Just before I had flown up to New York for the Infor Innovation Summit, I had interviewed Malcolm Frank, EVP of Strategy at Cognizant about trends he is seeing in the outsourcing and software markets. Malcolm talked about what he had heard from customers at Davos, the digital transformation and design thinking trends in the market, his firm’s network of “Collaboratories” (where they help conduct design workshops in innovative settings).
So, I had to keep pinching myself at the Infor event I was not continuing my conversation with Malcolm. Hook and Loop, Infor's captive digital agency, presented example after example where they are helping customers rethink their changing markets and value propositions (like the farm example below - they used masked customer names). Infor also walked us through their version of “Collaboratory” – their Garage (pictured above) where they help customers think new design.
There were several industry sessions like how Infor is helping retail/grocery customers like Whole Foods rethink merchandising, an area most have not touched in decades even as the sector has zoomed ahead. Another on changing commerce networks (broad ones to include financial institutions and logistics providers – the 80% of information which lives outside most ERP systems). Others on asset management in various public sector settings (like airports).
Over the course of the two days, there were plenty of other services related presentations and discussions – Value Engineering as legacy customers look for payback for moving to Infor’s cloud solutions, Infor’s automation of use of the Amazon cloud infrastructure with services like Lambda, DynamoDB and others, Infor Dynamic Science Labs with their data wizards, their own ERP implementation services and outsourcing partner ecosystem.
The natural question many analysts had was is Infor now a services company now? Yes and no. No because it has plenty of legacy customers from the many acquisitions it has made over the decades. No, because it is selling plenty of cloud software solutions (claims 58 million users and 8 petabytes in the cloud), and even with its heavy industry focus, took time to update us on their new financial modules (CEO Charles Phillips proudly called it the first new financial suite in the industry in a decade in a gentle poke that Workday is no longer the new kid on the block).
Yes, it is a services company because the industry is in transition. Cindy Jutras astutely observed in a q&a with Infor executives and later blogged about it
“In a way it felt like déjà vu all over again. These “custom” projects were reminiscent of the homegrown apps of the 70’s and 80’s. Nobody believed you could have pre-packaged apps back then. Companies believed themselves to be unique and therefore built their own applications.”
The big difference now is these days you can hire an outsourcer or build these new apps yourself. And you have another option - you can bring in Infor which will give you early mover advantage and the cost leverage as it spreads the functionality around your industry, and run it at scale and using the efficiencies of the Amazon infrastructure, and that of its other business network and its service partners.
During our conversation, Malcolm had commented how services and software companies have always looked at each other in envy. Software executives hate their quarter end flurry of contracts and envy the multi-year outsourcing contract model. Services executives envy the valuations IP based businesses get. Well, they don’t have to envy each other. Their markets are converging.
Yes, Toto, I've a feeling we're not in Kansas anymore.