Infor has today announced that it will be acquiring Saleslogix for an undisclosed sum, in what is a clear attempt to go head-to-head with the leaders in the
cloud CRM market – including Salesforce.com and Microsoft.
For those of you unaware, Saleslogix was once owned by Sage, but was last year sold off to Swiftpage as part of Sage's ongoing software portfolio rationalisation plans. Operating out of Scottsdale, Arizona, Saleslogix employs just over 100 people and currently offers CRM for sales management, marketing, customer service and support to over 1,700 organisations worldwide.
The move is a bold one for Infor, which has traditionally focused on offering robust and industry specific ERP applications, whilst relying on integrations and partnerships with the likes of Salesforce and Microsoft Dynamics for CRM capabilities for its customer base.
That's no longer the case. Infor is going to make an aggressive attempt to not only sell deeply integrated cloud CRM to its existing ERP clients, but is also going after new deals from customers that are looking for a best of breed cloud CRM – across all industries.
Although Saleslogix has traditionally been offered as an on-premise and cloud application, Infor will be rebranding it Infor CRM and pushing it to market solely as part of its Infor CloudSuite, which runs on Amazon Web Services. Read our interview with CEO Charles Phillips here for the details surrounding Infor's cloud strategy.
Infor expects to extend its new CRM product, with industry-specific attributes and processes integrated, first to ERP applications for automotive, healthcare, public sector and manufacturing verticals. However, I have been told that the product will be fully integrated across the entire portfolio within 90 days of the deal closing.
CEO Charles Phillips played on the industry specific CRM capabilities that Infor will now be able to deliver. He said:
CRM systems have typically tracked a small subset of customer, marketing, and sales data. Infor’s industry applications have a vast repository of information on a customer’s overall interactions derived from deep industry processes we automate and we’ll build in context analytics that deliver unique customer insight.
Infor can now deliver the first truly end to end demand-to-supply chain, from lead to ship, by integrating marketing and sales processes with supply chain planning, sales and operations planning, and production scheduling in real time.
Diving in with Duncan Angove
I got the chance to speak to Infor's President Duncan Angove today ahead of the announcement to get a bit more detail about the company's plans for Saleslogix – or Infor CRM, as it will be known in the future. He said that the deal will allow Infor to stop reselling other companies' CRM products on to its client base and to start taking a slice of the multi-billion dollar cloud CRM market. He said:
Every industry that we serve at Infor is shifting from being product centric, to being more customer and service centric. So obviously owning the CRM functionality and the processes that actually engage with customers across the lifecycle from sales, marketing and services became more important to us. While we have a partnership with Salesforce and we built integration to Microsoft Dynamics CRM, we weren't able to deliver the level of depth and richness in the process flows that span the product that we wanted. It's very hard to put the customer at the centre of the flow and analytics if you don't actually own it.
Given that we are an industry specific applications company, we build very deep specific flows for the micro-verticals we are in, and we felt like owning the CRM component to that allowed us to deliver more valuable flows for our customers.
From a business perspective, selfishly, almost every deal we go into customers are in the market for a CRM as well as ERP, and to date we have just been reselling. So this is a big business opportunity for us as well.
Angove said that the biggest problem that Saleslogix has had in the CRM market is that it doesn't have the same brand recognition as the Microsoft's and Salesforce's of the world, despite having a product that he said is extremely “functionally rich”. He believes Infor can solve this problem. Angove added that Infor has found Saleslogix to be highly configurable, which is useful for Infor's verticals, and that the recently revamped HTML5 user interface puts it in a good position for further tweaking by Infor's well-respected Hook & Loop design team.
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In addition, Angove said that Saleslogix/Infor CRM will be offered solely as a cloud solution out of Amazon Web Services. He also believes that the integration will be easy, thanks to Infor's ION middleware, which integrates applications using a XML business document construct – something that Saleslogix is also based on. He said:
The integration that we built with Salesforce and with Microsoft uses this XML construct. We integrated with Microsoft first and we found that when we entered the relationship with Salesforce it was 95% exactly the same integration model.
It's orders, customers, accounts – so turning that around and pointing that to Saleslogix will be very easy. We expect to be able to integrate the two solutions pretty quickly. Within 90 days I expect all of our ERPs to be integrated to Saleslogix.
And if we had any doubt about Infor's intent to compete with the likes of Salesforce and Microsoft in the pure-play cloud CRM market, Angove said:
There's an enormous opportunity. The intent is to not just sell this into our industry suites, but to compete in the best of breed CRM cloud market. We think with our brand and distribution we can do that.
We've been very successful with all of our acquisitions over the past two years, they've all grown double digits, so we think we can make a real go of this.
Initial reaction from the industry
Having spoken to a couple of analysts about the announcement, it's fair to say that there is a certain level of surprise regarding the news. For example, the research director of IDC's European software group, Philip Carnelley, said that hearing the name Saleslogix was a “blast from the past” and one that he didn't think he would see much of again. However, he added that Infor has a strong reputation for making the most of its acquisitions. He said:
Infor has a good track record of taking on these companies and doing quite a good job of keeping them going. Their users are happy with what they've done with what they've bought and they've done the work to make them modern.
They've got this huge install base of loyal ERP clients and I'd imagine those clients will certainly be interested in what Infor has to offer if they say this is going to integrate better with what they've got already. Existing Saleslogix users will also be pleased because it gives them more of a forward path, they have probably been a bit doubtful since the sale from Sage.
Jeremy Cox, Ovum's principal analyst of customer engagement, had some questions about whether or not Saleslogix was suited to the very large enterprises, having been built for the SME market. He said:
Saleslogix is designed for the small and medium enterprise, so if they have an interest in that market that makes sense. When we did our Ovum decision matrix last year, it came out as a worthy player in the SME marketplace, but certainly not at the large enterprise marketplace. To me it would make sense if they're looking to go to smaller organisations and leverage their cloud capabilities around that, there's a lot of growth opportunities in that area and that would make sense.
But there's a credibility gap to get that into the large enterprise. I doubt very much it would send tremors through Microsoft, SAP, Salesforce
However, Ray Wang from Constellation Research sees a strong alignment between the two companies and believes it will be a good match. He said:
Infor’s Saleslogix acquisition breathes new life to the Saleslogix customer and partner base. Constellation sees this as a good move for Saleslogix and Infor customers in general. While Swiftpage did a decent job managing the acquisition and improving the product, Infor’s deeper R&D budget, well paired vertical customer base, and mid market to enterprise focus provides a better fit for long term growth.
Existing Infor customers should gain a cloud based CRM that will be enhanced and developed with vertical focus and strong integration frameworks through Infor ION.
This a very interesting move from Infor. Since Charles Phillips came on board a few years ago, I've thought Infor's strategy has been clear and concise and that the company has done some solid work in restructuring its applications around ION, whilst creating some beautifully designed user interfaces with Hook & Loop.
However, Infor has mostly been considered a pure-ERP company and one that is focused on creating industry specific applications. So today to come out and announce that it is going to go and sell in the broad cloud CRM market alongside Salesforce, Microsoft and the rest will no doubt cause a bit of a stir.
I think this is an excellent opportunity to sell CRM into its existing client base – why resell other people's products when you can take a slice of the pie and potentially offer a richer product with deeper functionality? As long as Infor fulfils its promise on the integration, this will be a realistic option for its customers.
Whether or not Infor can go and compete head to head with Marc Benioff selling into a large enterprise, that remains to be seen...