Infor Truly the Third Titan?

Business

There has been a so-called ‘duopoly’ in the world of enterprise software, held by Oracle and SAP. Microsoft has been a third contender, but was never truly a competitor. But now, there is Infor. What frightens the industry is that it is led by Charles Phillips Infor CEO, previously Oracle President. The world is now holding its breath for a true battle of the titans!

Oracle and SAP have a big problem, which is that companies who need a new ERP system on premise simply won’t turn to them anymore. They are too expensive, and setting the system up leads to significant downtime. That said, the money still seems to go to them, albeit from customers who are still stuck in lengthy contracts for maintenance and licenses. In 2011, Oracle earned some $28 billion, and SAP earned some $17 billion. Infor, at that time, ‘only’ took in $3 billion. Not much of a competitor, in other words.

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However, Charles Phillips, Infor’s relatively new CEO, is trying to break the duopoly to pieces. He has worked for about two and a half years to make sure that the company goes through, in his words, “a complete reboot”. He has completely changed the company’s management team and their strategy. No longer will Infor focus on building scale to products and innovation. Rather, they completely revamped their key assumptions and totally redesigned the architecture to achieve this. In so doing, the company now has 800 new developers on their books, and they have already developed 300 products.

While this is a good strategy to make Infor profitable, it doesn’t mean that SAP and Oracle are vulnerable. According to Phillips, however, the duopoly doesn’t have a strong integration strategy, because they don’t integrate cohesively. Instead, they have a bunch of ‘loosely coupled’ pieces, which can get confusing. Plus, Infor is focused on specific verticals, rather than entire industries. Their hottest area is health care, which is a huge one.

Another issue that Phillips says the other two have is poor usability. The minute you walk into the Infor headquarters, you will see their motto, which is ‘no fugly software’. They have approached their user interface with a focus on design, creating a thing of beauty that is also easy to use. As an added bonus, Infor offers everything as software as a service, which means people can try it and install it with ease, through the Amazon Web Services cloud.

So is Infor a true competitor for the big two out there? Two years ago, people would have laughed at that idea. Today, however, Infor takes up a shared second position in the enterprise software world, together with Oracle. And considering much of Infor’s management team was previously employed by Oracle, there seem to be some ripples in the industry. What the future holds is always anybody’s guess, but dismissing Infor in the way that Microsoft has been dismissed for years would certainly not be a good idea for the duopoly as a whole.

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The Infor On Premise v SaaS Revenue Tipping Point for 2016 Is Now Set

Business

According to Charles Phillips Infor CEO and wife Karen Phillips, who may not be an Infor employee but always pays attention to her husband, there is going to be a tipping point between SaaS and on premise revenue in 2016. After the release of very strong second quarter numbers, the revenue of the company stood at $708.4 million. This is the highest it has been since Phillips took over the company.

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There has been revenue growth across every element of the Infor company, including consultancy, maintenance, and software. They have also attracted 628 new clients. This includes a 10 year SaaS deal for the City of Gold Coast, a Queensland, Australia company. That contract alone is worth $30 million. Here, Infor will replace 42 systems, some of which more than 25 years old, while also providing revenue functions, property management, and customer service.

For Phillips, clients like this one demonstrate that Infor is doing something that Oracle and SAP, its only real remaining competitors, aren’t doing: pushing for SaaS. There has been double digit growth in SaaS for Oracle, and he believes that the split between SaaS and on premise software will be larger than 50% by 2017, much sooner than expected by both Infor and the competition.

Naturally, making these types of predictions is always a bit of a gamble. You simply don’t know what people will want or need. That said, Infor doesn’t want to sell infrastructure, which means their entire focus is on SaaS.

So what does this all mean? It means that Infor is doing things with a difference. And these differences are often very daring. For instance:

  • Instead of developing its own cloud, Infor uses Amazon Web Services. According to Phillips, there is no point reinventing something that is already out there and that works perfectly.
  • They offer almost all their services on the cloud, which means customers don’t have to pay expensive licenses, have lengthy downtime, and more.
  • They don’t focus on huge industries. Where companies like Oracle and SAP develop products for the automotive industry as a whole, Infor develops it specifically for Ferrari. And where the competition focuses on the hospitality and catering industry as a whole, Infor goes for Heineken and bakers. The list is endless and demonstrates that their goal is micro-verticals.
  • Where most tech companies move to Silicon Valley in California, Infor moved to Silicon Alley in New York. Why? Because that is where the customers are, where staff want to live, and where designers and other tech talents can be found. Designers including fashion designers, by the way (another Infor micro vertical).

Seeing all the things that the company does differently, and how well those strategies are working, it seems logical to assume that Phillips’ prediction of SaaS tipping over on premise customers will also be true. Infor is certainly pushing for it, wanting to offer their clients something convenient and affordable, yet of the highest possible quality.

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