CRN Interview: Craig Conway, Peoplesoft

PeopleSoft CEO Craig Conway says Oracle's bid for his company has been rejected, but Oracle CEO Larry Ellison says he'll keep fighting to acquire PeopleSoft. Now J.D. Edwards has filed two lawsuits against Oracle. Conway sat down with Washington Bureau Chief Amy Rogers Nazarov and explained how channel partners and customers will benefit IF PeopleSoft's acquisition of J.D. Edwards goES through. Here are some excerpts:

CRN: What would your message be to J.D. Edwards' channel?

Conway: What additional value could be brought to [channel partners] while protecting their investment? [Think about] the investment that some number of [partners] have made in J.D. Edwards. They have learned the architecture and learned the products, they have taken those products to market and implemented them in companies around the world. How could it get better for them? With more products, stronger products, more geographies, more operating systems and hardware platforms [and] better support. Those are some of the [things] a reseller should expect to find while protecting the investment.

CRN: The only criticism I've heard is from some J.D. Edwards partners who say PeopleSoft is not channel-friendly.

Conway: Well, for sure, because we have traditionally sold [to] large enterprises. What [the merger] should mean for resellers is getting their hands on a broader, stronger base of products, taking those to a market that has a better appreciation for a single company called PeopleSoft [and] taking it to more geographies. Look, a company that is [valued at] $3 billion can be in more geographies and offer more support.

CRN: How much services revenue is driven by partners?

Conway: We do not have the expertise that J.D. Edwards has with resellers. The closest we come is the systems integrators,the big ones. Of all of the implementation work done around PeopleSoft applications, partners get approximately 85 percent of it. We estimate that about $1 out of $8 that is associated with the implementation of PeopleSoft [products] goes to PeopleSoft. The rest goes to our partners. That's why companies like PwC Consulting, now IBM; Cap Gemini Ernst & Young; Accenture; Deloitte Consulting; and BearingPoint like us so much. We are not SAP or Oracle. We don't have tens of thousands of consultants; we have 2,700 consultants and whatever J.D. Edwards has.

Now, the reason I wanted to clarify resellers vs. systems integrators is that although we don't have an aggressive reseller program here,or one at all, to be honest,I am very familiar with the reseller channel. This is an organization that takes responsibility for configuring the product and sometimes accepts title on the product and configures it for a customer, [and] makes a royalty or a margin or a commission on the sale. When we look at J.D. Edwards, we are coveting that expertise. We are saying, 'Look, PeopleSoft has gotten where we are without having been successful with resellers.' We tried, by the way, four years ago. Whom did we go to? Accenture, Deloitte. It was like turning to a tank to mow the lawn. [J.D. Edwards] covets our human resources line to bring it to the midmarket. We covet their manufacturing and distribution to bring it up to the large enterprise market. We covet their distribution channels. They covet our service industry expertise.