The COVID-19 pandemic is a public health crisis first and foremost, with people continuing to struggle with unprecedented challenges. However, it's also true that questions are being raised about the impact it may have on the wider economy and the future of work. We at diginomica have been attempting to tackle these issues by speaking to a range of businesses - both buyers and vendors - about how they're handling the persistent prevalence of Coronavirus and what the long-term impact may be on their business.
With this in mind, we got the chance to sit down with Infor CEO Kevin Samuelson to better understand how Infor has handled its response to COVID-19 internally, but also to get a sense of the impact on buyer behaviour. His top level take is that companies will double down on investments that boost agility and resiliency, meaning an acceleration to the cloud.
Infor has also learnt lessons from its Asia business on remote go-lives, which is benefiting the company's books, as the virus continues to take hold.
By way of background, Samuelson was announced as the company's new CEO last year, replacing Charles Phillips. Infor has undergone a decade-long transformation, rewriting its industry-focused apps for the cloud and pursuing a strategy that focuses on beautifully designed, multi-tenant vertical applications, hosted on AWS.
In addition to this, earlier this year Infor was fully acquired by Koch Industries, bringing the company a valuation of nearly $13 billion. Koch had been a customer of Infor's for a number of years and made a series of investments in it, before acquiring the remaining stake in the company. Infor will continue to be operated by the current management team from its HQ in NY.
For a full analysis of Infor's strategy to date, it's worth reading a previous piece of mine here.
In terms of Infor's response internally to COVID-19, Samuelson said that the company has primarily been focused on the health and safety of its employees. He explained:
We were among the first companies to tell employees to work from home. Even in countries where they have opened up offices again we have been very reticent to send folks back. Fortunately, as a result, we've had incredibly low case counts and are in very good shape as it relates to health and safety.
In addition to this, Samuelson said that Infor has been laser focused on ensuring stability for customers and providing ongoing support. Given that the spread of Coronavirus began in China and the South-East, Infor was able to use learnings from that region to implement changes in Europe and the Americas by the time it began to spread further. He aid:
The fact that it hit Asia three or four months before it hit Europe and America was helpful as it relates to execution, as they were able to do a lot of work to figure out how to implement remotely. Where we stubbed our toes in those early days was on smaller projects and the impact was much smaller. They were able to put in place a set of methodologies and technologies that we could bring into Europe and then the Americas.
This is where I've been shocked with the resiliency of our teams, because we really didn't miss a beat. I've not heard of a single example of something going off the rails as a result of being remote. That ability to test and learn in Asia has served us very well.
Impact on business
We've heard from a number of companies across a variety of sectors about how they think COVID-19 is going to impact their bottom line. The initial assessments are varied, but it appears that the cloud-focused enterprise vendors are fairly confident that they will do well off the back of the crisis. This makes sense in many respects, given that once this is over companies will likely be taking stock of the lessons learned, particularly in terms of how to improve resiliency on a number of fronts.
Infor is no different and Samuelson said:
Like most folks, when this all started I didn't know if or how we would be able to implement software remotely - that hadn't been done at this type of scale. I wasn't sure how much software we'd be able to sell in this type of environment. Who would be taking on large ERP implementations?
We finished our quarter at the end of April and like most companies we are very back-end loaded with respect to sales, so in the heart of the crisis. It went so much better than any of us anticipated. It was our second best bookings quarter in history. We sold a massive amount of cloud software.
Implementations have gone extremely smoothly. We've had literally dozens and dozens of go-lives over the past six weeks. Projects are continuing and customers are happy. I would never have guessed that this would occur. Companies feel like even though these are very distressing times and there's not a lot of visibility, investing in operations and improving them is something that's so critical that it has to continue.
Infor has a big stake in the supply chain market, given its ownership of GT Nexus. Samuelson notes that customers will likely want to have increased visibility and flexibility into their supply chains going forward, and so Infor is seeing a lot of demand in that area. But more broadly, Samuelson believes COVID-19 will seal the deal for buyers that were perhaps wavering on the importance of migrating to cloud. He said:
In terms of long-standing changes, the obvious ones are, without question, that the shift to cloud will accelerate. With everyone all of a sudden having to work remotely, managing on-premise systems becomes even more challenging. And the criticality of these systems becomes more important. A lot of customers are looking at options to get to the cloud more quickly. So I do think this will be an accelerator to cloud migration.
Infor's strategy evolves
From an outside perspective, Infor's success in recent years has been its clear and cogent product strategy and its path to cloud. This remains unchanged, but under Samuelson's leadership it appears that the strategy has evolved into one that now incorporates implementation execution and customer success.
We've written previously on how Infor has adopted a 60/30/10 approach, where it claims that given its industry specificity, 60% of what a customer needs should come out of the box, 30% should involve minor configurations, and the remain 10% should be what customers need to be different and give them a competitive advantage.
Samuelson said that his primary focus is now on getting quicker results for customers. He said:
A lot of our focus has been how do we continue to accelerate our investments in technology, whilst bringing better customer experience to bear. And for that we mean implementations that are much quicker. Training our teams and putting in place the 60/30/10 framework has been a huge focus for us.
Our cloud growth has accelerated over the last 8 months. Probably more importantly though, I'm very focused on how many are going live and how many are referenceable and happy. And that's really gone through the roof.
Part of Infor's plan to get customers to the cloud includes its UpgradeX programme, an initiative that provides customers with a cloud-based data warehouse, Ming.le and other capabilities, with the aim of moving customer solutions to Infor's cloud-based product line. Samuelson said that UpgradeX has seen "pockets of success" in the past, but that the programme is now "exploding". He said that UpgradeX has seen growth of nearly 200% this year.
Whilst it's clear the cloud is the focus for Infor, and has been for a while, Samuelson is also clear that the company is not going to take the aggressive approach adopted by other vendors, trying to force its on-premise customer base to cloud adoption. Infor is instead adopting a more carrot versus stick approach. Samuelson said:
For customers that want to stay on premise, we are not going to push or force them to the cloud. I know a lot of our competitors have had a lot more aggressive strategies and end of life products. Our view is that we want customers for decades. So if they want to stay on our products we will continue to support them. Obviously we are not going to invest heavily in our on-premise products, our investments are going to our cloud products, but we will continue to support those for the foreseeable future.
But we are finding that customers are more eager to move to the cloud given the flexibility and the cost savings. At this point we have upgraded thousands of customers to the cloud and have a good methodology. So when customers are ready, we are pretty advantaged in moving them to the cloud. Our cloud products, we built them with a view towards upgrading our customers. So the vast majority of functionality that's critical to these customers, it's been put into the cloud products.
Infor has a lot going for it. As I have noted previously, the company has benefited from being privately held for some time, enabling it to take tough decisions early on around refactoring its product line for the cloud. This long term strategy approach, according to Samuelson, will be bolstered by the Koch acquisition - given that Koch too is a private company and has historically taken the view that long-term investments should take priority over short-term growth.
Samuelson said to me that Infor's biggest risk is missing out on the opportunity in front of it, with it having a window of opportunity to gain significant market share. Samuelson believes that the key to that is making its customers as happy as possible as quickly as possible, with its cloud products.
It's too soon to know what impact COVID-19 will have on businesses over the long term. But what is becoming increasingly clear is that vendors that have a stake in digital products that improve operational resiliency, whilst doubling down on customer support and success, will likely have new opportunities to gain further ground.