PeopleSoft-and 7,000 of its Closest Friends Months after a PeopleSoft annual user conference is over, the halls and offices at the Pleasanton, CA-based software company are still buzzing about it. And long before that din is quieted, product and timing decisions are already being made based on the next user conference.

"This is the most important event of the year-not just for customer service, but for the whole organization," says Sebastian Grady, PeopleSoft's vice president of customer services. During the three-day event, the company releases news, launches products, and gathers feedback. Developers teach customers, customers teach developers, executives are there with their ears open.

The company, which makes client-server software with finance and human resources applications for Fortune 1000 companies, has grown rapidly since it was founded in 1987.

With more than 2,300 employees now, PeopleSoft is hiring some 25 people a week, says Rebecca Moddelmog, the firm's conference director. But if the company has grown rapidly, the user conference has simply exploded.

"The first user conference was in October 1990. There were 100 people," says Moddelmog, who was employee number 36 at the startup company and who helped to plan that first meeting because she had a background in hotel sales and operations. "Since then, the conference has doubled in size every year."

That's right-doubled. The second meeting, in 1991, drew 257 attendees to New Orleans; in 1992, there were 500 (San Francisco); in 1993, 900 (Chicago); in 1994, 2,200 (Vancouver); in 1995, 4,200 (Orlando); and this December, Moddelmog expects more than 7,000 attendees at the San Diego Convention Center.

"This is not normal," she says. "And it can be a double-edged sword."

For one thing, maintaining intimacy among 7,000 people is a heck of a challenge. For another, it's tough to predict space needs. Because she's now sure attendance will top 10,000 in 1997, the conference has outgrown Boston, where it was originally booked, and will head back to Orlando instead.

Attendance numbers are so slippery, Moddelmog explains, because "the attendance doesn't jibe with the number of customers we have."

That is, if PeopleSoft knows it has around 800 customers, and in the software world customers generally send one to three people to a user conference, PeopleSoft should be able to assume its maximum attendance would be around 2,500 people. Instead, Moddelmog says, customers are sending five to 15 people each to the conference-unheard of numbers.

"We have the biggest user conference in the industry," Grady says. "We just blow the others away."

No Sales Pitches What is the company doing right at these meetings? Several things, many of which revolve around listening to the customer. Such as appointing nine of them to sit on a User Conference Advisory Board that meets twice a year and holds monthly conference calls.

Their first big recommendation came after that first meeting of only 100 attendees. PeopleSoft's "business partners"-hardware suppliers, consultants, and other vendors that complement PeopleSoft's products-outnumbered customers at that conference by more than two to one. The Advisory Board's advice? Ban the business partners.

Instead, Grady says, "we brought [business partners] back slowly. They add a lot of value. They're part of our team. But they're really kept in line. They're all told that this isn't a sales event and there are to be no sales pitches." They're not allowed to present at any of the educational sessions unless a customer has proposed the presentation and will be presenting alongside the business partner, and PeopleSoft has agreed to keep business partner attendance to ten percent of the total. While there is a trade show-the Partner Fair-Grady describes it as "low-key and genuinely informative."

For its part, PeopleSoft ensures a meeting free of sales pressure by making its own sales staff stay home. And only customers-not prospects-are invited to attend. "This meeting is where customer meets customer," Grady says. "It's an educational event, not a sales-and-marketing event."

Which is clearly one attraction for attendees. Another is the chance to network with other customers in the same industry using the same product. That's something PeopleSoft does a lot to encourage, and it's another thing that has become a logistical challenge with the ever-burgeoning bulk of this meeting.

"We used to have a bulletin board for messages, where customers would post little pink sheets [to find other customers]," Moddelmog explains. "For this year's conference, we've purchased a $60,000 messaging system accessible from 50 terminals around the convention center." The system includes a photo station, so attendees can take their own pictures with the click of a mouse and create brief profiles to be stored in the system for others to look up.

They also can use the system (which is basically Microsoft Mail with a specialized application built on top of it) to plan ad-hoc meetings, look up acquaintances from last year, search for attendees in their field, or access the Internet. PeopleSoft will use the system to broadcast messages.

Networking among themselves is where customers find real value in the conference, Moddelmog believes. "They get to extend their own project teams by talking to people who have the same issues they do based on their industry, geography, or customizing an application in a specific way," she says. "This helps them be successful in their implementation [of our products], and that's the primary reason we do it."

A more formalized kind of networking happens when customers are presenters at educational sessions. "We prefer customers to give their own tales from the field-their triumphs and pitfalls," she says. "Our goal is for the users to be the biggest participants." Moddelmog estimates that about half of the 248 sessions at the 1996 meeting will be conducted by users.

Of course, PeopleSoft does have its own messages to get across to this crowd of customers, and there is a slot on the schedule for what Moddelmog calls "the visionary stuff."

PeopleSoft founder and CEO Dave Duffield always addresses the general session as does the advisory board president. And the company tries to time a major product launch or other important announcement for the conference as well.

In the Line of Fire But the kicker has to be "PeopleSoft Speaks," a wrap-up session held on the final afternoon of the conference. "The entire management team pulls an all-nighter, discussing everything we've heard at the conference," Grady explains. "And the next day, we respond to everything we've heard, and we tell our customers how we're going to fix things." The response is tremendous. "I received five ovations just by talking about problems," Grady quips.

What this session gives the PeopleSoft conference is authenticity. "We're laying it on the line. Sometimes there's no answer [to a problem], and we'll say, 'Thanks for bringing this up. We'll address it in our response letter.'"

Response letter? That's right. After addressing concerns on the fly, the management team goes back to Pleasanton and drafts a 20-page letter to customers covering everything the company intends to do to respond to feedback from the conference.

But will PeopleSoft still be able to deliver that level of customer service if the user conference becomes hopelessly overgrown? Therein lies Moddelmog's challenge. "I have to try to retain the intimacy of this meeting, to make the conference feel it's one tenth the size it really is," she says. "Because I've been involved with this group for so long, it's sad to see it get so big that you have to add procedures, things that make it colder."

But she's taking steps to keep drawing participants together. "We're making the messaging the best it can be, we've got great signage so that people can mark out the groups they want to hang out with, and we put a lot of information on peoples' name tags. Why waste time talking with someone who's not going to move you forward? The better we do at narrowing your playing field, the better we're doing for you."

Grady imagines eventually breaking the group into tracks, but he wants to "keep it together as long as we can. I feel so strongly that [attendees] should be able come to the conference and say, 'Wow, there are 10,000 people here who bought the same product I bought.'"