At PeopleSoft’s Connect 2004 user conference, CEO Craig Conway claimed that his company and IBM will jointly spend $1 billion in a development alliance to integrate PeopleSoft ERP (enterprise resource planning) applications with IBM’s WebSphere middleware.

John Pallatto, eWEEK.com Enterprise Applications Center editor, interviewed Buell Duncan, IBM’s general manager of ISV and developer relations, about the significance of this alliance to both companies.

PeopleSoft has described this as the most significant enterprise applications alliance in the history of the two companies. What makes it so?

I think the sheer size and the impact of PeopleSoft’s business in the market as an application provider second only to SAP. And if you look at the breadth and depth of the commitment on PeopleSoft’s part, it makes this a very significant agreement in the market for both companies.

Read more here about the IBM-PeopleSoft deal.

Why is it is going to cost as much as $1 billion to integrate PeopleSoft applications with WebSphere? Is that really an accurate and fair estimate?

I believe that was an estimate that [PeopleSoft CEO] Craig Conway discussed in the press conference. So, I wouldn’t be in a position to give you an exact dollar amount. I would tell you that, put in the context of over the five years of the agreement, IBM will invest the significant technical resources in the hundreds really dedicated to this effort to work side by side with the application programmers at PeopleSoft.

We will also increase the amount of go-to-market activities that we do from a marketing standpoint to generate leads and demand as we do with other partners. But again, the sheer size of PeopleSoft’s business and the breadth of their commitment to IBM middleware make this a very positive step forward for both companies.

How is this different from the many software alliances that IBM establishes every year?

You bring up a very good point. Of course, we are not in the applications business, and we are very committed to partnering with companies. It’s not a matter of just a few partnerships. It’s not even about dozens. But literally thousands of companies that we work with that embrace open standards—those companies that want to build those applications and deliver them with IBM middleware and IBM e-server offerings.

What makes this one different is the size and the number of end-users that it will ultimately reach. I want to be very clear: What is exciting is the amount of feedback that we have gotten from the market from other IBM partners who view this as a very positive announcement, and from other partners who use other middleware infrastructure from some of our competitors who are saying they also would like to talk to IBM about similar type of agreement.

And of course, that is exactly what we would like to do because we believe in the importance of having many partners to give us the broadest reach to the marketplace.

How do IBM and its customers benefit from this particular alliance?

There is no question that the customer feedback has been strong, and it has been strong because this allows PeopleSoft to do that they do best, and that is building world-class, industry-specific applications. And it allows us to [focus] on what we do best, and that is building the infrastructure that really has become the industry leader.

You know WebSphere is the market share leader today, and I think our customers have the confidence to know that as we are teaming up more closely to deliver these solutions together, this is real benefit to them.

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