Infor has accomplished much recently in terms of laying the foundation for and developing a product portfolio that meets the needs of customers old and new, as well as those inherited from the vendor's recent acquisitions. Behind Infor's success lies its open SOA strategy, based on the Software Fortress Model (please see part two of this series, Ambitious Plans and Promises: An Enterprise Software Vendor's Course of Action ). For a general overview on Infor's recent developments, please see part one of this series, Ambitious Plans and Promises: An Enterprise Software Provider Keeps Its Word.
While skepticism is understandable from some—especially the over-promised and disillusioned Baan customers, as well as some market observers—most of the market should actually be pleased to hear what Infor is pledging. "Doubtful Thomases" might question whether the former SSA Global, MAPICS, etc. were really killing these products and if Infor is just making itself look good by paying lip service to the promise of improvements. Certainly, only time will tell whether Infor will make good on these promises, or if it will just repeat the sins of the solutions' predecessors.
To be sure, this decision does not come from the goodness of Infor's heart. Rather, it is based on sound economic (i.e., the great revenue potential from the several thousand existing Baan IV and V customers worldwide) and strategic reasons (i.e., Infor envisions Baan and LN as "platform" rather than "mature" enterprise resource planning (ERP) products, having viable future road maps, including SOA bus and enhancements), as well as to create goodwill (press relations).
At first, Infor may have been tempted to enable migrations to Infor ERP LN 6.1, but it is likely the vendor has realized that the migration paths for Baan IV and V customers, their systems significantly customized, would be prohibitive and daunting. Possibly then, it is more feasible and justifiable to keep all three product releases on their own SOA-enablement and functional enhancements paths. Sure, the research and development (R&D) cost for Infor will increase to a degree (given their monolithic structures, Baan IV, V, and LN will have to be divided into separate fortresses), but that is certainly a lesser price to pay than losing those customers outright to the competition.
Therefore, given three different product road maps, the details are currently sketchy about what customers can hope for in terms of functionality, as well as how useful these products will be in light of some customers having modified the product to a level where it is hardly recognizable.
In any case, if Infor will indeed be adding features, that can only be good. There have been broad indications of enhancements being made to financial management, supplier relationship management (SRM), human capital management (HCM), servicing, warehousing, and manufacturing functions. Moreover, this might even be more about Infor Open SOA and Infor's need to cross sell products to these customers, since Infor's revenue model is based on keeping the maintenance stream going and cross selling products. To that end, via the Open SOA approach, Infor will likely offer the Baan install base extended-ERP systems from other Infor point solutions, particularly in the areas of corporate performance management (CPM)/analytics, supply chain management, (SCM), business-to-consumer (B2C) and business-to-business (B2B) e-commerce capabilities, mobile applications, and so on.
Some skeptics may also point out that the initial additions planned for Baan IV and V are mostly what we would call regular upgrades and extensions. However, for those Baan users whose product instance is not that badly modified, the price of becoming compliant and up-to-date on their own (i.e., using their own regulatory and IT experts) might be much higher than the price of being reinstated into the service and maintenance contract (see What Is the Value Proposition of Support and Maintenance?).
Further, the details on IBM's current Baan and LN capabilities and its success in reselling these Infor products are also sketchy at this time, and we will have to wait and see if the two companies actually sell some of these solutions. IBM used to be a major Baan implementer in the 1990s, but like almost all other leading systems integrators (SIs), it has since all but disbanded the Baan practice. These experts have moved on to implementing other ERP products, and it is questionable how easily one can ramp up the competencies of Baan and LN once again.
Furthermore, IBM resells many mutually competing enterprise applications products; while the total number of deals for IBM is certainly significant, deals for each individual ERP vendor are very rare. Yet, vendors like Infor or Lawson Software like the fact that IBM resells their product, due to the added credibility IBM's name gives these products in the marketplace, but it is questionable how much revenues they can actually expect.
In any case, while skepticism is understandable in light of the past, the fact is that 22 percent of Infor's employees (about 2,400) work in the R&D department. Looking at this from another angle, Infor's R&D expense last year was about $400 million (USD), which represents 18 percent of its total revenues—an amount significantly higher than the software industry's average of 14 percent. Such numbers are indications of a vendor that "means business" and that wants to be in for the long haul—and the vendor certainly has no illusions that this will be a "cakewalk" (easy).
While skepticism is understandable from some—especially the over-promised and disillusioned Baan customers, as well as some market observers—most of the market should actually be pleased to hear what Infor is pledging. "Doubtful Thomases" might question whether the former SSA Global, MAPICS, etc. were really killing these products and if Infor is just making itself look good by paying lip service to the promise of improvements. Certainly, only time will tell whether Infor will make good on these promises, or if it will just repeat the sins of the solutions' predecessors.
To be sure, this decision does not come from the goodness of Infor's heart. Rather, it is based on sound economic (i.e., the great revenue potential from the several thousand existing Baan IV and V customers worldwide) and strategic reasons (i.e., Infor envisions Baan and LN as "platform" rather than "mature" enterprise resource planning (ERP) products, having viable future road maps, including SOA bus and enhancements), as well as to create goodwill (press relations).
At first, Infor may have been tempted to enable migrations to Infor ERP LN 6.1, but it is likely the vendor has realized that the migration paths for Baan IV and V customers, their systems significantly customized, would be prohibitive and daunting. Possibly then, it is more feasible and justifiable to keep all three product releases on their own SOA-enablement and functional enhancements paths. Sure, the research and development (R&D) cost for Infor will increase to a degree (given their monolithic structures, Baan IV, V, and LN will have to be divided into separate fortresses), but that is certainly a lesser price to pay than losing those customers outright to the competition.
Therefore, given three different product road maps, the details are currently sketchy about what customers can hope for in terms of functionality, as well as how useful these products will be in light of some customers having modified the product to a level where it is hardly recognizable.
In any case, if Infor will indeed be adding features, that can only be good. There have been broad indications of enhancements being made to financial management, supplier relationship management (SRM), human capital management (HCM), servicing, warehousing, and manufacturing functions. Moreover, this might even be more about Infor Open SOA and Infor's need to cross sell products to these customers, since Infor's revenue model is based on keeping the maintenance stream going and cross selling products. To that end, via the Open SOA approach, Infor will likely offer the Baan install base extended-ERP systems from other Infor point solutions, particularly in the areas of corporate performance management (CPM)/analytics, supply chain management, (SCM), business-to-consumer (B2C) and business-to-business (B2B) e-commerce capabilities, mobile applications, and so on.
Some skeptics may also point out that the initial additions planned for Baan IV and V are mostly what we would call regular upgrades and extensions. However, for those Baan users whose product instance is not that badly modified, the price of becoming compliant and up-to-date on their own (i.e., using their own regulatory and IT experts) might be much higher than the price of being reinstated into the service and maintenance contract (see What Is the Value Proposition of Support and Maintenance?).
Further, the details on IBM's current Baan and LN capabilities and its success in reselling these Infor products are also sketchy at this time, and we will have to wait and see if the two companies actually sell some of these solutions. IBM used to be a major Baan implementer in the 1990s, but like almost all other leading systems integrators (SIs), it has since all but disbanded the Baan practice. These experts have moved on to implementing other ERP products, and it is questionable how easily one can ramp up the competencies of Baan and LN once again.
Furthermore, IBM resells many mutually competing enterprise applications products; while the total number of deals for IBM is certainly significant, deals for each individual ERP vendor are very rare. Yet, vendors like Infor or Lawson Software like the fact that IBM resells their product, due to the added credibility IBM's name gives these products in the marketplace, but it is questionable how much revenues they can actually expect.
In any case, while skepticism is understandable in light of the past, the fact is that 22 percent of Infor's employees (about 2,400) work in the R&D department. Looking at this from another angle, Infor's R&D expense last year was about $400 million (USD), which represents 18 percent of its total revenues—an amount significantly higher than the software industry's average of 14 percent. Such numbers are indications of a vendor that "means business" and that wants to be in for the long haul—and the vendor certainly has no illusions that this will be a "cakewalk" (easy).
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