Infor’s Challenges: Is the glass half-full or half-empty?

If you count the hum of engaged customers as a sign of success, then Infor’s recent Inforum user conference was a major high-point for the come-back enterprise software vendor. The customers, all 6000 of them, were definitely there to praise Infor, not to bury it.

But the real issue for Infor will be to do more than just roll out some great strategies for turning over an historically moribund product set and making these products – and their customers – innovators. The big challenge is to maintain this Inforum buzz, and translate it into new software purchasing, as these strategies evolve and are realized in a sweeping set of new products and some interesting updates to its older product lines.

This is the classic “ability to execute” problem that all ambitious companies ultimately face, and Infor is no exception. The strategies look good, without a doubt, but there’s a broad, churning Rubicon to cross before Infor can say it has fully arrived as a 21st century innovator.

There are three major legs to this new vision that were highlighted at Inforum: ION, the company’s loosely-coupled middleware layer that’s tasked with stitching together the old and the new; SoHo, the company’s new cross-product user experience; and the vertical industry focus that Phillips promised at an analyst event earlier this year. Infor’s challenge is to execute on all three, while keeping the updates flowing to key products like SyteLine, Hansen, LN, and S3, among others.

Not surprisingly, keeping the updates flowing to the core products is the easy part. Many of these products, like SyteLine, have a strong product management team that’s been with the product for ages and understands what the customers and partners want and need to keep thing moving forward. I sat in on a couple of update sessions for these products and was impressed with how Infor is moving its core forward.

Infor is also progressing on its new products, of which ION is perhaps the most important, but that progress is tempered by the huge challenge that Infor faces with respect to executing on the ION vision. The challenge with ION is two-fold. The first is to sell ION as a concept that customers can bank on, and in the process make ION the go-to technology for application integration inside the Infor customer base. The second is to keep the customers interested and excited as ION moves through its early teething phases and acquires the robustness necessary to make the dream come true.

Both are always harder than they seem to be. The trick for Infor is to avoid the mistakes that Infor CEO Charles Phillips’ former company, Oracle, made with its Application Integration Architecture (AIA). Faced with a similar problem – the need to provide business process and technology innovation spanning multiple product lines – Oracle came up with an extremely top-heavy, master-data centric approach that required customers to build and maintain a canonical data model, inside AIA, that would make AIA the hub of process and application integration.

To make a long disaster story short, AIA collapsed under its own complexity (along with some other problems that have contributed to the lag Oracle is now experiencing in its software business), and Oracle’s customers went back to building and maintaining application and process integration the hard way: hardwired and peer to peer, and guaranteed to require lots of attention and maintenance as the applications that were hardwired together evolve. Vision: a solid A, ability to execute: a solid E.

This is exactly the fate that Phillips is trying to avoid with ION, while adding some very interesting capabilities. ION promises Infor customers a library of business objects (BODs) that can be used to integrate any of the dozens of Infor products to one another as well integrating third party apps like SAP or Salesforce.com and middleware like WebSphere. The goal, of course, is to make the BODs largely immutable, such that when any of the applications change, ION provides a valuable form of upgrade insurance that makes rewiring the connections between applications unnecessary.

ION has an added functionality that I find impressive: When ION is run in federated mode, all the data in the business objects that flows through ION can be used to populate what Infor calls its Business Vault, essentially a data mart that can in turn feed BI and analytics apps with operational data. With Business Vault able to capture all the cross-application and process data, this becomes a great way to run BI and analytics without touching the operational systems.

This ability to provide upgrade-proof integration and reporting is extremely compelling, but of course it comes with some execution challenges. First and foremost is the need for lots and lots of connectors and business object documents, or BODs. While the number of integration points in any cross-application process are usually limited, the sheer number of potential processes, when combined with the number of applications – Infor and non-Infor – that customers would want to integrate, makes for an interesting combinatorial challenge.

Staying ahead of that challenge is a non-trivial exercise, and essential to the execution side of the ION opportunity. Customers who sign on to the theory of ION will expect to see the BODs they need when they need them, and Infor will have to deliver and/or manage expectations about how long it will take to flesh out the BOD library.

Or else: customers that need integration – and can’t wait – will be building point to point integrations as a stop-gap measure. SyteLine customers, for example, who upgrade to the latest version will have to do that today. And the lack of future-proofing inherent in that model will make it hard for Infor to leverage the kind of cross-product business process integration – adding its enterprise asset management or warehouse management products to an existing application like SyteLine or LN – that is core to the new Infor Phillips is trying to create.

It’s a race – keeping customers interested and excited as the BOD library builds to a critical mass – that Infor can ill-afford to lose. Which makes ION an important bellwether for the overall success of the new Infor.

SoHo, the new cross-platform user experience that Infor is promoting, is another must-win capability that needs to succeed as quickly as possible in order to keep the dream alive. SoHo has three main components, in addition to a new look and feel for all of Infor’s core applications: Ming.le, the company’s social/collaborative software; Motion, its mobile platform; and its BI/analytics platform.

Ming.le is perhaps the most ambitious, and it has a basic design criteria that is near and dear to my heart – the promise of injecting business context into social collaboration, and vice versa. Ming.le demos this capability better than most social collaboration tools that aspire to be business process aware, and it definitely promises to make social collaboration an intuitive part of most standard business processes.

But Ming.le has some teething pains of its own to overcome. The first is ION, on which Ming.le is highly dependent. Customers that want Ming.le first have to implement ION, and that means that ION has to be up to stuff when it comes to integrating the applications and processes that customers want Ming.le to use. Customers also have to do some separate programming in JSON to make Ming.le work: This is particularly essential when it comes to the ability to “drill back” from a Ming.le alert or notification to the actual application where the content that needs taking care of originates – that all-essential business context that makes Ming.le more than just a tabula rasa activity screen.

While the design goals for Ming.le are spot on, there are serious limits to what it can do today or in the near term. Right now Ming.le can’t support non-Infor applications, nor can it support other social collaboration platforms. And some key capabilities for social collaboration, like universal communications and presence detection, won’t be available when Ming.le first goes GA at the end of May. Again, a great strategy and some great plans that have to somehow be enough to keep the customers interested and still loyal to the Infor brand as they plan their social/collaboration strategies.

The third leg of the stool is the micro-vertical strategy, which is also highly differentiating and will also be a major execution challenge for the company. Infor boasts 1700 partners, including 200 focused on ION, but it’s clear that the combination of direct sales staff and channel partners needed to cover 21 micro-verticals is going to need to be seriously expanded. Infor is building a specialized sales team targeting its top 150 accounts, and it’s building stronger ties to global systems integrators in addition to the smaller and more regionally resellers channel. But right now the company has a total of less than 1000 sales reps, and that’s a relatively small number for a company with such big ambitions.

Some of Infor’s ways of tackling these micro-verticals are excellent – the company announced plans for what it calls the Dealer Cloud – powered in part by ION and Ming.le – that will provide a cloud-based network for equipment dealers, OEMs, and their customers. It’s a great idea, and one that could help Infor nail down a key market or two, with the attendant execution problems noted above.

But managing the partner network needed to make Infor’s vision work across this many industries and the globe (42% of the company’s revenue comes from outside the U.S.) is going to be another key bellwether in the journey from vision to execution. Having watched Microsoft Dynamics continually fine-tune its partner network – most of which, like Infor’s, were legacy partners inherited through acquisition – the best thing to say is that Infor has its work cut out for it. Doing this in 21 micro-verticals just makes it all the more daunting a task.

If this assessment looks more “glass half-empty” than “glass half-full”, let me correct that impression. I think Phillips has a great team, a great strategy, and some eager customers. While there are a lot of key challenges, as noted above, it’s those customers who give me hope that this combination of team and strategy could ultimately work.

It’s fair to say that the 6000 customers in Orlando were probably the vanguard of the Infor customer base, and my read on that crowd is that they are much more hungry for new products and innovations than they have been traditionally given credit for.

What many have thought of as a dinosaur burial ground is actually looking pretty lively in terms of the expectations of customers for innovation from their vendor. Many of these customers are sitting on older versions of their Infor products that are either so old or so heavily customized that they will effectively need to re-implement in order to move into the 21st century. Until Phillips showed up, re-implementing meant leaving the Infor fold and hooking up with a Microsoft Dynamics, SAP or Oracle. Now these customers have an opportunity to re-implement without leaving Infor behind. Based on what I saw at Inforum, the customers are prepared to at least give Infor a second look.

The trick will be to turn that second look into a buying decision in favor of Infor. Incumbency has its own ROI, I’ve learned in my years of watching the enterprise software market, and Infor obviously has the incumbents’ advantage in its own customer base. If it can leverage that advantage, and keep adding new customers — Infor reported 3000 new customers in the last year – then this will be one of the great comeback stories in enterprise software. And one well worth waiting for.