Craig A. Conway
• Software license revenues are expected to grow about 30% in 2001, to more than $620 million
• Profits should jump more than 25% for the year, to about $180 million
PHOTO BY RICHARD MORGENSTEIN
When Craig A. Conway took over the corner office at software maker PeopleSoft Inc. (PSFT ) in September, 1999, he found a company headed for trouble. Revenues were flat. Profits barely existed. And employees were leaving in droves--the attrition rate hit 26% at one point--for the lure of dot-com riches. Conway couldn't even get executive headhunters to work with him. "The implication was," says Conway, "they didn't feel good about recruiting to losers."
They're happy to take his calls now. Thanks to Conway's risky bets, PeopleSoft, which specializes in software that runs big business systems, is a rarity in the industry--it did not disappoint Wall Street in 2001. Its third-quarter revenues were $509.4 million, up 15% from a year ago. Profits doubled to $50 million. And through early December, execs sent signals that the fourth quarter was on track.
Three moves are paying off. First, Conway, 47, doubled spending on research and development so PeopleSoft could get an all-Internet version of its software out by late 2000. In January, 2000, he paid $495 million for Vantive Corp., putting him smack in the middle of the hot market for customer-management software. And he brought much-needed discipline to an outfit that hadn't even bothered to press delinquent customers for payments.
Conway wants the Pleasanton, Calif., company to grow from its $2 billion annual revenues to $5 billion by 2005. That will take a lot more than a great turnaround strategy.