Infor hits $1 billion in SaaS revenue

(Image from Inforum website)

This year, Infor celebrates 20 years in the enterprise software industry. The last decade or so of this period was spent on a massive transformation strategy to become a cloud-first organization specializing in industry verticals and micro-verticals.

With that in mind, it will no doubt be considered a milestone, with the company announcing that in its 20th year of operation, it also achieved an annual run rate of $1 billion in revenue. SaaS.

Infor is privately held, owned by Koch Industries, so there’s no obligation for it to publicly report its earnings – but in a press and analyst conference this month, it appears the management team wants to signal to the market that it is experiencing significant cloud growth and its turnaround strategy is working.

diginomica has long covered Infor’s cloud strategy, where we’ve always been impressed with its long-term thinking and user-centric approach to design. Over the past few months, we’ve noted how the company is going the extra mile by aiming to deliver value to customers faster, digging deeper into out-of-the-box features for specific micro-verticals, and using complementary partnerships to further expand its reach in areas such as supply chain.

During the analyst briefing this month, Infor CEO Kevin Samuelson continued to emphasize the company’s long-term view in the market, where he believes by not having to worry too much about quarterly bookings, she can think strategically about creating value for customers over the years. , rather than months.

This new era for Infor will consist of several components. For example, the company continues to double down on its industry focus, going deeper into the verticals in which it has expertise, delivering relevant functionality, process insights and data. Similarly, Infor itself has invested in restructuring its internal organization around these industries, so that it can “speak the word” with its customers, rather than taking a horizontal approach to services, sales, and support.

Infor also aims to be as open as possible, ensuring customers are in control of their own ecosystem and investing heavily in its customer support capabilities.

Samuelson was also keen to point out that the ERP market is still going through fundamental changes, where he believes Infor is now in a good position to seek out buyers who are looking for long-term cloud partners. He said:

It’s an extraordinary time in the ERP market. First, we are going through a huge transition to the cloud. And unlike other areas of software that have largely gone through this transition, we are in the extreme first innings. Very few companies have moved to the cloud, and many will make that decision over the next few months and years.

And so it’s an opportunity for leadership changes and disruptions. And if we look at other areas where technology has changed and transformed, usually leaders change, and some companies that maybe weren’t as big or weren’t as successful in previous technologies, may shake the market and become true leaders. And we hope that’s us.

Infor’s Direction for the Next Decade

Samuelson said it’s important to note the context in which ERP purchasing decisions are made — primarily pointing out that relationships between ERP vendors and customers typically last more than 10 years. This is important because customers want their vendor of choice to have a long-term view of what success and innovation look like, Samuelson said.

This plays right into the wheelhouse of Infor, as the company has repeatedly pointed out that its ownership under Koch Industries means it has a large balance sheet and can make decisions that benefit the company (and its customers) in the long run. term. Rather than thinking of “success” as signing X number of bookings in a given quarter.

With that in mind, Samuelson said Infor can define itself differently from the market in three different ways over the next few years. First by his “true dedication to the industry”. He explained:

You hear this a lot now that it’s become fashionable, it seems like over the last couple of years if you’re into enterprise software, you’re declaring that you’re industry specific. But I think it’s a way of really differentiating ourselves and we’ve doubled down on that in the last 18 to 24 months.

And let me tell you what I mean by that. First of all, as you hopefully know, we are the only company with multi-tenant ERP systems specifically designed for industrial markets. So we have an ERP system specifically designed for discrete manufacturing industries, primarily automotive, aerospace and defense, and industrial manufacturing. A system specifically designed for processing and distribution industries, such as food and beverage. And one that’s built specifically for healthcare. It’s quite different from the alternatives on the market,

The alternatives in the market build the one system and then try to deploy it in many industries. Not only does this mean that the system is less perfect to begin with, but it also means that innovation must be spread widely over time.

And so, from an industry-specific perspective, as far as the product is concerned, it’s quite different. But as I mentioned, we’ve gone even further and really doubled down on this idea over the past few months. Organizationally, we have organized ourselves entirely around industries – from general managers to services to sales and R&D. Everyone in our organization now lives and breathes within one specific industry.

So not only do they know our products, but they also learn and familiarize themselves with that specific industry to understand what it takes to be successful. So when we say we’re all in it, in an industry, it’s the product, it’s the people, it’s the strategy. We only focus on a few, so I think that’s pretty unique, and it colors everything we do.

Second, Infor is focused on making it easier to deploy and operate its ERP software in the cloud for its customers. This means building a system with tight integrations across the Infor portfolio, but also being open to integration with other popular SaaS vendors, so customers have choice over their ecosystem. samuelson said:

We also took the time to reflect on what are the real challenges that customers face when deploying and benefiting from software, when adopting ERP products?

This manifests in many ways, all integrations, of our products together. Rather than some of the alternatives in the market saying, we have an ERP system, and we have a CRM system, and you buy them all, but they’re all different and need to be integrated. We’ve done all of this – our systems already work together right out of the box.

But they are also extremely open. So we have a CRM system. But we know that Salesforce is the most popular system out there. We want to be open to all the alternatives that allow our clients to succeed. And so we build the integrations to those in a way that customers can have an open ecosystem, whether they’re using our products or someone else’s.

Finally, the third pillar that Infor is focused on is increased specificity within industries to quickly deliver value to customers. Samuelson said Infor has a competitive advantage in this area because Infor’s expertise in specific verticals means it understands processes and data better than competitors. He said:

We bring exciting innovations to our products to make them easier to deploy and consume. Rather than just saying we are industry specific, because we have a product for discrete manufacturing, we actually offered an automotive configuration. And then not just automotive, which could be, for example, a parts supplier versus an OEM.

We’ve taken the best configurations that exist among our customers with feedback from our solution consultants, our services folks, so our products should then be at the start of deployment with the best use cases in mind – in the goal of being able to work quickly and get value much faster.

my catch

Infor’s transparency on its SaaS numbers is welcome, and the $1 billion run rate for its cloud products certainly seems like a milestone on the company’s journey to becoming a “cloud leader in ERP.” . While the past decade has seen Infor structurally change its approach to the ERP market – putting the organization and its products in the right place – it now seems to be focusing on delivering to customers. Delivery in terms of products that have deep functionality for customers in certain industries, but also quickly deliver the benefits to them.

It’s worth highlighting one last quote from Samuelson, which sums up the company’s current position, thinking about its long-term approach to success. He said:

We try to move the bar and think about success like when our customers realize their business benefits and celebrate nothing until we get to that point

We have the luxury of being in a position of ownership…[where we aren’t held] hostage to 90-day cycles or the vagaries of public markets. We have the ability to make those longer-term bets…and we believe that gives us a unique advantage to innovate and do things differently with customers – which results in a very different market outcome.

As always, the proof is in the pudding, and we’ll continue to talk to Infor customers about how this strategy and thinking is working out for them in the field. But on a higher level, it’s a compelling argument.

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