Inforum 2020 - Infor doubles down on cloud acquisition, bucks trend on rushing out COVID-19 apps

Infor kicked off its annual (and now virtual) user event this week, Inforum 2020, with details of how its industry-specific 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.

Now, as we know, these sorts of percentages aren't as meaningful as specific numbers increases, but for some perspective Infor now claims to have more than 14,000 customers in the Infor Cloud. But what's particularly noteworthy about the announcements coming out of Inforum 2020 thus far, and the conversations we've been having with Infor's senior executive team, is that the company isn't taking a reactionary approach to the new COVID-19 world of work.

Unlike some of its competitors which have released a wide ranging number of COVID-19 specific apps, such as workplace monitoring and management tools, Infor appears to be focusing in on highlighting its industry-specific capabilities and putting in place mechanisms that make buyers feel comfortable getting to the cloud, quickly.

By way of background, 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.

However, whilst Infor has made significant progress, it's also true that it still has a large number of customers using its older on-premise applications. It appears that the vendor has identified that COVID-19 will spark a huge change agenda across this install base, as buyers consider their digital capabilities and focus on resilience - and it wants to be sure that it is ready to capture that opportunity.

In fact, last time we spoke with Infor CEO Kevin Samuelson he was explicit about how COVID-19 will drive cloud adoption and that Infor needs to deliver value quickly for buyers.

We got the chance to speak with Cormac Watters, Infor's Head of International Markets, about how customers are adapting to the new COVID-economy and what behaviours he's seeing in the market. On the point about competitors seeing opportunity in COVID-19-specific apps, Watters said that Infor's long-standing focus on vertical functionality has meant that it didn't need to go down this path. He explained:

We didn't feel the need to create COVID specific apps because we believe that we offer good industry solutions and there are aspects there that just need to be fine tuned. If I look at asset management, we needed to make sure that we put some changes into the software that allowed more mobile usage against the asset management registers so that you could do the inspection and reporting on the mobile device.

But we didn't see that there were any glaring holes in what we currently have. It was actually a bit more of exposing and reminding everybody about what was in their suite that they hadn't been using already.

Getting focused

Watters said that since the start of the pandemic there has been a definite shift in the conversations he and the company have been having with customers. At the start it was about survival and figuring out how to continue operating under COVID-19 restrictions. Whereas now, the dialogue is more strategic and long-term. He said:

There has been a shift, it's much more focused. [Customers are asking], how do we stay relevant in this current world? They're wondering why they are so stuck with what they have. They're saying ‘we can't make the changes we want to the system quickly and therefore we can't react as quickly to the COVID implications'.

And then it's, what is this cloud thing? Can you get me to the cloud? I kid you not, there have been several customers that have had problems accessing their data centres. It's crazy. They also want us to take away all the modifications that they've spent years putting in place. It's been interesting that the business leaders are much more attuned to wanting to be standard, if the standard is good enough.

In addition to this, the change that Infor is seeing this year compared to previous years is that buyers aren't particularly interested in a ‘start small and scale' approach. Instead there appears to be a recognition, according to Watters, that they need to get to the cloud quickly, enable their business with the right tools and train employees up to be effective. Watters added that the IT team's role has been elevated throughout the pandemic. He explained:

In the past you might get someone saying, let's start slowly and do a small subsidiary - suck it and see. Now it's, how quickly can you get us to a modern platform? With people working from home there's a massive requirement to say, how can you make my system mobile? I know we've been talking about it for five, ten years, but it's real now. They want that user experience. The scope is broad, do it as quick as you can, but also make it as safe as you can.

This is the other concept that's now emerging - if we are worrying about the infrastructure and the connectivity, the customer wants to know what they should be worrying about. What we're seeing is the IT teams at the customer now having to really understand that they're not the ERP provider, they're the people that need to be responsible for data, testing and training. I think it takes away a lot of the noise and makes it much more direct.

A new Bill of Rights

With this context in mind, it was interesting to see that Infor this week also announced a new Multi-Tenant Cloud Customer Bill of Rights. The aim of the Bill of Rights is to provide an extra level of assurance for customers considering CloudSuite and give them a mechanism with which they can hold Infor accountable.

The Bill of Rights defines standards and policies related to Infor's multi-tenant cloud infrastructure. This has been driven in part by Nancy Mattenberger, Infor's Chief Customer Officer, who is thinking about how Infor can be perceived as a long-term partner of customers and is looking to put the ‘customer voice' into everything Infor pursues.

The standards and policies in the Bill of Rights include the following (although it is expected that this will expand over time). We have quoted the Bill of Rights verbatim:

• Flexibility - on an annual contract basis, customers can swap seats among any of their SaaS products to suit the evolving needs of their business

• Transparency - pricing for programmatic access, storage, and additional environments is transparent and readily available, to help avoid billing surprises.

• Ease and speed of obtaining support - Infor endeavors to provide the best support response in the industry. SaaS customers enjoy 24 x 7 x 365 support for all Severity 1 infrastructure outage and production system issues, with target response times within 30 minutes from receipt by a qualified technical resource.

• Availability to count on - Infor is committed to exceeding industry standards for uptime. Infor's standard service-level agreement (SLA) notes a 99.7% availability benchmark, and Infor will share its availability status with customers.

• Peace of mind knowing data is secured - Customer data is secured. Infor is a leader in security practices in the enterprise solution SaaS market as evaluated by various third-party security ratings services.

• Customers control their own data. Upon request, Infor will return, without charge, a customer's data from the SaaS environment in native form within 30 days following the end of a contract.

Commenting on the need for such a document and the commitments it involves, Watters said:

Software contracts can be accused of being quite complex. In essence what we are trying to achieve is a lot more clarity as to what's included, in a positive way. Accountability for the customer, to hold us accountable. And then genuinely this is about us being a partner now, we're actually heavily involved in delivering the service every day. So as that becomes more real, what does that mean? What can you expect from us outside the contract?

It just takes away a lot of the angst and anxiety. A lot of the stuff we've included in the first version is stuff that we would have been asked many times in previous negotiations - but it's just being up front so they know that this is inherently going to be fair because it's a Bill of Rights. We think it's a good start and there's more to come.

My take

Interestingly, when I asked Watters what success looked like for him over the next 12 months he said that it would be proof that Infor could routinely deliver large cloud projects in under 9 months. He said that this does happen now, but he'd like it not to be special cases and more regular.

You get the sense from Infor that it has geared itself up to take advantage of (what it hopes) will be a surge in interest from buyers, as they consider how they need to adapt and change in the wake of COVID-19. A fresh executive team is in place and all the rhetoric is about securing customer trust for the long term in the cloud.

However, Infor won't be the only company vying for the attention of buyers looking to make new investments. The vendors that will win in this are the ones that can provide the answers to the complicated problems that businesses are facing over the next few years.