I received a quick phone briefing on the news from Duncan Angove, Infor's President of Products, Marketing and Support. Duncan himself is new with Infor as of last December, part of the new management team brought in from Oracle by CEO Charles Phillips.
The press release announcing the acquisition provides the primary talking points. But I wanted to get more details behind the announcement. Here's what I learned.
Product strategyThe acquisition is being driven by the top line (i.e. increasing revenues) and by the desire to create a "third-choice" for the top tier of enterprise buyers (i.e. someone other than SAP and Oracle) by delivering a strong offering for key industries. For example, Infor is interested not just in process manufacturing or "food and beverage," but "bakeries" and other sub-verticals. It intends to offer functionality that takes into account how bread dough rises at certain altitudes, or how long it takes an oven to reach its desired temperature, for example.
According to Duncan, there is little overlap between products of the two firms and they complement each other well. For example, Lawson has very strong presence in healthcare, and Infor does not have healthcare-specific offerings today. But Infor does have a strong asset management product, which is of great interest in hospitals, which must manage detailed information on medical device equipment. Infor sees the integration of Lawson's healthcare systems with Infor's EAM offering as an attractive offering.
Likewise, healthcare providers today face constraints due to the shortage of skilled nurses, and managing the productivity of nursing staff is a key driver of success. Lawson has strong human capital management (HCM) offerings for healthcare, which Infor intends to integrate with its own time-and-attendance and workforce scheduling applications (from its Workbrain acquisition), again, offering a more powerful solution.
On the Lawson M3 (formerly, Intentia) side, Infor sees strong synergies with its other manufacturing offerings, specifically with its product lifecycle management and supply chain products which many consider as best-of-breed.
Technology strategyHere's where things get even more interesting. I wanted to find out how Infor viewed Lawson's M3 technology, which is 100% Java-based, in light of Infor's decision last year to standardize as much as possible on Microsoft.
Well, as it turns out, with the new management team in place, Infor has un-done its decision to standardize on Microsoft for key elements of its technology stack. Infor now prefers to stay "open" on the technology side. It will continue to leverage Microsoft Sharepoint but will leverage open source components for some elements of middleware, such as the Apache web server, OASIS standards for document exchange, and open source reporting tools. The technology stack will vary by product (e.g. Syteline will continue to be 100% Microsoft), but newly developed complementary products will not standardize on Microsoft SQL Server, for example, as had been Infor's statement of direction earlier.
As far as cloud deployments, Infor will continue to leverage the co-location data center services of Savvis and does not see a conflict with Lawson's strategy to host instances of its systems on Amazon's cloud. Infor currently uses Amazon's cloud to handle peak workload requirements, so it is not unfamiliar with Amazon's services.
Interestingly, Infor claims that the Infor/Lawson combination will have over 1 million users "in the cloud." The bulk of these will comprise Infor's current cloud-based users of its asset management and expense management systems, as well users of Enwise, a SaaS provider of HR service delivery and workforce communication solutions, which Lawson itself acquired in December 2010.
Impact on Lawson customers and employeesAs with any software industry merger or acquisition, the primary concern is what the impact will be on customers, who have made large investments in Lawson software, and employees, who have invested their careers in Lawson. Concerning customers, Duncan maintains that, if Lawson was going to be acquired, Infor is the best place for its customers. It has committed not only to maintain current development efforts, but to expand them, with some of the 400 software developers it recently announced it was hiring. Lawson customers should see increased levels of investment with Lawson products, not lower.
Concerning Lawson's people, there is little doubt that there will be "efficiencies" (read: layoffs) in back office functions, but no plan to conduct layoffs among software developers. Infor sees no need to consolidate or push development offshore as a way of improving margins.
As in most cases like this, we'll have to wait to see what the real impact is on Lawson customers and employees.
My takeInfor's strategy to focus on specific industries, and sub-industries is a good one. It is quite similar to what Microsoft put forth in its Convergence conference for its Dynamics line of enterprise software products. The world has enough "broad spectrum" software that addresses a whole host of needs that no one company has, and thus carries a lot of unnecessary code, features, and configuration choices. Focusing on the differentiating requirements of specific industries (e.g. bakeries, breweries) is a better choice.
On the other hand, I think Infor's ambition to become a "third-choice" to SAP and Oracle might be a bit premature. In its ERP offerings, Infor is still a large collection of independently developed and maintained products. Lawson just adds two more (S3 and M3) to the portfolio. Nevertheless, there are enormous opportunities for Infor to establish itself as a strong contender in specific industries, short of being a "broad spectrum" provider like SAP and Oracle. There are also opportunities for Infor to position certain of its offerings in a two-tier configuration, with SAP or Oracle running for corporate or shared-services, with Infor offerings running at the plant or local office level. I would like to see Infor develop and promote out-of-the-box connectors with SAP and Oracle financials and shared services, such as order processing. That would strengthen its credibility further and would be quite attractive for many global organizations, which already are running Infor products in some of their locations.
Finally, the technology shift away from Microsoft, while understandable, represents the second or third major change in strategy over the past two or three years. Infor needs to make its technology strategy explicit and assure customers and partners that it plans to stick with it for the long run.
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