Thursday, March 26, 2009

Infor's opportunity: value in maintenance and support

Infor's Dennis Michalis stopped by my office yesterday for a chat. Dennis is Senior VP, Global Partners, in charge of all of Infor's partners worldwide. Not that my firm is interested in becoming a partner of course (we maintain strict independence from vendors). But he lives down the street here in Orange County, so it was an opportunity to speak with an Infor executive face-to-face.

During the discussion, I pointed out the opportunity that I see for Infor and other vendors to differentiate themselves in terms of value and flexibility in maintenance and support offerings.

Dennis responded that Infor, in fact, has been working to increase the value of its support offerings. He pointed to Infor's quarterly survey of customer satisfaction with its support services that has been showing consistent improvement. In December, Infor won a customer service award from MarketTools, an online market research company. I normally don't put much stock in such "awards" as I'm never sure of the basis on which they are granted. But let's stipulate for a moment that Infor has in fact been making improvements in the quality of its service and support offerings.

In a time when major players such as SAP and Oracle are charging 22% of license cost for maintenance programs of dubious value and attempting to stifle third-party maintenance, now is the time for other vendors to step up and do things differently. Here is where I see the opportunity for Infor to become the "good guys."
  • Become known for quality of service and customer satisfaction. It doesn't lend itself to big-splash press releases, but it leads to installed base retention and an annuity business. It also leads to good customer references, which should allow Infor to scoop some new sales around the margins.

  • Offer tiered pricing for different levels of service. Some customers want platinum level support, with rapid response help desk access and full rights to future versions. Other customers have highly-modified or very old products. They never use the help desk and don't plan to upgrade. But they would like regulatory updates and access to new products on a selective basis. They only need brass-level support. There are probably two or three other levels of support that should be offered in between. Why force everyone into one level of service as SAP is now attempting to do?

  • Have a reasonable accommodation for third-party maintenance. This goes with the tiered pricing. There's no need for a vendor to take every last penny off the table. Some customers may want to buy brass-level service from Infor but contract with a local partner for help desk and contract maintenance. Allow Infor's business partners to be certified to offer such services. The partners provide a local presence, and it gives them another way to make money and keeps them in the Infor fold. It is a win/win/win all the way around.

  • Provide SOA capabilities under maintenance at no extra charge. Dennis Howlett wrote about this recently. Infor is in the midst of SOA-enabling many of its products, which should allow piecemeal upgrades of older products and easy integration with Infor's complementary products as well as those of other vendors. If this capability is included for all customers under some level of maintenance it represents a huge potential increase in value for Infor's customers.
All of this is especially valuable to a vendor such as Infor, with a huge installed base of customers on legacy products. Infor's customers are a big target for SAP, Oracle, and other vendors that want to migrate such customers to their own offerings. But installed customers are always looking for reasons not to migrate. Doing everything possible to make it cost-effective and easy for them to stay put is the key for Infor to retain these customers and keep them on maintenance.

This strategy could be adopted by any enterprise vendor with a significant installed base. I hope many of them will do so.

Related posts
Infor using SOA to breath new life into old apps
Infor chases customer for fees on 20-year old software
Infor reassures customers of financial viability
Infor layoffs, Dec. 2008


Dennis Howlett said...

Tiered pricing - now that's becoming a meme but it's the right thing to do.

Anonymous said...

1. Infor top execs and their VC, Golden Gate, have bled the company dry of any available capital for product development.
2. Infor's SOA strategy is nothing more than press releases. While a lot of emphasis is put on cross-selling these unrelated products, nothing has been done to actually make them work together. Nice powerpoints and lots of talk.
3. They are focusing all their efforts on their IBM based products such as LN(Baan) and the recently renamed old Mapics product to attract IBM as a possible buyer.
4. They are moving to a direct sales telemarketing model to sell software. After the recent slashing of margins, many of their top partners are getting ready to jump ship.The direct sales channel has been virtually eliminated.
5. Now that they have no chance of pulling off an IPO the idea of actually servicing customers and running a software company is not why they got into this game. Their customer sat story is a myth. Customers get their best service from the partners and Infor does everything they can to suppress this.
6. Infor's two reasonabley modern and decent erp products, SyteLine and Visual, would make a great buy but they really do not fit the IBM/Java/Websphere/Sonic MQ strategy that Infor is pursuing. The SL developers in particular are very dismayed that there is no effort being made to integrate with other MS offerings such as Sharepoint.
7. Expect another major round of layoffs as they continue to strip away anything that cuts into their maintenance revenue.

Anonymous said...

The previous poster might well be an SAP or Oracle employee or reseller for all we know... Can he/she prove otherwise? The points made look very much like talking points. I guess I'll use the convenient "Anonymous" tag as well.

My company actually uses three Infor products and I can personally testify that the SOA strategy is more than "just press releases." I will be able to say more later this year.

Frank Scavo said...

To both previous anonymous posters: I appreciate the feedback, and I intend to follow up with Infor and hopefully some Infor customers to verify the value of the SOA capabilities.

To the Infor customer on the previous comment, pls feel free to contact me directly (my email is in the righthand column) and confidentially if you prefer to let me know your experience, even if it is preliminary at this point.

Anonymous said...

What is the latest with the IPO? I am sure they havent given up, it was a major goal for them when I was there. I am sure it will happen.....any rumors as to when?

行行企企 said...

I guess the first Anonymous guy is a partner of Infor, probably selling Syteline or VM product line. I received similar complaint from a Infor's partner in North America before.

The second Anonymous guy is probably an Infor employee.

I think it is not fair to say Infor do not invest in the product lines. The recent release of Infor MyDay and Ln FP5 can prove Infor is still enriching its product lines. But I think the development progress is quite slow.

Frank Scavo said...

I want to comment on the second anonymous commenter, who wrote:

"6. Infor's two reasonabley modern and decent erp products, SyteLine and Visual, would make a great buy but they really do not fit the IBM/Java/Websphere/Sonic MQ strategy that Infor is pursuing. The SL developers in particular are very dismayed that there is no effort being made to integrate with other MS offerings such as Sharepoint."

This does not match what I am hearing from one Syteline partner, who reports that the new version of Syteline (8.01) does have good new functionality for CRM and embedded workflow (formerly separate products) and that there is now integration with Sharepoint.

If anyone has further info, pls email me. My email is in the right hand column of the post.