[sws_grey_box box_size="690"]SUMMARY - Infor is holding its annual user conference in New Orleans this week and it has announced the release of its new platform Xi, as well as a new ambition to go after mid-market cloud ERP players [/sws_grey_box]
Inforum14, held in New Orleans this week, is where Infor highlights how the company has reached a turning point in its go to market strategy. The past four years have been spent reengineering its applications for the cloud, restructuring around its all-important ION middleware and making use of its NYC-based design agency Hook & Loop to create beautiful user experiences.
Until recently this has all been a relatively low-profile affair. Not anymore. Infor now wants to shout about what it has achieved, through the better use of its sales reps and via big marketing investments, and push its customers onto its latest platforms that reside on the AWS cloud.
Infor has definitely been playing catch-up in many respects, not only with regard to its more traditional competitors making big acquisitions in the cloud, but also with regard to the public-cloud born companies having grown rapidly around them. However, has this inadvertently played to its advantage? Has a slow and steady approach resulted in a strategy that others may be a little envious of?
By way of background, for the past year or so Infor has been pushing its 10x suite of applications, which are basically released according to a set of standards – in that they are mobile optimised, make use of the company's social capabilities (ming.le), adhere to the Hook & Loop SoHo design standards, are built around ION and operate in the cloud.
Infor has historically focused on micro-verticals and built apps that cater for that. This isn't something that will change and it was something that the Infor exec team were keen to highlight to its customers this week. CEO Charles Phillips said during the opening of the keynote:
Our strategy at its core has not changed – we are focused on specialised micro vertical suites, applications built around the architecture of the internet (open source), and creating experiences that people love.
Speed to value. We don't want you to spend years customising, setting up infrastructure, training people on products. Speed to value will be created with a cloud strategy.
We don't have one product that tries to address all industries – it's hard to innovate that way
Earlier in the year, Infor announced that it has partnered with AWS to take advantage of the cloud, not wanting to make its own investments in infrastructure, and recognising that it can't can't quickly (or cheaply) compete with Amazon's global footprint and cloud capabilities. You can read some stories we wrote earlier this year on Infor's strategy to date, here and here.
Phillips and the rest of his ex-Oracle cohort took to the stage in New Orleans to announce an update to 10x with the release of its latest technology platform, Infor Xi. Essentially this builds on the company's cloud capabilities with Amazon, including some new open-source features, as well as cements the mobile-first design approach.However, the biggest addition was the introduction of 'Advanced Science'. This will be powered by Infor's all new Dynamic Science Labs, a research centre focused on the opportunities of big data analytics, based near leading university MIT, and which aims to build predictive analytics into Infor's Xi apps.
Phillips said that he hopes the new Lab will create a “breed of applications that anticipate what it is going to happen”, as opposed to just being able to see what happened and why it happened. The Dynamic Science Labs follows a similar strategy that Infor had with Hook & Loop, where it has hired a data expert out of MIT and charged him with building out the capability as he sees fit, rather than getting a bunch of enterprise software bods to have a go at it.
Phillips added that he doesn't want design and analytics can be separated out. He believes that applications should be created so that you are presented with useful analytical insights as you go through the processes and workflows – rather than a separate application function. Interestingly, these analytics capabilities are not going to be charged for and are going to be provided for free (which got a big round of applause during the keynote).
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The other main talking point today was the launch of Infor's new ERP cloud platform for the mid-market – dubbed CloudSuite Business. This is a direct challenge to NetSuite – so much so that Infor also announced a swap-out programme for NetSuite customers that want to switch over to Infor's latest release.
A few jibes were dished out, which is not unusual on the cloud conference circuit – but what is clear is that whilst Infor is dedicated to its core micro-vertical apps, it is now also making moves into the mid-market space with this latest broad appeal cloud ERP app.
We have a lot of micro-vertical solutions, but a lot of people don't need that. Until now buyers only had the choice of on-premise monolithic software, or companies that are inadequate – like NetSuite
Whilst its focus is micro-verticals, it will now also target other cloud markets, such as mid-market ERP, and less difficult fringe applications, such as CRM - which was evident from its recent acquisition of Saleslogix.
A couple of other interesting points came up during a press Q&A with the Infor exec team today. Firstly, with regard to Infor's cloud strategy and its partnering with AWS. Someone noted that Infor's strategy is unusual compared to the rest of the cloud market, where most players have focused on buildingout their own infrastructure. Would customers feel more comfortable with an Infor-owned data centre? Should Infor have considered making some infrastructure investments? Phillips dismissed these claims and said:
Coming later to the cloud actually helped us. I've seen these cloud-owned data centres and they aren't run that well because it's hard to do everything yourself. They can't come close to what AWS can do.
There's also reason that the number of cloud companies that have been out there for a decade still don't make money, they haven't figured out how to do it yet. We just think the economics work out better.
Fair enough. But what about that traditional customer base? Are they going to be keen on the move to the cloud? Phillips said that the company is making some changes internally and with its partners that will accelerate the transition to the cloud. He said:
We have changed compensations for sales reps so that it's favourable for them to push for the cloud. We have also skewed investments in that direction - now its a matter of how fast and taking advantage of the opportunity.
The partner's aren't quite there yet, they've built a business around on-premise software, it's different from what they've been doing. But we will help them with that and they will get there.
Finally, there was some concern amongst the journalists and analysts that Infor has been a bit too retrospective in its approach, in that it has been so focused on the reengineering over the past four years, but has offered little about what's to come for the company. However, Phillips said that Infor currently has about 20 'white space' projects on the go that it is investing in, which if 20% of those work out, he believes will be a “huge home run” for the company.
Namely these involve working with new micro-vertical industries, where companies have apparently come to Infor asking them to develop new suites focused on their markets. Phillips hinted that new cloud suites for the construction industry and oil & gas are in the pipeline.
Infor has gained 3,000 new customers in the last year, hired 1,065 new engineers and today reported in its Q1 FY2015 results a 22 percent increase in software licence fees and subscription revenues. It is certainly gaining momentum.
Infor also wows with its app user experience, which it claims 'cuts out the bloat' of enterprise software and is good enough that people want to use it. The presentations of the latest Infor apps certainly leave a good impression. Hook & Loop's work has paid off and compared to some other cloud app conferences I've been to this year, Infor is streaks ahead in terms of usability.The cogency of Infor's strategy is impressive. It is clear what Infor is trying to achieve and how it wants customers to get there. The visibility into Phillips' vision is impressive and the direction is well defined. Customers should walk away from discussions with a firm understanding about what is trying to be achieved. Which isn't always the case with these events.
It could also be argued that Infor is in a better position than some of its cloud competitors, in that micro-verticals are its bread and butter. Something that others are only now trying to get into. Infor is both a micro-vertical specialist and a cloud player and is now also going after the fringe apps it hasn't played a big role in previously. If successful, it will have a lot of bases covered.
That said concerns remain. There is a definite feeling that most of the rhetoric is still about the hard work that has been put in over the past four years and that the company is breathing a sigh of relief as it gets ready to actively compete. Other vendors are now moving on to the next big things – IoT, wearables etc. - and yet we haven't heard anything on these hot topics at Inforum this year. Perhaps customers don't really care yet, but there is a feeling that Infor lacks content on the latest fashionable topics.
Also, having spent most of the day talking to customers, it is apparent that many are traditional Infor software users. Some I spoke to are dabbling with ming.le or ION, but none gave me a firm commitment that they will be running to the cloud with Amazon and Infor. If anything, the customers I spoke to are likely 3-5 years off making that shift.
Paradoxes remain. One customer I spoke to was put off by the Amazon partnership because they operate in a highly regulated industry in Europe and wouldn't get approval for running operations on Amazon Web Services. At the other end of the spectrum, another saw it as a brilliant advancement and said they have no qualms about Infor getting into bed with Amazon.
I'm impressed with what I've seen and heard today. There's not only excitement amongst the execs, but a real buzz at the conference about the company's direction. It seems that the last four years of hard graft might just pay off, much to some skeptics' amazement.
Disclosure: Both Infor and Netsuite are Premier Partners at time of writing.