relationship management software would add a product increasingly in demand, officials said.
PeopleSoft's accounting and general ledger software, often called enterprise resource planning or ERP software, is in use by 3,000 customers, including hundreds of banks like Bank of America Corp., Chase Manhattan Corp., and Citigroup Inc.
The Pleasanton, Calif.-based company said last week that it is buying Vantive of Santa Clara, Calif., in a stock deal valued at $433 million. Vantive also sells call center and sales force automation software. The deal is expected to close in the first quarter.
The acquisition would shore up PeopleSoft's ability to compete with other ERP software vendors such as SAP AG, Baan, and Oracle, which also are pursuing the burgeoning field of customer relationship management. ERP systems, with their data-organizing capabilities, feed naturally into customer relationship software, which can sort through reams of data to segment customers by profitability.
"There is virtually no overlap between our product lines and that's why Vantive is a great acquisition for us," said Richard Berquist, chief technology officer at PeopleSoft.
Sales at PeopleSoft and Vantive have slowed in recent quarters, a problem officials attributed to year-2000 fears. PeopleSoft's revenues were $617.6 million in the first half of 1999, up only 3% from a year earlier.
It lost $168.5 million compared with net income of $73 million. The large disparity was attributed to a $176.5 million charge related to its spin off of Momentum Business Applications Inc. earlier in the year. The former PeopleSoft unit develops e-business and analytical software.
Vantive's financial performance is not much better. After a preliminary review of its third quarter, Vantive said revenues would be about $42.5 million, compared with revenues of $41.7 million in the same quarter last year. It said it would lose 17 cents a share, compared with last year's earnings of 4 cents a share.