Adopting more service-orientated architecture (SOA) products are just some ways business software vendor, Infor, is trying to achieve its goals this year despite stiff competition from SAP and Oracle. Senior vice-present for global strategy, Rick Parker, met up with JULIA TALEVSKI to discuss what role the channel has to play in Infor’s plans, the significance of SOA and how the market is shaping up.
How does the channel fit into Info’s strategy?
Rick Parker (RP): We use channel partners in multiple ways. We use them in small markets across parts of Europe and we also use channel partners in certain vertical areas and definitely for selling into smaller companies. For example, in the US anything under $US100 million would go through the channel, it’s a very big part of our business. Globally about 25 per cent of our licence sales are through the channel, in the Asia- Pacific it’s about 40 per cent.
We’ve grown very quickly through acquisitions and we’ve been very fortunate in acquiring some great partners because it’s very hard to build a channel these days. We’re definitely driving to get more channel partners, our focus is not on quantity. We go for partners that have a strong business model and have sustained themselves. A lot of our sales are into mid-market companies. We are very interested in partners that know the customer’s business and can help them install products quickly and achieve total lower cost of ownership. You mentioned 25 per cent of global business was indirect, are there any plans to further increase that? RP: In certain markets, we would like to increase our channel presence. We treat our channel partners almost as if they’re employees. They receive all the sales training that our sales force does, they’ve got all the access to the tools and competitive information that our sales force has.
What are some of the trends you’re witnessing in the software market?
RP: In general, we’ve seen a trend that the really large multimillion-dollar software deals have to go up to boards of directors to be approved. They’ve slowed down, there’s no question about it, and the approvals are getting a lot tougher. This has been true in past downturns – when a market goes down, sales decline, but not as much as other markets do like retail.
What’s your take on market sentiment at the moment?
RP: There’s definitely caution out there. I think buyers are going be very oriented on return on investment. If you’re trying to justify a project inside your company, you’re going to have to really be able to describe the ROI. Any project that has to do with cost cutting can move very quickly right now and that’s one of the reasons why some ERP and enterprise software projects can continue to move forward. Like everyone else, we’re cautiously optimistic.
How does the Australian market compare on a global scale?
RP: The Australian market is very similar to other parts of the world. an advanced economy. From talking to some of the sales reps, in the economic downturn it appears that it has not been hit as hard as the US and Europe. I think from an economic standpoint it’s in better shape.
What sets Infor apart from its competition such as SAP and Oracle?
RP: We’ve acquired a lot of software that’s purpose built and tailored to the industries we serve. It has a lower total cost of ownership and it’s the way our customers tend to think about buying software. We’ve seen SAP and Oracle spending a significant amount of time trying to take their larger products and configure them to somehow fit into the mid-market and try to aggressively build channels. In some cases, I think they struggle to address this market place. We feel we’re in a strong position. Our task is that we need to continue to keep our edge in the lower total cost of ownership.
What will your product roadmap look like in the next few months?
RP: We have a significant investment in service-oriented architecture (SOA) products and are continuing to advance all our products on the front. We have over 30 components, with different types of enterprise capabilities that we’re releasing and we have schedule that runs out until 2011, which is very aggressive. One of the things about SOA is that it’s good for the channel – some have very strong professional services groups, and it’s important to their economic model. In the past, if a customer wanted to extend a product they’d customise it to their business, which is done 100 per cent with ERP products. SOA provides a way where they can extend it as a component. That’s important because the next time we want to release an updated version of that software, it can still work through SOA, whereas in the past those links would break.
The important thing about SOA to our customers is we allow them to keep the software they have in place. They don’t want to have to rip and replace their software because they want to leverage it as long as they can.
Last year, Infor announced it was cutting 5 per cent of its global staff. Are there any more changes to the organisation to come?
RP: There’s nothing significant. We think we’ve done what we’ve needed to do. We cut about five per cent and were open about it. It was the same timeframe our competitors announced about 10 per cent cuts. This is an economy where you can’t be too sure, but in this quarter we are moving according to plan.
Are there any acquisitions on the cards?
RP: We always have a list of acquisitions we’re looking at and we’ve done enough at this point in time. There are some companies that are in tough financial shape, but because there are so many companies in tough financial shape, investors have not been that hard on them yet. We would definitely continue to acquire companies and we have strong financial resources behind us. An advantage of being a private company is the ability to move agilely when it comes to acquisitions. We remain in that condition and are definitely interested in continuing to expand in the markets we’re in.