Enterprise software vendor PeopleSoft (Nasdaq: PSFT) reported solid fourth-quarter results after the market's close today, citing the success of its e-business software suite. PeopleSoft shares have enjoyed an impressive run, but the world's largest database and software company Oracle Corporation (Nasdaq: ORCL) boasts its own end-to-end suite of applications. Application sales growth and new customer wins remain two ways to score this prizefight.

The company reported Q4 revenue of $498 million, increasing 34% from the year-over-year period and well above the Street consensus of $458 million. Net income from operations was $41 million, or $0.13 per share, compared to $11 million, or $0.04 per share, in the year-ago quarter. The Street consensus called for earnings of $0.09 per share.

PeopleSoft first encountered success with its human resources software, and later included finance, purchasing, and other applications. In September of last year, it began shipping PeopleSoft 8, which includes both front- (external) and back-office (internal) software. PeopleSoft 8 saves businesses the time and cost of buying specific applications from best of breeds, and then spending countless hours and dollars integrating the software.

According to its earnings press release, strong demand for PeopleSoft 8 drove Q4 license revenue to $165 million, which represented a 73% year-over-year increase. Software license revenue continues to become a bigger part of its top-line, increasing from 30% in Q3 to 33% this quarter. President and CEO Craig Conway also stated that the company had over 1000 orders for PeopleSoft 8 in the last four months.

In order to satisfy demands for applications that enhance relationships with customers, PeopleSoft bought customer relationship management (CRM) software vendor Vantive in late 1999. At the time of the purchase, according to the company, it had the next-best product line behind leader Siebel Systems (Nasdaq: SEBL).

Purchasing its CRM applications, however, leaves the company exposed to potential integration problems with the rest of its suite. And Oracle has gone to great lengths to remind investors that their applications are built together from the ground up. In today's release nevertheless, PeopleSoft hailed the announcement of PeopleSoft 8 CRM, (its CRM applications) scheduled for release in mid-2001. New CRM customer wins, particularly in the high-end, will be something to listen for in the conference call.

Few companies can now compare to PeopleSoft's product breadth, offering applications from human resources and finance to supply chain and CRM. While new customer additions will be important to watch for, the company's installed base has provided sufficient growth thus far, and should continue to do so into the next couple of quarters.

The uncertainty of adding new customers, and the fact that shares trade at more than 90 times next year's earnings, leave the company exposed to potential volatility. Oracle's sights are set on crushing PeopleSoft, but it's likely the market opportunity is large enough for both companies to succeed. Nevertheless, the company's premium valuation and high expectations for the coming year means further success will be harder to come by.