NEWS Excluding revenue gained from a large acquisition, PeopleSoft's software licence revenue declined by more than 20 per cent last year compared with 2002, the company disclosed in a regulatory filing.
The revelation supports rival Oracle's claims that PeopleSoft's sales have declined more sharply than those of its other competitors. Oracle is pursuing a hostile $9.4bn acquisition of PeopleSoft and now faces a court battle to prove the proposed merger would not harm competition, as federal regulators have charged.
With last week's filing, PeopleSoft reported for the first time that its purchase last year of JD Edwards contributed $114.9m in licence fees to its 2003 revenue. Previously, the company had lumped revenue from JD Edwards and the rest of its software business together, obscuring the financial picture of the separate units.
Licence fees at Oracle and SAP, PeopleSoft's two closest competitors, also declined in 2003, but not as much. SAP's license revenue declined six per cent in 2003. Oracle, which ends its fiscal year on 31 May, reported a 14 per cent slide in application licence fees in 2003. But in the six months of June through December, Oracle grew its applications licence revenue by 11 per cent.
In the enterprise software industry, licence fees indicate how well a company's core products are selling, and they're regarded among Wall Street analysts a key indicator of financial health.
PeopleSoft completed its purchase of JD Edwards on 18 July, an acquisition the helped the company leapfrog Oracle to become the number two business applications company in the world behind Germany-based SAP.
PeopleSoft blames the drop in 2003 licence revenue on disruptions caused by the US-led invasion of Iraq last year and slack software spending by government agencies, a traditional stronghold for the company. PeopleSoft executive have also blamed Oracle for falling sales, claiming that the hostile bid has scared some potential customers away.
Alorie Gilbert writes for CNET News.com
