, eCenter, which will be offered in 18-month contracts, half of term length of the typical three-year commitment, PeopleSoft officials said.
The move is fairly significant for PeopleSoft because the vendor expects 40 to 50 percent of its licensing revenues over the next two to three years to come from this direct service and its third-party ASP partners, said Craig Conway, president and CEO at PeopleSoft. During the past two years, PeopleSoft has signed up 11 ASP partners with possibly five more to come, Conway said.
"This is a pull market," Conway said. "Customers have found us ... The market is pulling from PeopleSoft this service offering in an unprecedented way."
The 18-month arrangement is meant to make it easy for customers to get the service as well as to disengage from it, said Deepak Gupta, vice president and general manager of PeopleSoft eCenter. Gupta estimated that customers could shave from one-quarter to one-third off IT costs by outsourcing their human resources, financial, and/or supply-chain applications to PeopleSoft.
The pact for this "e-business platform" does not include the "substantial costs" incurred when setting up the service, Gupta said. Users will be charged either on a per month/per user basis or based on an as-yet-undetermined business-to-business model. "Beyond that, they can walk away without cost," he said. "We want customers and not hostages." The monthly charges begin as of the commencement date.
To support its efforts, PeopleSoft will be using its data center at its headquarters to host applications in an environment that includes Sun Microsystems hardware, the Solaris OS, and an Oracle database engine. The partners for the business infrastructure also include Exodus Communications for data center support in North America, Cisco Systems, MCI WorldCom, and Pilot NetworkServices. Although worldwide ASP support will come later this year, "we can host multinational companies," Gupta said.
The PeopleSoft eCenter service is available now for the North American market for the vendor's human resources, financial management, and e-procurement packages. In coming months, PeopleSoft will extend its ASP service for its CRM (customer relationship management), performance management, supply-chain, and tools offerings, officials said.