Software giants Oracle and SAP may be making a big noise in the enterprise software market but the old saying 'it's the quiet ones you have to watch' is certainly true of Infor as CEO Jim Schaper discusses its plans for CRM.
Amid all the hype and rhetoric that surrounds applications giants such as Oracle and SAP, and the noisy attention seeking of the new generation of software as a service (SaaS) players, it's easy to forget that there are a number of other major enterprise software firms that just seem to be getting on with their business – and in many cases doing perfectly well as a result, thank you very much.
One such firm is Infor. Before Oracle had embarked on its cheque-book busting acquisition spree, Infor had been mopping up various software trifes it found around the industry, often firms that had lost their way or, in some cases, never quite found it. Sitting in the Infor portfolio are, for example, the firms formerly known as Baan and Epiphany, one time pretenders to greatness in the market and now just part of a wider ecosystem of products.
Indeed, such is the breadth of the Infor portfolio that it's tempting to assume that the firm must be relatively well positioned to ride out the current economic storms, given that it has feet in so many camps. “I don't see the situation getting any better or any worse,” suggests CEO Jim Schaper when asked about the current market climate. “The macro climate has certainly stablised but you can clearly still question whether we've actually seen the bottom.
“The US went into recession prior to Europe and the rest of the world, so we've seen a general stablisation from the licence and professional services perspectives. We're seeing some stablisation in Europe, with some pockets of strength and some of weakness. Asia is a bit different. It went into recession late and it remains stagnant there, sluggish at best.”
Winning back customers
From a market sector perspective, Infor has noted some interesting trends. “We've shown growth on maintenance [from products], primarily due to the long term technology strategy that we've outlined for customers” says Schaper. “Segment by segment, we've seen far stronger revenues in our financial applications than I'd have expected. We've also seen good traction in CRM and HCM [human capital management], both best in class and integrated with ERP [enterprise resource palanning]. That said, the free-standing ERP apps business has been hit harder than others. But compared to our peer group, our results are in the very high-end of performance.”
“We have had a long-standing goal to keep the customers that we have. We are moving now from retaining them to winning back those who had applications, but chose not to use us for maintenance. It's critical to retaining customers and growing your installed base that you provide them with an upgrade path."
He adds that what the company is finding in the customer base is that CRM is one of the areas that is a new business driver. “What does CRM allow you to do? It allows you effectively to have contact, maintain and extend relationships with a broad number of customers; it allows you to have intelligence around your customer base," says Schaper. "Our customers are looking for ways to cross-sell products and increase their own footprint. That's especially true in financial services, for example. Most of the larger CRM transactions are with customers who have not done business with Infor before.”
That said, Infor is not playing explicitly to all the CRM market trends, such as SaaS and moving into the SME space, but there are plans to do so. “We haven't gone down market with our CRM products but we are looking at how we can take CRM into the classical SME market. That will most likely come in the form of SaaS-enabled applications,” says Schaper.
“Most of our customers have shared with us that they want on-premises solutions. That said, all of our new products will be SaaS-enabled. That doesn't mean that we're going to market them as pure SaaS offerings. What we want to do is be able offer something that fits with on-premise or on-demand deployment. We want the customer to be able to pick and play based on how they want to do it.”
Upping the stakes
With SAP having discovered a born-again enthusiasm for SaaS, doesn't this up the stakes for firms such as Infor? “The jury is out on SAP in terms of their ability to deliver,” reckons Schaper. “But they are SAP so you can never underestimate them. That said, it's one thing to talk about SaaS, another thing to deliver it. Within the SAP-type of customer for our CRM, we haven't really seen a desire yet for a SaaS version, so the jury is really out on that.
"Our goal is to be prepared to react in such a way that we meet customer needs. There will be hybrid customers. We will have customers who are on-premise but who want to bolt on additional applications and to do that using a SaaS model. They will be able to do that using our services oriented architecture.”
Schaper sees Infor's approach to SOA as a key competitive differentiator. “If you take a step back and look at what we're doing compared to SAP and Oracle, our SOA infrastructure is primarily open source, not proprietary. If customers are signed up for maintenance, they don't need to pay for it. It is agnostic – we don't want customers to feel that they have to rip and replace investments they've already made. You pick and choose how you want to do it on your own time frame. It's different to SAP and Oracle.
“We do compete with Oracle but more in the point level positions like CRM or asset management. We compete with them in ERP and financials but it's at the very low end of what they do and the high end of what we do. We see SAP or their channel partners on a more regular basis, so if I was pushed, I'd say SAP is our bigger competitor. Other competitors come about on a more geographical basis, such as Epicor in some areas.”
One aspect of Infor's strategy that won't be changing is its propensity towards acquisitions. Most recently it acquired SoftBrands, just the latest in a long line of purchases. “I can tell you it won't be the last,” affirms Schaper. “We have access to capital and a proven track record in acquisition. At the moment, valuations are depressed in the market so it's a good time to acquire.
“There are three types of acquisition: There's a complementary acquisition that enhances a solution that we already have; the second type enables us in existing markets to drive deeper or wider and, finally, we'll always look at an acquistion that takes us into a new market in which we don't currently play. That's been our strategy to date and it will continue.”