Raving Dave: the software industry’s eternal teenager
Around 1997, PeopleSoft was the hottest Human Resources Management System (HRMS) on the planet. SAP HR had not yet established itself in the global market. Many of our clients were implementing SAP as an enterprise solution but buying PeopleSoft for their HR application. Apart from its HRMS, PeopleSoft. was also building an ERP in competition with SAP, the market leader. PeopleSoft was successful in certain industry verticals like the Banking and Financial Services and in 1996 it had acquired Red Pepper which was in manufacturing and supply chain management
There was one catch. PeopleSoft did not have an office in India and did not have an India version. Therefore, no one except a limited number of global companies were implementing PeopleSoft.
I found out from my US partners that there was a high-ranking Indian executive in PeopleSoft. His name was Aneel Bhusri. I contacted him via e-mail and received a response that PeopleSoft was doing very well in North America and Europe and had no immediate plans of setting up an establishment in India. I persisted in having a dialogue. They sent an Executive named Alex Doll to meet me. I contacted Alex recently via LinkedIn and he wrote back saying, “Good to hear from you – I remember meeting you in Calcutta in 1998, as part of helping PeopleSoft business/corporate development”.
When I met Alex I told him that PeopleSoft was missing out on a large opportunity. Besides, India was emerging as an offshore hub. It was unwise to miss out on India. He was very polite, heard me patiently and said he would report back to his boss Aneel Bhusri. I opened a second front. I contacted the Global Relationship Partner (GRP) of Price Waterhouse for PeopleSoft, Jeff Brugos. Jeff worked out of a home office and was constantly on the road.He had a brilliant secretary who managed his calendar and made him appear always accessible to his colleagues and clients. I suspect she answered his mails as well. Jeff lived in a large house very close to the San Francisco airport. He worked long hours from home to cover various time zones.
Jeff and I decided that the only way we could bring PeopleSoft to India was by talking to the founder Dave Duffield. Towards the second half of 1998, Jeff managed an appointment with Dave Duffield. He said Dave is a very busy person and the meeting will be short one. Jeff probably did not place much hope on the outcome of the meeting, he went off to China.
The meeting was at 11 AM. PeopleSoft was based in Pleasanton in the Alameda County of California. I was told that the PeopleSoft campus was built on what used to be a horse-ranch. I went the night-before and stayed in a low-rise hotel called Four Points by Sheraton. It was surrounded by greenery and waterbodies and had a beautiful swimming pool.
Refreshed, I donned a dark suit and went to the PeopleSoft campus. As soon as I entered, I found that the place looked strikingly different from other offices of corporate America. It was bustling with young people in colourful clothes, some wearing shorts and T-shirts and others walking in flip-flops. There were cafes and Pizza Hut restaurants inside the campus.
David Duffield’s assistant came and told me that he had a busy schedule and the meeting had to be brief. Dave came in. No suit, no tie, a checked blue shirt and jeans. I knew I had very little time, so I told him directly, “I have come with a proposal such that PeopleSoft can gain market share in India and make substantial sums of money without spending a red cent.” Dave rolled up his eyes and said, “How is that possible?” I said, PwC India will invest the money to make the India version of the software and engage a marketing team to sell the licences. Right now SAP is the only game in town and if PeopleSoft does not enter India it may be too late.”
Dave said, “But what is in it for you?”
I said, “We will take 50% of the license fees until we recoup 2X of our investments”.
He said, “Is 2X not too much?”
I said, “It is not because we are taking all the risk, investing the capital, creating a sales team and selling it to our clients. Right now you are receiving zero revenues from India. You will receive 50% of all sales without any effort or investments. And what’s more, we will help you hit the ground running in a critical market like India which is becoming the off-shore delivery hub of the world.”
He said, “I agree but on two conditions. Once you recoup 2X of your investments, you will align with the our global agreement with PwC and we will have the right to buy out your sales team.” I agreed. The second condition was a great relief. There was no way SAP would permit PwC to retain a PeopleSoft sales team for long.
The “short” meeting went on for almost an hour. He quizzed about PwC’s headcount, quality systems and PeopleSoft capabilities. We agreed that a small team will be trained in PeopleSoft. Dave would extend all support from the headquarters and do the quality assurance before releasing the Indian version in the market. As the meeting was ending, he said he had a musical band called Raving Dave and it was performing in the evening, could I come? I did and bonded with his colleagues over beer and music.
Jeff Brugos was pleasantly delighted by the outcome and he provided full support. I hand-picked a senior manager Shovon Mukherjee to spearhead the project. Later, he became a partner and led the PeopleSoft practice for PwC and thereafter, IBM in India.
A month or so later, Jeff drove Shovon and I to the Pleasanton campus. We signed the deal and started the Project Management Office (PMO) for the India version. Training was started simultaneously. We had now to do something we had never done before. We had to create sales team to sell licenses of PeopleSoft to large corporations.
Initially, we wanted to fly below the radar and not antagonize our ERP partners: SAP and Oracle with whom we were working closely. Therefore, initially we focused on the low-hanging fruits: those global corporations which were already customers of PeopleSoft in America. It also helped us that PwC, USA itself was a PeopleSoft HRMS client and we were able to train a number of consultants on the back of an internal project.
Then, a windfall gain came our way! Thiru Vengadam, a crack sales-person of SAP who had sold their largest licences, quit the company and was looking for an opportunity. We hired him as the Marketing head of our PeopleSoft practice. Our intention was to break away from our competitors and build an unmatched PeopleSoft business.
In 18 months, the initiative was a great success and it was beneficial to both PwC and PeopleSoft. We recouped 2X of our investments in the first full year of operations but in the second year SAP began making noises. We contacted PeopleSoft who then set up an India office and hired Thiru Vengadam as their first Country head. For a few years more we kept the India version maintenance and upgrade contract. Eventually, PeopleSoft took that over as well.
Dave Duffield had mortgaged his home to start PeopleSoft when he was 47 and made it a runaway success. To his shock, in early 2005, PeopleSoft was swallowed up in a hostile take-over by a much larger rival, Oracle, for $10.3 billion, leaving Duffield “rich, morose and out of work.”. Larry Elisson, the CEO of Oracle Corporation, eased out both Duffield and Bhusri.
Dave went into corporate hibernation for a while focusing on his foundation called Maddie’s Fund. At age 65, he came out of hibernation and co-founded a company called Workday with his old colleague from PeopleSoft. He was the same Indian executive Aneel Bhusri whom I had first contacted.
Forbes wrote in October 2013, “Larry Ellison booted Dave Duffield and Aneel Bhusri from their company. They returned the favour by creating the biggest threat to Oracle in years—and the fastest-growing company on the entire Forbes 400. Dave Duffield is the software industry’s eternal teenager.”
Aneel is the CEO of Workday and Dave its Chairman. Workday’s enterprise cloud applications for HR and Finance are disrupting the global software industry, including Oracle which owns PeopleSoft!