I've said it before and I'll say it again, Infor is the dark horse amongst the traditional ERP players when it comes to dealing with the difficult transition to cloud. Admittedly, Infor was fairly stagnant for a few years whilst it got its strategy together, with CEO Charles Phillips reorganising the company and refactoring the applications to be cloud-ready.
However, Infor now very much markets itself as a software-as-a-service vendor (despite its legacy customer base still very much operating on-premise) and it is pushing aggressively to win those cloud deals.
It's latest results (which lack some detail, given Infor is a private company), highlight that software license fees and subscription revenue increased 12 percent and that software-as-a-service revenue is up more than 60 percent in fiscal 2015.
SaaS bookings also increased more than 300 percent and Infor said that more than 45 million users now access its applications in the cloud, across 96 different countries.
CEO Charles Phillips said in some canned comment:
The growth Infor is experiencing marks an inflection point for the company, where the heavy investments we’ve made in cloud software that meets unique industry needs with an elegant user experience are paying dividends.
Infor is well-positioned to accelerate growth as more companies eschew the monolithic era of legacy software vendors in favor of flexible, secure cloud applications with the last-mile functionality they need without the costly customization they don’t.
And this is why I think Infor is fairly well positioned going forward. When I've spoken to Phillips over the past few years he's always made it clear that Infor is in a good position as a private company to make the investments in refactoring its applications for the cloud, as this means it can weather the pain without too much scrutiny from markets and investors.
As we have seen with Oracle and SAP, the transition to the cloud isn't making for the easiest earnings discussions.
However, Infor was able to take its time developing its ION middleware, rebuilding its apps to a certain set of standards (now dubbed the Xi suite) that integrate social and analytics functionality, are mobile first and which take advantage of Infor's design agency Hook & Loop's beautiful UI.
The suite of applications are also mostly built around industry verticals, which is something of an advantage for Infor, given that where the other cloud vendors are now making investments.
Not only this, but Infor's cloud operates completely within Amazon Web Service's data centres. Whilst this sparked some negative comments from other SaaS vendors, I've always argued that it was a smart strategy from Phillips.
To me it meant Infor could go for cloud at scale, quickly, where it didn't have to wait years to build in-region data centres and it could take advantage of Amazon's ever increasing functionality and investments. Customers I've spoken to seem to see the benefit of this, whilst other SaaS vendors continue to argue it's a problem. Take a look at my piece on the debate here.
Infor also said that added 2,900 new customers to its books, which includes approximately 500 “competitive wins against legacy vendors SAP and Oracle”. New customers and go-lives in the year include:
- Wyndham Hotels
- San Francisco Municipal Transport Agency
- Hershey Entertainment and Resorts
- Best Western International
- Wagner Equipment
A good set of names to reference and the number of new customers added is impressive. Infor has been
investing heavily in its sales and marketing functions, which these numbers reflect, but I also think it speaks to how Infor's strategy is now coming together and it being able to go to market with a clear sell.
Alongside the results, Infor also announced the hire of “Wall Street Veteran” Jeff Laborde as the company's new CFO. Infor says that Laborde has been brought on-board to help manage this period of high growth, particularly in terms of the transition to cloud.
Laborde most recently served as CFO of SumTotal Systems, a supplier of HCM software, but has also worked extensively at Goldman Sachs in its Technology, Media and Telecoms group.
Commenting on the hire, CEO Phillips said:
After investing heavily in R&D to deliver the first set of industry suites delivered in the cloud, Infor is heading into a period of high growth. Jeff Laborde, with his extensive background in technology finance, is a perfect fit to help guide Infor through this next phase in the evolution of the company.
As a side note, I've asked Infor for greater detail on its revenue numbers and for some information on what the company's hire of Laborde means for previous CFO Nicole Anasenes. I'll update this story as and when I hear back.
Infor gets a bad rep because historically its applications were tired and its technology wasn't keeping pace with the market. But from everything I've seen over the past three years, Infor's investments are genuinely paying off. It also has a close-knit executive team that is extremely passionate about the future direction of the company.
That's not to say that Infor doesn't have its problems. For one, it has to convince its current customer base, which is largely on-premise, that moving to the cloud with Amazon is right for them. It's not impossible, but I think we are talking about a multi-year strategy to make any significant progress.
Secondly, Infor has a brand problem. Despite being the third biggest player in the market, it isn't seen as 'flashy' or as desirable as SAP or Oracle (which may well be a good thing, depending on who you speak to). It's made investments in branding and marketing over the past year, but it needs to keep these up in order to compete with the young and trendy cloud vendors out there.
Thirdly, it's beginning to push further into the mid-market and take on the likes of NetSuite with its CloudSuite Business ERP platform, which is a sell to companies that don't need the vertical functionality of its Xi apps. We haven't heard much progress on this front and it would do Infor well to make further gains in this area of the market.
It has made good progress thus far, now it needs to execute.
Disclosure: At time of writing, Infor, SAP and Oracle are all diginomica premier partners.