Midmarket applications vendor Infor Global Solutions sees challenges for companies like SAP and Oracle to adapt their enterprise software products for small and medium-size business.
Earlier this month, SAP announced plans to establish a dedicated SMB unit and expand the company's footprint in the huge midmarket, a move that Infor Chairman and Chief Executive Officer (CEO) Jim Schaper thinks is easier said than done.
In an interview with IDG News Service, Schaper talked about Infor, a relatively young provider of business applications that has grown through acquisitions and now generates more than US$2 billion in annual sales, and discusses growth markets and competition with SAP, Oracle and Microsoft. The following is an edited transcript.
The midmarket means different things to different people. How do you define it?
Midmarket customers are typically independent businesses that range in revenue from US$25 million to US$2 billion. We believe that somewhere between 60,000 and 62,000 customers of our total 70,000 customer base are in the midmarket. If we compare that with SAP, which estimates that 65 percent of their 36,000 customers are SMBs or little more 23,000, we are clearly twice the size of SAP in the midmarket.
How large is the market you're going after?
Our market is globally 1 million prospective customers, including the plants and divisions of large enterprises.
Why do you include these?
A number of very large global enterprises run our applications on a decentralized plant or division basis. That's why, for Infor, a classical view of an SMB definition doesn't work.
Why should a midmarket company choose Infor and not SAP or Oracle, which have substantial expertise in business software and have stepped up efforts to target SMBs?
We fill a hole in the market. We have maximized on what smaller niche providers provide -- namely business-specific solutions with domain expertise to implement them -- and on what the large players have to offer: global distribution. We provide our customers with global reach, alternative channels and products built for their markets at the lowest total cost of ownership.
SAP would argue that it also offers products with deep industry-specific functionality. Would you disagree?
If they're digging down deep, then they've just started because that hasn't been their business model in past. They said they will do this primarily through partners.
SAP does offer different versions of its software for different markets. Could this provide a competitive edge?
They've attempted to take a tier 1 product and move it down market. You don't leave the complexity of the product behind, or the cost or length of time it takes to implement.