Shifting strategy: Infor casts its lot with Microsoft

Infor came out with two significant announcements this morning. Based on a briefing that Infor gave me yesterday, they point to a major strategic shift in direction. Infor's 70,000 customers should take note.

Two announcements
First, Infor announced something called Infor ION, which is a set of software services for application integration, document-based communication, and business process management, across Infor's own applications and non-Infor systems. Infor ION subsumes (my word) Infor's previous work on Open SOA, which was aimed at integrating Infor's existing applications portfolio. Infor is promoting ION as an alternative to "high cost middleware implementations." ION is currently in development, scheduled for release in Q4.

Second, Infor is moving all new product development to Microsoft's technology stack. The elements of the stack include Windows Server, MS Single Sign-On, MS Reporting Services, SQL Server, Silverlight, and Sharepoint. Infor will continue to develop its applications that run on other platforms, such as its IBM Series i and mainframe applications. But all new development will be all Microsoft.

It also means that Infor will deliberately abandon development of its own technology and tools. For example, in the briefing Infor said it was walking away from its own workflow engine development, its own Clear UX user-interface (which it had acquired), and its own efforts to build portal technology using open-source.

A strategic shift for Infor
These two announcements, taken together, represent a major change in product direction for Infor. Here is my evaluation:

1. Infor is right to give up trying to be a tools developer. There are very few application software vendors that successfully develop proprietary tools or technologies. (The only successful vendor, to my knowledge, is SAP, with its ABAP language--but that's only because ABAP dates from the early 1990s, when client/server development tools were not adequate for what SAP needed. Oracle is another, but Oracle is a technology/tools vendor first and an apps vendor second. Same with Microsoft.)
   
   There are major benefits for Infor in walking away from tools development. First, it frees up product development funds to focus on the thing that Infor customers really need: continued development, enhancement, and integration of Infor's applications portfolio. Second, by using Microsoft standard technology, it should also allow Infor to get there quicker with its ION integration and business process management framework. Third, it allows Infor to more easily recruit and retain product development and implementation personnel, as they will be working with technologies that are broadly supported in the marketplace. Finally, it is more attractive for customers, who won't need to have their IT personnel trained in another set of tools.
   
2. Alignment with Microsoft is the probably the best choice. It's something of a surprise, as Infor has mostly been thought of as more IBM-centric than anything else. But Microsoft is a better choice than IBM for standardizing its technology. Our research at Computer Economics shows that nearly every data center has Microsoft Server in its OS mix. The same cannot be said for any other operating system. This is especially true in the small company and mid-market, where Microsoft Windows averages more than 70% of the data center processing workload. Coming to its installed based with new products based on the Microsoft stack is an easy sell--not so if the stack were IBM's.
   
   Does this bring Infor into competition with Microsoft's own Dynamics enterprise software business? No more so than for any of the many other Microsoft-based vendors, such as Epicor. Furthermore, there is a huge upside for Microsoft, as the partnership represents a potentially bigger footprint for Microsoft among Infor's 70,000 customers.

I do have one area of question, and that is concerning leadership. It's an open secret than Infor has lost several key executives recently, most notably Jeff Ralyea, formerly VP of product management and Bruce Gordon, formerly Infor's CTO. These individuals were key architects of Infor's Open SOA strategy, which is now incorporated in Infor ION.

Does Infor have the right team in place now to move forward? Infor assured me that it does. The product strategy is being headed up by Soma Somasundaram, Senior VP of Global Product Development, who has a long history with Infor, going back to when it was Agilisys. He will work closely with Jeff Abbot, who is now in charge of both product marketing and product management. In terms of developers, Infor assures me that the bench is deep, with resources worldwide.

As indicated earlier, ION is still in development with release planned for Q4. That will be a key milestone to evaluate the success of Infor's new strategy. In the meantime, I believe the strategic direction is right. But execution is key.

If you are an Infor customer or Infor partner, please let me know your view on these announcements. Is Infor on the right track? Leave a comment on this post, or email me confidentially.

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Open source not immune to ERP vendor consolidation trend

The enterprise software vendor consolidation trend has now reached the open source corner of the market, with Consona's announcement that it is acquiring Compiere, Inc.

Background on Compiere and Consona
Compiere was one of the first open source ERP developers. I interviewed Compiere's founder and then-CEO Jorg Janke back in 2006 and wrote an extensive post about the product. At the time, Compiere was facing a rebellion from some of its community "freelance" developers, who took the open source code base and forked a separate development project, dubbed Adempiere. Read the whole post for background on Compiere. And read the many comments also, which give good insight into the issues and challenges of managing an open source project.

Since that time, Janke was replaced by Don Klaiss as CEO and eventually departed from Compiere altogether. Compiere continued to demonstrate some success in the market, however, as I noted in 2009 with its win of a very large deal at La Poste, a $27B (USD) global postal processing organization.

Consona, which is Compiere's new owner, has been rolling up smaller ERP vendors for some time. Originally the parent of Made2Manage, it changed its name to Consona in 2007 and has since acquired several other ERP and CRM systems for the SMB market, notably Intuitive, Onyx, Encompix, DTR, Cimnet, and Axis. Consona, along with most or all of the traditional on-premise enterprise software vendors, has had a tough several years due to the recession.

Issues in the Announcement
A couple of issues I note in the announcement this morning. First, the press release references 130 customers of Compiere today. But in 2006, Janke indicated to me that Compiere had about 250 customers. What happened to the other 120?

Secondly, what happens to Compiere's open source offering? Though founded as an open-source project, Compiere had been focused largely on its own proprietary enhancements, add-ons, and services--in other words, making money. As I noted in my 2006 post, this was one of the factors that led to some of Compiere's community forking the code to the Adempiere project. Now with Compiere's ownership under Consona, how much effort will the new owner put into continuing development of the open source code base?

Benefit of Open Source
In a sense, it doesn't matter as much as it would if Compiere's original code base was proprietary. One of the tenents of open source is that no matter what the owner of the code does, the users of the code continue in their rights to use, extend, enhance, and distribute the code. The Adempiere fork of Compiere is evidence of this.

To my knowledge, this is the first instance of an open source ERP/CRM developer being acquired by a vendor of proprietary software. It will be interesting to see whether Compiere's users are helped or hindered by this acquisition.

Update, 12:45 p.m. Read the comments on this post for more insights on Compiere's architecture. Plus, Ned Lilly has a really good post on the Consona/Compiere acquisition. Ned is in a particularly strong position to comment, as he leads another open source ERP project, xTuple (formerly OpenMFG). Ned's ironic conclusion is that Compiere "failed as a company" not because it was open source, but "because it turned its back on open source." But, please, read the whole thing.

Update 2:30 p.m. I have been educated by three Adempiere developers regarding the inherent multi-tenant architecture of Compiere and have therefore edited this post to remove my previous comments regarding Compiere's lack of multi-tenant capabilities. I was clearly wrong there. See the comments section on this post for details. Thanks, guys!

Update, 2:47 p.m. Josh Chalifour did some analysis of activity (or lack thereof) on Compiere's user forums and finds a disappointing lack of care and responsiveness from Compiere toward its community. Not a good sign and hopefully something that the new owners at Consona can remedy.

Update, June 21: I just discovered that Jorg Janke has been maintaining a website, Compiere from the Source, and he is planning to write "a very detailed three part blog about Compiere history and potential future." Check it out.

Related posts
Big win for open source ERP project Compiere
Compiere's open source ERP business model and growth plans
Consona layoff
Open source ERP and CRM carry strong ROI
Total cost study for an open source ERP project

Beware the malicious insider

Over at Computer Economics, we've published a new special report entitled, Malicious Insider Threats: Countering Loss of Confidential Information, Fraud, Sabotage, & Other IT Security Threats Posed by Trusted Insiders.

Most organizations are aware of the IT security threats posed by outsiders. Countermeasures such as firewalls, antivirus software, and intrusion detection systems are all aimed at these threats. Yet these measures do little to counter an even greater threat--that of malicious insiders within the organization.

As our study shows, however, many organizations do not treat these threats seriously. Such threats include fraud, sabotage, and theft or loss of confidential information caused by trusted insiders. These threats go beyond negligence. They represent purposeful action on the part of insiders to act in opposition to the interests of the organization, whether for financial gain, retribution, or some other motivation.

This report, based on a survey of 100 IT executives and security professionals that we ran last year, covers four categories of malicious insider threats: accessing confidential information without authorization, disclosing confidential information, executing fraudulent transactions, and sabotage of the organization’s systems, network, or data. For each category we report how seriously organizations perceive these threats and how frequently these threats actually result in violations of security. We then examine the extent to which organizations implement four best practices for controlling user access and 12 best practices for mitigating threats from IT personnel. Finally, we analyze the extent to which organizations take action to counter malicious insider activity by monitoring of insider email, keystrokes, computer files, and Internet traffic.

Read an excerpt of the full report, in this free research byte: Malicious Insider Threats Greater than Most IT Executives Think.