chaotic bluster flurry of virtual events this fall, it's on vendors to make the case: why should we attend? During my pre-Inforum video chat with Infor CTO Soma Somasundaram, that's where I started: why should we pay attention to Inforum 2020?
Short answer: cloud urgency (for more on that, see my colleague Derek du Preez's Inforum 2020 - Infor doubles down on cloud acquisition, bucks trend on rushing out COVID-19 apps).
Obviously Infor would prefer to be holding its annual user conference on the ground, preferably somewhere festive and warm - but that's not 2020. On the upside, Somasundaram told me this year's event registration is bigger - and geographically diverse:
I would say that we have twice the registration than the in-person event. We probably will get to 15,000 registered registrants this year, which is great, and we also have a lot more international - .international registration is multiplied five-fold. (Editor's note: Inforum spans September 15 and 16th).
So what accounts for the interest this year? Somasundaram says cloud urgency carries the day.
We've been on this cloud journey for seven years, give or take. We launched our first CloudSuite in 2017. Three years and change later, we have over 2000 customers who are deploying the solutions in multi-tenant, or already gone live.
CloudSuite adoption a welcome surprise - "we expected a material fall off in demand"
That gels with Infor CEO Kevin Samuelson's sales updates, which he relayed during the pre-Inforum media session. It's a mostly-good-news update, with the only downside being the sales slowdown for on-premise, "perpetual" sales. Samuelson didn't mince words on that:
One thing that's not going particularly well - which isn't a surprise - are perpetual sales. So we are a company that's going through that transition from perpetual into the cloud. And it's been interesting to see the huge uptick in cloud sales, with a much steeper decline in perpetual sales. Now fortunately for us, that represents just a handful of percent of revenue for us, so it's not that impactful in the aggregate. But I think it does speak to what's happening in the industry.
Cloud adoption is the good news here. For Samuelson, who has weathered past recessions on finance teams, this is a most welcome trend:
Having lived and executed through a lot of recessions in my career, our expectation going into this was that we'd see a material fall off in demand. We haven't. In fact, the opposite has been true. We've seen a huge, huge uptick in demand for our SaaS products... I think that speaks to the power of our products, and the market as a whole really understanding how critical it is to shift these core operational systems to the cloud - [a realization] that has taken a very, very long time.
Even in customer segments slow to adopt cloud, e.g. distribution, there has been a major uptick. Samuelson:
It took a long time for companies to get comfortable moving these core operational applications to the cloud. But it really feels like we've hit a significant tipping point. So we're quite eager to see how this plays out.
Building CloudSuite verticals - "not for the faint of heart"
I asked Somasundaram: if he does a good job for Infor this year as CTO, what does that mean? It comes down to differentiating Infor's platform from the competition. Somasundaram made the case as follows. Start with industries:
Getting the CloudSuites launched was not something that others have done, including our bigger competition. Either they have delivered a horizontal platform in a multi-tenant environment, or they are doing single-tenant hosted solutions. We went after this idea of industry-specificity.
Building separate vertical cloud ERPs keeps a CTO on his toes:
That's not for the faint of heart. Getting those products to multi-tenant tenancy with the ability to have last-mile features... I think we've done a good job there.
Somasundaram says his team must also ensure "out of the box integration" across industries. Provisioning automation is another benchmark: "How quickly can we provision once the customer signs with us? How much automation is there in the infrastructure model?"
My take - questions to ask at Inforum 2020
It's not always easy to get your questions answered at a virtual event. That said, here are some of the questions I think customers, partners, and others with a stake in Infor should be asking.
Migration of customers from older releases? Though he didn't offer an exact number, Samuelson said there's been a surge of customers moving from older Infor products to CloudSuite (in the 200 percent increase range). Two things are interesting here: quantifying the amount of customers, and learning from their migrations. Infor has been very good getting customer stories in front of us the last couple years, but we haven't had as many CloudSuite use cases to dig into. Let's see if that changes at this year's Inforum. Take my pre-Inforum use case with Midwest Wheel - that's the type of exceptional story that builds community confidence in the CloudSuite platform (Not your typical ERP upgrade story - how Midwest Wheel uses Infor CloudSuite to build workflows on the fly).
How different is the industry play? Infor talks up its CloudSuite verticals, and it's the right talking point. I believe the future of cloud ERP is vertical; customers won't tolerate the data silos and legacy aspects of their proprietary industry software. But let's face it: every cloud ERP company claims they are strong on industries. For Infor to differentiate here, they need to go deeper into explaining why their approach to industries is different, including their multi-tenant platform (and they need to be clear on which industries are pure multi-tenant and which, if any, tie back into hosted solutions). Let's see how they do at Inforum.
Will Infor partners pick up micro-verticals? Building on that last question, Infor can't build out those verticals alone. Each so-called vertical is really a ton of micro-verticals that a savvy partner can help to configure, package, and build-out. Somasundaram talked about their micro-vertical partner program, and their acquisition of Dutch System Integrator Alfa-Beta, which built out a dairy-specific enhancement to CloudSuite Food and Beverage. Will there be more Alfa-Beta type partners showing their expertise?
Process automation report card? Infor announced an intrguing partnership with Signavio at last year's Inforum. This partnership has implications for automating Infor's industry configurations (or Accelerators as Infor calls them), as well as easing implementations.
Ease of implementation progress? One highlight of last year's Inforum was Infor's transparency on making the implementation experience easier. Derek got into this topic in his piece also. This push, including the Signavio partnership, is part of Infor's Agility initiative, announced at last year's Inforum. Will we hear more on this at Inforum 2020, given that customers need more project automation than ever in this remote workplace?
Coleman AI updates? - Somasundaram talked to me about Infor's multi-tenant data lake, running on top of CloudSuite. That data lake is one key source of data for Coleman AI. We're due for a Coleman AI progress report - keeping in mind that Infor's goal here is practical AI, embedded across products and workflows (e,g, pricing recommendations or inventory optimizations built into the user interface).
Infor by the numbers - Infor maintains that being privately held (by Koch Industries) gives them a freedom from the quarterly obsessions of their publicly-held competitors. I tend to agree: if indeed Koch is aggressively investing in Infor and patient for a long haul return, that's an advantage. Why? Because transformations are expensive; now is not the time to give in to margin pressure, and nickel-and-dime customers.
During the media session, Samuelson explained Infor is currently looking at metrics the company will potentially share publicly in the future. Let's face it - even vendors that are required to file publicly don't always make it easy to figure out how much of their revenue is cloud revenue, etc. But getting numbers out of privately-held companies is always harder. I expect Infor to share more numbers during the Inforum sessions. Derek cited a couple interesting ones, including:
CloudSuite applications saw a 112% growth in annual contract value (ACV) bookings between May and June this year - with an increase of more than 200 percent in on-premise customers upgrading to the cloud.
Finally, Derek also detailed Infor's new customer bill of rights. Infor is not the first ERP company to issue a bill of rights - Acumatica did it first. But given the flawed history of ERP implementations, I believe each vendor should follow suit. A bill of rights pledge is hardly a binding document, but it does raise the bar, and Infor now gets the double-edged sword. Kudos on the one hand - feet to be held to the fire on the other. As it should be.
I haven't run out of questions, but I've run out of word count. Let's see what the next day and a half brings.
Updated, 6:00 am US ET Sept 16, with some minor tweaks for reading clarity.