Number of new customer wins a measure of confidence in rationalizing software acquisitions

In five years time, Infor amassed $2 billion+ in revenues, all recorded since its founding in 2002 as an enterprise software company. Growth was propelled by the deep pockets of San Francisco-based Golden Gate Capital; a big appetite for acquisitions, well above 20 companies thus far; and the mission to plug a perceived gap between small best-of-breed providers in vertical industries and large, cross-industry enterprise system vendors.

Jim Shaper, Infor president and CEO, says the strategy is twofold: fill the gap while simultaneously becoming a hybrid of the two.

“A lot of the traditional metrics for this market don't apply to Infor,” says Jim Shepherd, senior VP with Boston-based AMR Research. “But on the basis of revenue growth they've been outstanding. What we don't know—because no one has ever really done it before—involves the long-term prospects for a business model based on acquisition of a huge number of products, and whether they can pull together products that are competitive in brand new opportunities.”

Shaper doesn't lack for confidence in his model: he and Infor CTO Bruce Gordon will tell you they've already demonstrated strong performance in gaining new business.

“We measure ourselves on three things,” Gordon says, the first of which is a number of new customer wins. “That's not just another plant or factory of an existing customer, but a new logo business. Our run rate is to do 2,000 new customers a year.” Infor now has more than 70,000 customers worldwide.

Gordon says the other two metrics are customer retention on maintenance, running just under its goal of 95 percent; and investment in enhancing it portfolio of products. Infor's recently announced Open SOA strategy will figure prominently in rationalizing the spate of acquisitions, building competitive products, and successfully executing on its vision.

“Infor Open SOA is a technical expression of our business model that allows for rapid introduction of our acquisitions,” says Schaper, adding that Open SOA will be integral to the enhanced refresh of products, independent of the need for a middleware layer, permitting separate products to evolve independently, with Infor assuming the technical responsibility of ensuring they work together.

Such phased delivery with subsequent releases frees customers from forced migration and supports Infor's commitment to continued support of all products.

“We believe you must have components that are independent, and that use business documents that are interchangeable between components,” Gordon explains. “The goal is for customers to keep components they're already using, and extend them further with other Infor components they can use and upgrade to become more agile and competitive in their markets.”