Infor achieves scale; explicates future focus
By Staff -- Manufacturing Business Technology, 9/1/2005 12:00:00 AM
From its founding in 2001 until now, enterprise vendor Infor has grown from a concept in search of a market to the largest independent software company serving small and midsize business (SMB).
With revenues of $500 million-plus and an aggressive but focused acquisition strategy—successfully digesting 13 companies (see time line at right)—Infor's vision is to harvest best-of-breed manufacturing and distribution software vendors to deliver robust functionality and deep domain expertise.
"We spent the first year just evaluating various markets," says Jim Schaper, chairman and CEO. "The manufacturing-distribution software market had the characteristics we liked, yet there were too many underperforming vendors. If we made one decision right, it was to enter this market to assemble a vertically integrated company."
Schaper aims to challenge SAP and Oracle, with a key difference: "We will not go horizontal—we're going to drive deeper into our verticals," Schaper says. With a half-billion dollars in revenue, and venture capital company Golden Gate Capital behind it, "We are at a scale now that our competitors can't marginalize us," he asserts.
Ultimate assembly
"I like what they're doing—in other words, the concept of being an assembler," says David Caruso, VP of industry strategy for Boston-based AMR Research. "Their acquisition strategy isn't just willy-nilly buying, but instead is driven by a matrix that makes sense. Now they are going about filling in the blanks."
In speaking to the software market consolidation trend, Schaper—like Caruso—stresses that Infor is an "assembler," not a typical consolidator.
"The question we get asked the most is what products are we going to kill. We aren't going to kill anything; we will evolve them," says Schaper, adding that the company will continue to add functionality to all its products either by development, partnering, or further acquisition.
Burnham, Maine-based Pride Manufacturing, which makes golf supplies, uses Lilly Visual Manufacturing from Lilly Software, another ERP vendor serving the SMB market and a recent acquire by Infor. According to Dale Thompson, technology manager for Pride, "[We were concerned about] Infor acquiring Lilly, and how it was going to affect us, but they've done a great job for us. We are working directly with developers that have provided us with a lot of services free of charge."
Common platform is key
Central to Infor's overall assembler strategy is Corestone, an integration platform that will bring into alignment all products around a common development environment.
"Corestone is how Infor is taking all these acquisitions and making them work together," says Bruce Knoll, director of information systems for Grand Rapids, Mich.-based Meridian Automotive, a Tier 1 automotive supplier. "I've seen software companies with great ideas, but they can't follow through. Or they have good management teams, but they can't come up with good ideas. Infor has both."
Schaper emphasizes Infor's strategy is based on adding value for the customer. "We're not strip-mining the business on a short-term basis," he says.
Though impressed with the strategy, AMR's Caruso concludes, for now, "We still need proof points that the assembly process becomes reality at customer sites. Corestone could be a very powerful glue for underpinning the strategy and assembling products, but it's important to separate reality from the elegance of the message."
Time line, 2002-present: Infor acquisitions
| VENDOR | Acquisition period | Solution set |
| Agilisys (formerly SCT) | May 2002 | Process ERP/supply chain management (SCM) |
| Brain AG | November 2002 | Automotive ERP/SCM |
| Future Three Software | June 2003 | Discrete ERP |
| Infor AG | February 2004 | Discrete ERP/SCM |
| daly.commerce | March 2004 | ERP/SCM |
| Varial Software AG | March 2004 | Financials/Human resources |
| NxTrend | June 2004 | Distribution/SCM |
| Aperum | August 2004 | Distribution |
| IncoDev Software | September 2004 | Process ERP |
| Lilly Software Associates | November 2004 | ERP/SCM |
| Mercia | January 2005 | Supply chain planning |
| MAPICS | April 2005 | Discrete ERP |
| Paragon | June 2005 | Truck routing/scheduling |
