In 2002 when we started Infor we were ‘minding the gap’ in the software market. Customers had two choices and both required trade-off’s. There is an old saying about being caught between a rock and a hard place. In software you can chose a rock or a hard place. You could have a feature rich solution for your business from a provider that [offered] functionality and domain expertise but lacked global distribution and financial scale. You can still do that today. Or you can chose a provider that has stability and global distribution–and there only two of them–but [whose products] were complex and costly to implement.
We decided businesses wanted something different, he said. Something cost effective but not complex, with global scale and agility that could support business as they were forced to address changes in business and competitive pressure, something that could deliver the best of both. After 31 acquisitions and our own innovations, we have filled the gap. We have built a better software company. People said it couldn’t be done or shouldn’t be done. They said, in a market dominated by Oracle and SAP, why would you do that. They looked at us as if we were crazy. But we continued to drive forward.
The company has $2.3bn in annual revenue and has grown 100% on average per year for the past five years, said Schaper. It has 1100 channel partners and 90% of its employees interact on a regular basis with customers.
More significantly, it has 2,400 people dedicated to on going development, which is about 25% of its workforce. Its revenue breakdown is in line with other players, with license revenue contributing 24% to overall revenue, services 27% and maintenance 49%.
We have grown from a tiny upstart to one of the market leaders, from zero revenue to the tenth largest, and we still just getting started, said Shaper.
Customer retention is high at 93%, but Schaper would like it to be higher. The company is also attracting new customers, with 1,700 new customers which have never used products from Infor or its acquired companies within the last five years, signing up over the last 12 months. Investment in its product portfolio is ongoing with $400m spent annually on new products, support, enhancing existing technology and investing in long term technology.
Our competitors say we have no new customers, we acquire companies for their maintenance revenue and [we have] dead products, said Schaper. The facts just don’t support competitors claims.
The company said it had released 87 upgrades, over the last year, and integrated 20 acquisitions. It has also reversed product decisions made by some of its acquired companies such as Geac’s decision to reduce investment in System 21 and SSA’s decision to cease development on Baan 4 and 5.
It is starting to embrace new modes of customer interaction with the launch of Infor365 OnlineSupport, which is portal supporting a online community encouraging user-to-user communication and collaboration. Originally launched in the US last year, it is being rolled out worldwide. In the professional services area is has created the Fast Start methodology to help streamline and lower the cost of implementation. Currently available for the LN and LX lines from the SSA portfolio, it will be extended to other applications.
There is a difference between updating products in terms of functionality and driving development and innovation that requires heavy R&D and vision. Although Infor started talking about its SOA strategy around a year ago there was no detail behind it. That is starting to change.
Infor’s Open SOA is based on the use of business object documents, linking business process flows in a publish-and-subscribe, event driven, decentralized framework that provides support for the Open Applications Group Interoperability Standard (OAGiS) for document exchange.
Its approach is to service-enable its existing applications to enable standards-based integration and interoperability via an enterprise service bus. Rather than introduce a platform, as Oracle and SAP have done, it is service enabling each application through feature packs. The advantage of this approach, it says, is that customers can move to SOA without having to reimplement applications or adopt a new platform and risk getting locked into a technology and specific vendors’ architecture. In contrast with its competitors, it is also delivering its SOA capability free of charge as part of the annual maintenance fee.
The company also demonstrated the first of a new set of applications that will make use of its fledgling SOA model. These included role-based home pages, which will be available in mid 2008, although only for the ERP LN product initially. Eventually the approach will be used across the complete portfolio to provide a consistent user interface.
This is a new style of user interface built on Ajax-based web pages that is being designed to be able to present data from multiple, disparate systems in a more intuitive way for individual users. They will support personalization and mash-ups for improved data visualization. Infor has identified over 130 roles and plans to ship around 40 in the first instance. They represent the first demonstrable applications to use Open SOA.
Infor also showed off multi-books accounting facility, a new general ledger facility that also helps bring SOA to life and demonstrates the type of value that organizations should be able to gain from SOA.
Open SOA is concerned with creating self contained components based on specific business requirements that can interoperate with other components. One of Infor’s objectives is to be able to create components that can be used across it s portfolio and multi-books is an early example.
It tackles the problem of global companies that need to conform to multiple accounting standards and regulations. It can be run concurrently with existing general ledger systems, both Infor and third parties, or as the sole system, and provides the facility to support multiple books without having to swap out applications or upgrade. It will be deployed as a SOA component and is scheduled for delivery in December 2008. It is an example of how Infor plans to develop SOA components that can plug into existing systems, add value, and provide an evolutionary path to SOA.
Our View
Infor has evolved as a company and is starting to demonstrate that is can do more than acquire companies. It has a strategy that is different technologically, but plays well against the like of SAP and Oracle. It is also built around its customers maturity levels and preferences, providing SOA almost by stealth and for free, and with the aim of reducing complexity to make it simple and evolutionary enough for its mid market customer base.
It is a couple of years behind the other players and even other mid market players like Lawson. Infor CTO Bruce Gordon said the company started on its SOA journey 2 years ago and estimates that it is a six year journey but that it has already put a lot of the plumbing in place. However, that time scale is not out of kilter with its customer base, nor is the approach, which does not require applications to be swapped out nor new platforms put in place.
The Open SOA approach has been dictated in part by Infor’s acquisition-based business strategy. As its own needs have driven its direction it needs the approach to work, which could bode well for the customer base. It has taken a practical approach based on its needs, which align with the needs of many of its mid market customers.
