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Peoplesoft, Siebel predict rosy Q3

Corporate licences make for happy software vendors

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Peoplesoft and Siebel Systems have both raised their third quarter revenue guidance, based on an increase in sales of corporate licences.

Siebel now reckons on beating its original revenue forecast of $306m for the quarter by just over 3.5 per cent, while Peoplesoft upped its guidance by 6.2 per cent, forecasting income of between $680m-$695m.

The news will disappoint the spin doctors at Lawson Software. Last week, the enterprise software maker issued a revenue warning, blaming "lower business activity, longer customer decision cycles, and contract deferrals" for poorer than expected performance. The company promptly announced a re-org, in which 100 jobs in the US and the UK were to be axed.

Evidently, market conditions have been kinder to Peoplesoft, even though it is the subject of a hostile takeover bid. Along with Siebel, Peoplesoft attributed its better fortunes to an increased willingness among corporate customers to sign new licences.

Siebel's licence revenues will be up 10 per cent on last quarter, accounting for $104m of their total income. The share price rose around 14 per cent to $9.41on the news, and at the time of writing, has settled back to $9.34.

Peoplesoft expects revenues of between $155m-$165m from licenses, and has signed 34 million-dollar plus deals already, as compared to 23 in Q2. It also reported an increase in average contract value: that figure stands at $454,000, as compared to $346,000 last quarter.

Peoplesoft stock remained relatively calm at $22.20, but there is still plenty of uncertainty about the firm's future. Oracle $7.7bn hostile takeover bid is still in the offing, and a green light decision from the European Commission is expected soon.

Oracle is in court in the US trying to remove barriers to the bid, such as money back guarantees issued to customers, erected by Craig Conway, who was fired last week. The board said it had lost confidence in his ability to lead the company. He is scheduled to appear as a witness in the Delaware Chancery Court this Wednesday. ®

Related stories

Oracle asks court to remove PeopleSoft poison pills
Peoplesoft sacks Craig Conway
EU to approve Oracle takeover - reports

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