This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.
The software industry is relatively young and there are few John Deeres which have revised its logo every few decades. So when I saw Infor go through a rebranding exercise I invited its Chief Marketing Officer, Chip Coyle to describe the project.
“This past fall, Infor embarked on the most significant corporate rebranding in our history. The decision to rebrand was straightforward. The question was how. What does a rebrand entail? And why now?
Up to now, Infor has mostly been known as a collection of business applications specialized for specific industries – successful and mature products with loyal customer bases. “Infor” however had very little brand recognition. The arrival of Charles Phillips (who contributed a guest column here) and a new senior leadership team in late 2010 set in motion a major transformation of the company, bringing a new energy, a new strategy based on speed, and new and innovative approaches for how the next generation of businesses should work. Central to the new strategy was an increased investment in R&D, to accelerate the delivery of new products to customers. It also fueled a new technology strategy to easily connect and unify our products under one family, Infor10, which launched in 2011.
As the transformation began, a company of more than 13,000 employees now had the feel of a startup.
With the new corporate strategy, and a unified product portfolio now in place that included the integration of Lawson Software, the decision to rebrand was about acknowledging that this was a whole new company. It was now time to share it to the world. The first step was to clearly define what our brand stands for. To do so meant bringing to the forefront some of our most important traits: ‘speed’, ‘flexibility’, and ‘industry specialization’. Recognizing that our expertise in particular niche industries differentiate us from any of our competitors, we deepened our micro-vertical features, and give customers the fastest and most flexible deployment options possible with the same software available on-premise or in the cloud.
Another competence we wanted to highlight was ‘beauty.’ Building upon our leading industry functionality, we believe the next progression in enterprise software is to deliver a user experience that’s meaningful and pleasurable. Focusing on the aesthetics of the experience, the design sensibility becomes a crucial differentiator. A common and seamless user experience that allows business professionals to ‘work the way you live’ embracing familiar collaboration and social business capabilities is a core design principle.
Hook & Loop is our in-house creative agency—not external designers or consultants on our rebrand, but rather a core part of our corporate team. Based in Infor’s New York headquarters, Hook & Loop drives all aspects of our product design and user experience across our entire portfolio. Our corporate brand attributes are in fact a natural extension of our product design. This ensures a corporate identity that is consistent and repeatable.
The launch of our rebrand in late 2012 introduced a new logo which is modern and clean, and a new website offering a more consumer-like feel. But the new Infor is about much more than those surface features. We are gaining further brand recognition with a new global advertising campaign that launched in February. This campaign upholds our important brand attributes, while directly associating Infor with ‘Beautiful and Social Applications’ and ‘Industry Specialization.’
Ultimately a brand is a promise to customers, and a reflection of market perception. This is key, because brand doesn’t end at logo, tagline or website. Consumers can tell the difference between a superficial rebrand and an authentic one. We must deliver on our brand promise, and that means delivering a new generation of software that truly changes the way work is done. Successful branding also depends on creating brand ambassadors to carry the brand forward clearly and consistently. This extends throughout our 13,000 employees around the world, and to all of our constituencies in the market. The new Infor represents our capacity to connect, and that’s a value that drives our brand every day.
I welcome you to learn about the traits described above and the branding exercise here”
Chip can be reached at Chip DOT Coyle AT Infor DOT com
The Real Deal: Matt Haller on the “pinch” when comparing Cloud/On-premise TCO
This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.
This time it is Matt Haller, a Senior Principal at Baker Tilly, who leads the Enterprise Solutions group in its Management Consulting practice. He has been advising clients on strategy and implementing business systems for over 25 years, and has been working with cloud software since 2006.
BTW Click on graphics to enlarge
“We are often asked to build Total Cost of Ownership (TCO) models for companies considering on-premise and cloud business software. It is commonly believed that although the cost of on-premise software is higher in year one, costs are lower in subsequent years. Thus, over time, on-premise software is a lower cost alternative. This hypothesis is understandable; however, often flawed because the cost of software and performance upgrades are not considered properly. Although we call upgrade cost a “pinch”, they can take a huge bite out from the IT budget.
True multi-tenant cloud software brings significant benefit as software performance and infrastructure upgrades are performed by the software vendor as part of the subscription cost. Subscribers automatically receive functional updates, and have the ability to “opt-in” to these new features. As compared to on-premise software, this approach dramatically lowers and even eliminates the cost of upgrades, while minimizing business disruption. With on-premise software, upgrades can be a major event - with many upgrades requiring a full implementation cycle.
Even though upgraded software is included with the annual maintenance payment for on-premise, the upgrade process becomes a costly project, in many cases costing 50% or more of the initial implementation. There are many complexities including testing and re-programming modifications to the core software for compatibility, and making existing hardware, operating system, and database versions function with the upgrade. This cascading dependency becomes even more complex when multiple software products comprise the entire business system. An upgrade to one on-premise software product forces upgrades to multiple on-premise software products and their respective infrastructure components. Costs for upgrades further increase when factoring “soft” costs for the project team and business disruption.
Hosting and off-shore application management services for on-premise software have over time decreased in the cost of on-premise. However, these services lack the economies of scale true multi-tenant vendors bring with the inclusion of these services as part of the subscription.
Why the big TCO difference? Enhancements are simplified when performed by the cloud software vendor, or on a Platform-as-a-Service (PaaS), as the coding is performed on the same development platform using the same set of software code. By using the same platform, enhancements are instantly compatible. If third party software is part of the business system but comes from a cloud vendor’s application ecosystem (e.g. AppExchange), compatibility issues are eliminated. Cascading dependencies for hardware, database, and operating system do not apply to the cloud model.
The proper way to compare on-premise and cloud-based software is to examine cumulative costs and model costs at least 6-10 years. Most companies upgrade software every 3-6 years, and own software for at least 10 years. The on-premise upgrade cost creates major cost spikes in the years the upgrade is performed, (the “pinch” as illustrated in figure 1 above). Cumulative costs actually diverge over time. (figure 2 below) The gap in future years becomes more prominent as modifications, and cascading dependencies grow.
We applied these factors to a $300M automotive manufacturer considering an upgrade to their on-premise ERP software. TCO over 7 years for on-premise was nearly $13M. We found the cloud alternative was 46% less than on-premise, and 35% less than hosting the on-premise software.
When building a TCO model comparing on-premise to cloud software, make sure the model properly factors upgrade cost, and extends far enough into the future. Recognize that hosting is not the same as multi-tenant cloud software. Cloud software typically provides a very compelling value proposition.”
Matt can be reached at Matt dot Haller at Bakertilly dot Com.
August 06, 2012 in Cloud Computing, SaaS, Industry Commentary, The Real Deal: Guest Columnist | Permalink | Comments (0) | TrackBack (0)