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At Inforum 2019, Infor takes aim at SAP

Infor wants to take SAP head-on. At Inforum 2019, Infor executives described SAP's push to migrate customers to SAP S/4HANA by 2025 as an opportunity to do just that.

NEW ORLEANS -- Infor executives touted their plans to move customers off legacy platforms and onto newer, more modern cloud-based systems in an executive Q&A session that opened Inforum 2019, the company's customer and partner convention.

Its plan is also intent on poaching SAP customers who may be disgruntled at SAP's stated deadline to move users to SAP S/4HANA by 2025, a prospect that many customers consider to be overly complex and expensive.

While some analysts believe that Infor has a strong product line, particularly in manufacturing, which may be appealing to SAP customers, Infor also faces the same challenge of trying to convince the existing customer base to move to the cloud.

New executive lineup

Inforum 2019 is the first Infor event since the company shuffled its executive suite in August. Longtime CEO Charles Phillips moved on to become chairman of the board of directors. He was replaced by Kevin Samuelson, formerly Infor CFO. Samuelson was joined onstage by other Infor executives Soma Somasundaram, CTO; Jay Hopkins, the now-CFO; Cormac Watters, general manager and head of international business; Rod Johnson, general manager and head of Americas; as well as Jim Hannan, executive vice president of Koch Industries, which invested $1.5 billion in Infor last January.

The transition to the new executive team has been smooth, Samuelson said.

Inforum 2019 executive Q&A (L-R) Cormac Watters, Infor GM, head of international markets; Rod Johnson, Infor GM, head of Americas; Kevin Samuelson, Infor CEO; Jim Hannan, Koch Industries executive VP &CEO of enterprises; Soma Somasunduram, CTO; Jay Hopkins, CFO.
Inforum 2019 executive Q&A (L-R) Cormac Watters, Infor GM, head of international markets; Rod Johnson, Infor GM, head of Americas; Kevin Samuelson, Infor CEO; Jim Hannan, Koch Industries executive VP &CEO of enterprises; Soma Somasunduram, CTO; Jay Hopkins, CFO.

"The good news is [Charles Phillips] is chairman of our board and is still someone that we're all in constant contact with and is helping us continue with the strategy that he set," he said. "[The new executive team] is comprised entirely of Infor veterans and a lot of thought went into succession planning."

Multiple paths to the cloud

Like most of its competitors, including SAP and Oracle, Infor faces the challenge of moving customers off legacy systems and onto modern, cloud-based systems.

SaaS has been widely accepted for some business functions such as CRM, but it has taken longer for some of Infor's biggest markets in manufacturing to come around, according to Johnson.

"There's been a lot of hyperbole about the cloud for a long time, but it really does feel like it's ended in the last six to nine months," Johnson said. "It feels like our biggest markets in manufacturing and healthcare are finally coming to the conclusion that this is the path forward."

The way forward involves multiple paths, and companies can find an alternative that works best for them, Johnson explained.

One path is to start by moving data to an Infor data lake to get it ready for analytics; a second path is to first move edge applications before moving core applications; a third path is to help customers build a strong business case for migrating to the cloud, Samuelson said.

"We'll have to do a better job in providing multiple prescriptive paths forward," he said. "We want to maintain that asset, but the business is going to increasingly need these new capabilities."

It's a combination of the carrot and the stick: You've got to lead with the carrot, but there's got to be a stick.
Cindy JutrasPresident, Mint Jutras

Infor's multiple path approach to the cloud is a better strategy than what it has advertised in the past, according to Cindy Jutras, president of Mint Jutras, an ERP research and advisory firm.

"It's a combination of the carrot and the stick: You've got to lead with the carrot, but there's got to be a stick," Jutras said. "A lot of these older heritage customers don't understand what they're missing out on and they won't continue to be competitive if they stay on the old systems. The world is changing and they need to be educated on this and how they're being left behind."

Taking on SAP

Infor also took aim at SAP. Samuelson said that SAP's approach of forcing all of its customers to S/4HANA won't work because different industries are moving to the cloud at different speeds. For example, Infor's healthcare customers are moving to the cloud rapidly, while manufacturers are taking more time.

"I can't see a scenario where that entire industry has moved to the cloud, and I don't think we'll ever be in a position to force march our customers to a technology that they're not ready for," he said. "For those customers that are unhappy being forced somewhere, we'll be happy to take them on."

Germany is Infor's largest and fastest growing cloud market, according to Infor's Watters.

"Truly every SAP customer is coming in to look at Infor," he said. "There is a very strong anti-S/4HANA movement, particularly in Germany."

The attempt to move in on SAP's turf makes sense to Holger Mueller, vice president and principal analyst with Constellation Research Inc.

"Infor's cloud products are much farther along than SAP's, as they've been around for as much as 10 years while SAP S/4HANA has only been around for five years," Mueller said. "[Infor's] specific industry focus is something that customers always want to have, so if they don't go to SAP customers now, when will that happen?"

Mueller could not confirm that Infor's business has been growing strongly in Germany, but it would not be surprising. In 2006, Infor acquired Baan, a Netherlands-based manufacturing-oriented ERP system that competed with SAP strongly before failing in the late 1990s.

"Infor has always been strong in manufacturing, and many of these customers may have been Baan customers, which always competed well against SAP," he said. "Naturally people keep tabs on things that work, and Baan worked well for manufacturing companies. Now that it's part of Infor, they want to talk to people that can help run their factories.

Infor may be making inroads on SAP in the core ERP business, agreed analyst Jon Reed, co-founder of the ERP news and analysis firm Diginomica.com.

"If their growth rates in Germany are to be believed, it tells you that they're having some success on SAP's home turf with their message," he said.

He qualified that statement by saying he hadn't seen independent verification of that success.

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At Inforum 2019, Infor executives charged at SAP. But can the company compete?
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