Update: PeopleSoft beats out competitors for mega deal

PeopleSoft trumped SAP and Oracle by landing a $50 million software deal with Mexico's tax collection agency.

Amid its ongoing takeover battle with Oracle Corp. and in the aftermath of a poor earnings report, PeopleSoft Inc. today had some good news to tell.

The Pleasanton, Calif.-based company has closed a deal with the Tax Administration Service (SAT), Mexico's version of the Internal Revenue Service. The deal, for more than $50 million in software and services, is the largest in PeopleSoft's history.

The agreement harkens back to the early days of CRM and ERP deployments when organizations invested heavily in big rollouts.

"Candidly, there are not a lot of these huge deals out there," said George Ahn, vice president and general manager of PeopleSoft CRM. "When there are, they're competed for aggressively. Winning these deals is very important for the leaders in these industries."

Don't expect these sorts of deals to continue, said Liz Roche, vice president of technology and research services with Stamford, Conn.-based Meta Group Inc.

"This is unusual," Roche said. "We're seeing much smaller deals and more frequent purchases."

Vendors are looking to Latin America as the next big market, Roche said. Even though the region's infrastructure tends to trail North America and Asia, it is also under penetrated.

After a three-month testing period, PeopleSoft said it beat out Germany's SAP AG and Redwood Shores, Calif.-based Oracle Corp. Three external academic and research agencies assisted SAT in the process, choosing PeopleSoft for its functionality, flexible support of business processes and performance in the testing environment, PeopleSoft executives said.

The evaluation process was especially stringent, and the vendors were asked to install their systems for testing, according to Steve Roop, PeopleSoft's vice president of product marketing.

SAT purchased the software in an effort to consolidate and integrate databases from 66 collection centers nationwide. The World Bank, which financed the deal, estimates that SAT can dramatically reduce tax evasion and increase revenue by improving collection operations.

SAT has licensed PeopleSoft's Enterprise line of software for financial management, CRM, ERP and portal.

This mega deal comes at a time when some potential customers have shied away from PeopleSoft, fearing that Oracle will succeed in its hostile takeover attempt. Ahn said that obviously wasn't a big concern for SAT.

PeopleSoft wasn't the only company to announce a customer win this week. San Mateo, Calif.-based NetSuite Inc., a hosted provider, signed on the Oakland A's baseball team for its CRM and order management system.

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