Infor parades its digital revival plan

SUMMARY:

Infor is an unexpected rider hitching a lift on the bandwagon of next-generation enterprise software. It aims to outsmart larger rivals Oracle and SAP in enabling its customers to take advantage of all today’s buzzwords – mobile, social, big data analytics and cloud connectivity. But is its customer base ready to take advantage of all the goodies unveiled at its annual conference this week?

Charles Phillips Inforum 2013All the established enterprise software vendors — along with their customers — face a technology refresh challenge. During the past decade, the pace of business has accelerated in step with a huge leap in ease of connection and the power of digital devices. To keep pace, forward-thinking business leaders are looking for capabilities such as mobile, social, big data analytics and cloud connectivity. But the installed systems at the vast majority of organizations were designed and implemented long before any of these capabilities became commonplace.

The problem for vendors is one of implementing a more flexible application architecture that not only supports these new capabilities but will also keep pace with rapid change as they continue to evolve. Vendors must do this in a way that allows customers to upgrade their existing systems in an orderly way. It’s not an easy balancing act to perform, and each vendor has chosen a different path.

Infor launched the fruits of its strategy at its annual Inforum conference this week. The new 10x release of its disparate portfolio of products ticks all the checkboxes of the digital age:

  • a tablet-friendly, HTML5 based mobile UI;
  • a social enterprise collaboration portal called Ming.le;
  • multi-tenant cloud across the entire product range (though as an option rather than a default in most cases, and in many cases based on a single-tenant data model);
  • a brand new big data play that leverages Amazon’s Redshift data warehouse service;
  • a smart new look and feel to the user interface across the entire product range, created by the team acquired to form the company’s own in-house design agency, based in New York;
  • a loosely coupled, XML-based integration bus called ION that provides the connection layer to join new applications to older installed systems and to third-party resources.

It’s a remarkably comprehensive overhaul for a vendor that just a few years ago was a rebranded roll-up of several half-forgotten second-tier enterprise vendors.

“We feel that we’re right on the precipice of an inflection point,” Infor’s CEO Charles Phillips told a gathering of media and analysts at the event. It’s certainly a precipice: a make-or-break moment for Infor and for his leadership. If the product engineering investment of the past two years fulfils its intended purpose, Infor will have achieved an unprecedented transformation. But if in doing so it has reached further than its customers are either willing or able to follow, the inflection will prove to be a breaking point.

The potential upside makes a good story — one that USA Today’s Jon Swartz lapped up for an article published on the eve of this week’s conference. Swartz savored a “delicious irony” as he depicted the resurgence of Infor as a personal battle between Phillips and his erstwhile boss Larry Ellison, CEO of enterprise software giant Oracle.

Infor is happy to go along with this ‘young pretender’/’David and Goliath’ storyline as it plays well with a number of audiences. It helps enthuse and rally employees, many of whom are veterans of previously independent brands that have been subsumed within Infor. It intrigues influencers in the media and analyst community, where Infor is investing in increasing its profile. Most important of all, it strikes a bullish note for investors — Infor’s private-equity owners will come back to the market in an IPO sooner or later, and they will want to turn a substantial profit.

The potential downside comes if all of this turns out to be no more than savvy window-dressing. Infor lieutenants were not afraid to use the phrase ‘lipstick on a pig’ during this week’s conference, but it’s a phrase that Infor must work hard to prove doesn’t apply to its own products, whose legacy often extends back two or more decades. The inflection point of technology disruption that is creating opportunities today for a new generation of enterprise software providers is not one that naturally belongs to Infor; it’s more the case that Infor is an unexpected rider hitching a lift on the bandwagon — reinvented as “the world’s largest startup,” which Phillips described as “kind of our unofficial tagline.”

Can Infor succeed at reinventing itself more successfully than rivals facing the same legacy challenges? Phillips says that one of the factors propelling Infor is that, thanks to its strategy of pursuing micro-vertical sales opportunities, its buyers tend to be business managers who are forcing the pace for more effective business tools, rather than IT managers with a more conservative outlook. “We’ve always had to get around IT,” said Phillips. “The difference is, now we have a good story for IT. I think we have good story for both sides of the house but to get the conversation started, it’s got to be the business driver.”

The unanswered question surrounding Infor’s latest release is whether customers, no matter what they say they want, are actually ready to take on this much disruption in their enterprise applications. It’s one thing to sit in an auditorium and agree with the sentiment projected before you in 10-foot-high lettering that ‘Using enterprise software sucks’. It’s quite another to actually do something to change that experience in your own organization.

While Infor promises all the benefits of a new generation of enterprise software, it fails to mention the gotchas: that implementing and maintaining these capabilities requires investments in infrastructure and change management that few of its customers are ready for. Just like Oracle and SAP, it wants to convey the message that you can have all of this modern digital capability — the sexy UIs, the social and mobile add–ons, the SOA integration and all the rest — at the same time as retaining your core systems on-premise: because that’s what its customers want to hear. But the reality is more nuanced. Doing it on-premise is hard work. Doing it in the cloud entails compromises. Doing it as a hybrid implementation that straddles both cloud and ground is challenging, ION notwithstanding.

To show success, Infor only needs a certain percentage of its customer base to upgrade — for example, if just five percent of its HCM customers upgrade, that would already equal Workday’s entire customer base. But organizations are loath to upgrade core systems like HCM, manufacturing and financials. Getting as many as one in 20 to upgrade in a single year could prove to be an ambitious target. The story told at Inforum 2013 this week was designed to inveigle as many as possible into making the move, and if Infor succeeds better than its rivals it will stay in the game. But it is a gamble for sure: a precipice, on which Infor as much as any of its competitors, is teetering.

Disclosure: Infor funded travel and expenses for Diginomica writers to attend its event this week.

Image by Phil Wainewright.