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Shakeup in the Infor leadership tree

Charles Phillips moved from Infor CEO to become chairman of the board of directors. He has been replaced by CFO Kevin Samuelson. Analysts believe recent revenue results may be behind the moves.

ERP vendor Infor has shaken up the leadership tree at the top levels: CEO Charles Phillips has moved on to chairman of the company's board of directors, and has been replaced by Kevin Samuelson, the company's CFO.

Phillips was CEO since 2010 after serving in executive roles at Oracle. Samuelson has been an Infor executive for 14 years, serving in M&A and CFO roles, according to the company. Samuelson led several strategic acquisitions at Infor, "helping grow the company from $35 million in annual revenue to $3 billion, as well as securing enduring investment partners," according to a press release announcing the changes.

In January, Infor received a $1.5 billion investment from its two primary shareholders -- private equity firms Koch Equity Development, LLC (KED) in Wichita and Golden Gate Capital in San Francisco. In February 2017, the company received a $2 billion equity infusion from KED.

Charles Phillips, InforCharles Phillips

Under Phillips's tenure as CEO, the company expanded with "more than $2.5 billion invested in product design and development in the past five years," according to the press release. The company described Phillips and Samuelson, as well as CTO Soma Somasundaram, as being instrumental in developing Infor's current product suite and shifting the company to the cloud. Phillips will continue to focus on strategy development in his role as chairman of the board. Somasundaram will remain the company's CTO and will take on the newly created position of president of products. Jay Hopkins will move from chief accounting officer to CFO, the company said.

"This announcement is a part of a planned leadership transition. We believe now is the right time to evolve our senior executive leadership structure to capitalize on our talent and our operating model, as well as support our long-term growth strategy," an Infor spokesperson said in a statement.

Disappointing revenue growth

But the change in leadership suggests that Infor's investors may not be thrilled with the company's recent performance, according to Eric Kimberling, co-founder and president of Third Stage Consulting, an independent ERP analysis firm based in Denver.

"Koch has invested a ton of money in Infor over the last couple years, yet Infor only showed 3% revenue growth in its most recent year-end results," Kimberling said. "This isn't enough to make a meaningful dent in SAP, Oracle and Microsoft's domination of the market. Meanwhile, other cloud providers are seeing faster revenue growth, especially in cloud and subscription fees."

Kevin Samuelson, CEO, InforKevin Samuelson

Samuelson's experience as CFO and his heavy involvement in Infor's M&A activities in the past suggest that the company may continue on an acquisition path, Kimberling said.

"Infor has done a lot to upgrade its product suite, so I suspect they are looking for more aggressive adoption and monetization of those enhancements and improvements," he said.

Cindy Jutras, president of Mint Jutras R&A, a consulting firm based in Windham, N.H., said she found the move surprising, given Infor's strong product and technology focus under Phillips. Samuelson's background is financial and not product-oriented, she said. Still, she doesn't expect the changes to be too dramatic.

"I would not expect too much of a shakeup from this, in general, because Phillips has been building some good depth in the levels immediately below him," Jutras said. "Somasundaram is strong in his role … and they have some good depth below as well."

Focus on the digitization of Infor's customer base

Infor has moved aggressively to the cloud, but more product rationalization and focus on the customer base will bring more value to the company and its customers, according to a collection of IDC Enterprise Applications and industry analysts.

"Like other legacy technology providers, Infor has a large amount of customers with multiple Infor products, multiple deployment models, and heavily customized products," the IDC analysts said in an email. "While the legacy business still has buyers, the move toward digital has many organizations rethinking their digital strategy. Moving into the digital world requires a strong emphasis on SaaS, cloud, data, analytics, and innovation like cognitive/AI, AR/VR, IoT and blockchain."

Phillips brought Infor into the digital age, and Samuelson is expected to bring even more emphasis to digitizing Infor's customer base, according to IDC.

"Infor's innovation in the digital economy will be critical to bringing more clients into the Infor product suite," the IDC analysts said. "The first 180 days will be key for Samuelson to identify more innovation opportunities, market and sell the new products, and help customers move into a digital world."

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