IBM, PeopleSoft form alliance

SAN FRANCISCO — IBM and PeopleSoft on Tuesday announced that PeopleSoft will standardize its applications on core IBM middleware products and that both companies will market the joint solutions.

In concert with the deal, officials from both companies also announced they have jointly funded the creation of a business process interoperability lab where programmers from both companies will work to integrate, customize, and test the interoperability of their applications.

In his opening keynote at PeopleSoft’s Connect user conference here on Tuesday, PeopleSoft Chief Executive Officer Craig Conway lavished praise on IBM, calling it the company with “the most proven, trusted, tungsten-strength middleware.” He also took the opportunity to blast SAP, whose applications compete with PeopleSoft’s and whose new middleware platform vies with IBM’s. SAP’s NetWeaver middleware software is “young, largely acquired, and incomplete,” Conway charged.

PeopleSoft and IBM will together invest $1 billion over the next five years in their joint activities, Conway said. Both will still remain flexible enough to serve customers using other applications or middleware foundations, he said. “Neither company has an ulterior motive. Both companies have been devoted to open architecture from the beginning.”

PeopleSoft’s move toward embracing IBM’s middleware echoes one made by J.D. Edwards in 2002, before its acquisition by PeopleSoft. J.D. Edwards decided to standardize around IBM and integrate its middleware into its own applications.

“When this is all said and done, it is fair to say there will be thousands of software developers from IBM and PeopleSoft working together to optimize their applications and solutions to IBM’s middleware. I think it takes this relationship to another whole new level,” said Buell Duncan, general manager of ISV and Developer Relations for IBM.

The deal calls for PeopleSoft to integrate IBM middleware and development tools, including key pieces of WebSphere Portal, WebSphere Business Integration, WebSphere Application Server, WebSphere Studio Application Developer, and DB2, with its flagship applications.

Besides PeopleSoft applications and IBM middleware, the jointly marketed solutions will be made up of various third-party software, and services from both IBM’s Global Services unit and PeopleSoft’s services organization, officials from both companies said.

Duncan emphasized the agreement is not an exclusive one and does not affect any other deal it has with any other major enterprise-level applications developers, including Siebel Systems and SAP.

“We have already started on the infrastructure integration aspect of things. The first set of products should be available in the first quarter of next year with the deal calling for the work to continue over the next three years and evolving long beyond that,” Duncan said.

Duncan said that first wave of products and solutions early next year will target the banking and financial services markets as well as for the insurance and telecommunications industries. For instance, the solutions for the telecommunications industry will be built on IBM’s Service Provider Delivery Environment framework that includes Customer Profitability Management, Network Lifecycle Management, and Customer Loyalty and Retention.

The new business process interoperability lab will reportedly reduce the time and effort necessary for pre-testing new standards and application integration from multiple vendors. Both users and business partners will be able to more quickly respond to sometimes rapidly changing business needs, officials from both companies said.

“As we continue to connect and optimize our business processes across organizations, we’ll need an application infrastructure solution that can work with our heterogeneous IT environment and reduce integration costs,” said Vic Koelsch, vice president and CIO of the Michelin Group. “This platform looks like it should allow us to deploy solutions faster,” he said.

Officials from both companies said they intend to craft a definitive agreement that covers all aspects of the alliance sometime during this year’s fourth quarter.