UK..........
£20
Europe..........€40
Rest of world..........$38
May 2009
The IT skills cycle
Smart cutting
Trending IT spending
UNDER THE RADAR
You probably won’t recognise Jim Schaper, but the firm he
steers is number three in enterprise apps. CBR reveals the
mysterious Infor.
Features
19 Under the radar Infor is the third-largest enterprise
software company, yet you may never have heard of it.
An aborted IPO hasn’t helped, as Jason Stamper reports.
22 Peddling the IT skills cycle: how to get off?
With the often unpredictable fluctuations of the business
world, companies can struggle to ensure they have
19 Best-kept secret: Infor
the appropriate skillset at all times. By using flexible
resourcing it is possible to respond to a fast-changing
world without making redundancies later. By Mike Devlin,
director, Morse.
26 If the weatherman says it’s raining... CBR
examines what may happen to IT spend this year and
next, what technologies could come to the fore during the
recession and what the latest round of consolidation in
the industry means. Steve Evans reports.
22 Why flexible resourcing works
32 Rational decision making for IT leaders: the
three perspectives of IT service delivery Managing
director Dr Richard Williams and principal business
architect Gordon Miller of Procertis describe a combined
“We have moved from approach to managing a notoriously tricky area.
being known as an
acquiring company to a
true innovator.” 26 Predictions for IT spend
Jim Schaper, CEO, Infor
Departments
7 This month A round- 36 Q&A Leslie Stretch
up of this month’s most is president and CEO of 32 Service delivery from all angles
interesting stories including California-based Callidus
the security risks of social Software, which claims to
networking and the benefits be a leader in the field it
of flexible working. calls sales performance
management, with a
30 Smart cutting Is Software as a Service
it possible to reduce IT approach. Jason Stamper
resources without losing asks the questions.
business, and should staff
cuts be the last port of call? 37 Results: Buying spree
By Paul Michaels, director Jason Stamper rounds up
of consulting at Metri UK. the latest M&A activity.
35 Online The blogosphere 42 Next month What to
muses on Intel’s record read, where to go and what
fine for breaking anti-trust to buy next month.
regulation.
42 Throw some punches
CBR profile: Infor
Infor is the third-largest enterprise software company, yet you may never have
heard of it. An aborted IPO hasn’t helped, as Jason Stamper reports.
UNDER 19
THE
RADAR Jim Schaper, CEO, Infor
S
ome of our critics say we have a 31 software companies. The run helped give space, including Lawson’s acquisition of
very wide diversity of applications, it that annual run-rate last year of more than Intentia for $607m, PeopleSoft’s acquisition
to which I reply: ‘No shit’.” So says $2.1bn and took its total customers past the of JD Edwards and then Oracle’s acquisition
Jim Schaper, the straight-talking 70,000 mark. Yet it remains privately held, of PeopleSoft.
CEO of the world’s third-largest backed by Golden Gate Capital and Summit But Infor’s acquisition spree led to
enterprise applications company, Infor. Not Partners. some commentators calling the company
that you are likely to recognise Schaper in “an aggregator” rather than an innovator.
the street, and nor are you likely to be very It was clearly intent on growing through
familiar with Infor Global Solutions, if you acquisitions but was it doing much more than
have heard of the company at all. “We have moved from buying software businesses and milking their
Yet Infor is considered the third-largest maintenance revenues for all it could?
enterprise applications provider, behind
being known as an It’s a charge Schaper is quick to refute.
Oracle and SAP. Headquartered in Alpharetta, acquiring company to “We have moved from being known as an
Georgia, it’s no typical technology firm, acquiring company to a true innovator in
and not just because it isn’t headquartered
a true innovator in the the applications space,” he tells CBR. “We are
in Silicon Valley. But with revenue last year applications space.” spending $325m on top of our normal R&D
of about $2.1bn, 9,000 employees in 125 Jim Schaper, CEO, Infor spend on our new SOA [services oriented
countries and more than 70,000 customers architecture] infrastructure. We’re three
worldwide, it must be doing something right, years into a seven-year programme. The first
mustn’t it? SOA-enabled component will reach general
So why is Infor one of the best-kept secrets Its acquisition of SSA Global in May 2006 availability in June, with two more shortly
in enterprise IT? Why is it that even AMR for $1.4bn united more than 30 legacy, iSeries, afterwards. There will be 16 more by the end
Research called a recent report on the company and client-server ERP vendors, such as Baan, of calendar 2010.”
‘Infor: The $2bn Enterprise Application BPCS, BRAIN, Infinium Software, Lilly According to Schaper, of the company’s
Company You’ve Never Heard Of ’? Software Associates, MAPICS and System21 9,000 staff, more than 2,000 are in product
How did Infor grow to more than $2bn under one roof. As Mike Greenough, SSA’s development.
CBR May 2009
in sales without the company or its CEO chairman, president and CEO said at the Infor’s strategy of integrating its disparate
becoming a household name, at least in IT time: “In a rapidly consolidating marketplace, portfolio of acquired and home-grown
circles? we have seen that size and scale matter.” applications using SOA – and indeed using
The answer is in part down to Infor’s It’s true that the marketplace was indeed it to create new functionality in the stack – is
amazing run of acquisitions. In the four years consolidating fast. Infor’s SSA buy followed certainly ambitious. Many of its acquired
to 2008, Infor spent almost $4.4bn to acquire a spate of M&As in the midmarket ERP applications were developed before SOA even
CBR profile: Infor
it doesn’t have the exposure of the public
companies, yet it also can’t simply use
“We’re in a very unique position of being private but big acquisitions as the events to garner it
having cash and the equity of our sponsors. But we attention – as Schaper says, the back-office
“needs to catch up” before it starts buying at
also need our back office to be ready for an IPO” the pace it once did.
20
Jim Schaper, CEO, Infor It’s perhaps for this reason that Schaper
chose to write his customers an open letter
(http://tinyurl.com/qswlwt). “I have been
existed, and are fairly ‘brittle’ applications that and we have begun the process of becoming asked: ‘How is Infor doing these days?’” he
are difficult to modify without upsetting their Sarbanes-Oxley compliant.” wrote. His answer? “We aggressively built our
large installed bases of users. When is an IPO likely? “We will certainly business and, in less than seven years, now
“It is a big challenge,” Schaper concedes, attempt to file again when [the market] is generate more than $2.1bn in annual sales.
“but we have a CTO who has the vision and available, when there is an appropriate By way of comparison, it took both Microsoft
the team to pull this off. Remember not every window. I wish I was smart enough to be and Oracle 17 years to reach the same level…
product will be SOA-enabled. But all the able to tell you exactly when that might be,” Infor is built to last.”
major product lines, including our iSeries Schaper says. He said that customer satisfaction is
applications, will be SOA-enabled. Is now actually a rather good time for at “an all time high”: 94% of customers
“This seven-year development effort a company like Infor to grow its business renewed their maintenance and support
is certainly not for the faint of heart,” he through acquisitions? “Yes and no,” says relationships this year and, during the
says. “iSeries was one of the first that we Schaper. “There are more opportunities as past four quarters, Infor won back 425
SOA-enabled, so if you imagine that some private companies with a good deal of debt maintenance customers, which is more
customers are migrating to newer platforms run into problems or sub-scale companies than double the previous four quarters.
or applications, this gives them a way to pull can’t sustain their business in the downturn. Why did Schaper feel the need to write the
things out and put things in – it’s compelling.” When we were acquiring last, the competition letter? “We’re a private company and don’t
to buy each target was not other trade buyers publish our financials,” Schaper told us, “and
The IPO that wasn’t but private equity buyers. That’s changed too I spend half of my time talking to customers.
Until the credit crisis in international – the debt markets have changed forever.” Every company asks the same question: how
markets, Infor was looking to an initial public Of course Infor has tough competition, and are you guys doing?” CBR
offering (IPO) early this year. Still privately not just from public companies such as Oracle, Read our February profile of Lawson,
held, the company believes its portfolio of SAP and Microsoft. In various markets and including an interview with CEO Harry Debes,
enterprise applications stands it in good stead geographies it also competes with companies at www.cbronline.com.
to compete with the largest vendors in the as diverse as Lawson, Sage, Epicor, IFS, QAD
space, especially in the mid-market tier. An and salesforce.com. Does Schaper believe the
IPO would have given it increased visibility, firm is winning market share? “My opinion is CBR opinion
as well as additional cash and stock to make that it depends on the market,” he says. “The
further acquisitions as it saw fit. midmarket is 80% of our business and we are Infor will find it hard to change the
“If you asked me a year ago I would have the market leader there, and there is no doubt perception that it is an aggregator of
said we would now be in the midst of an IPO we are growing market share. In ancillary areas acquired companies, not least because
registration,” says Schaper. As a result, Infor it’s hard to tell.” its brand is not as strong as it could be
made few acquisitions during the course of Does Schaper, like Lawson’s CEO Harry outside of its customer base. But the SOA
2008. “We needed to allow our back-office Debes, believe that offering vertically tailored project could go some way to delivering
functions to catch up with all of the previous applications in the midmarket is a vital way new innovations that help it reinvent
acquisitions,” he explains. “I don’t think you of differentiating from the larger vendors’ itself, and it points out that it won 2,165
can make a major acquisition and then go more horizontal offerings? “You need a mix,” new customers in the past four quarters
public the next day. So we made a couple of Schaper says. “You can’t do one without the in competitive situations. Aggregator
minor acquisitions in 2007 and none for just other. You can’t reach the scale you need or not, it is winning at least some of its
over a year. without doing a mixture of both. Some of our competitive deals. The difficulty today
“But today the IPO market doesn’t critics say we have a very wide diversity of is that the company is in something of a
exist. I don’t know when it will come back, applications, to which I reply: ‘No shit.’ In this
limbo as it clearly still wants to IPO, still
so perhaps we will once again get into an environment, being diversified serves you has its eye on further acquisitions and
CBR May 2009
acquisition phase,” Schaper says. “We’re in incredibly well.” has a big development project underway
a very unique position of being private but to boot. We don’t expect Infor’s brand
having cash and the equity of our sponsors. Tell it like it is awareness to change much until it gets
But we also need our back office to be ready There’s no doubt though that the plan to IPO, that IPO out of the way. But it will surely
for an IPO: they can file their reports in a and then the need to put it on hold, has left continue to win customers quietly as it
timely fashion and meet SEC requirements, Infor in a bit of a limbo. Still privately held, waits for the window to open.
