Infor appoints Oracle’s acquisition mastermind

Acquisition is one of the most important weapons in an enterprise software company’s arsenal, and they wield it often. Oracle, possibly the industry’s most acquisitive company, has spent around $35 billion buying other vendors since 2005.

Infor, the mid-market enterprise resource planning applications vendor, is one of the few companies with a comparable acquisition habit. In just eight years, the private equity-backed company has accumulated countless software vendors including Softbrands, SSA Global and GEAC, and in so doing grown annual revenues to over $2 billion and amassed more than 70,000 customers.

In October 2010 Infor appointed Charles Phillips, the man many see as Oracle’s acquisition mastermind, as its new CEO, and the appointment makes good sense given its business model.

It was shortly after Phillips joined Oracle in 2003 (having been Wall Street’s most successful enterprise software analyst) that the company launched its controversial bid to buy PeopleSoft, a deal that began the spending spree that is still ongoing today.

Phillips was executing acquisitions right up to his departure. “Charles approached me last December and expressed his desire to transition out of the company,” said Oracle CEO Larry Ellison at the time, “[but] I asked him to stay on through the Sun [Microsystems] integration.”

His appointment implies that acquisition is still very much part of Infor’s strategy, despite the fact that the frequency of its deals has slowed recently. This is ironic says Bruce Richardson, Infor’s chief strategy officer and former AMR Research analyst, as “there are more companies up for sale now than there were in the whole time that I was an analyst”.

Although the acquisition strategy has seen Infor become an industry giant in less than a decade, it has not all been plain sailing, Richardson explains. For one thing, not all the companies that Infor acquired had the best relationship with their customers, he says: “There have been some cases where the company we bought did some crazy things that weren’t in the best interests of their customers. We’ve spent a large part of the last few years re-engaging with those customers.”

Secondly, the best way to integrate the applications it has acquired has not always been obvious. In 2007, the company launched an ambitious plan to bake service-oriented architecture (SOA) technology into every application it sold. The hope was that this would improve interoperability, and therefore increase cross-selling opportunities. Richardson, who joined the company in January 2010, believes that plan was too ambitious. “Our former chief technology officer wanted to create all of his own middleware, and that didn’t really make any sense,” he says.

The company’s new integration strategy is rather simpler. In July 2010, it announced the decision to move all its applications onto Microsoft’s technology platform. Among other advantages, this has allowed it to create a consistent user interface across all its applications using Microsoft’s SharePoint content management software, Richardson says: “The products now look like they all came from the same manufacturer. I can’t hide the fact that this was an issue [before].”

Infor’s partnership with Microsoft creates yet another of the IT industry’s trademark ‘co-opetition’ relationships, as Microsoft’s Dynamics business applications compete with Infor’s. “You always have to be wary of dancing with someone that’s much larger than you and that has a play within your space,” says Richardson. “But the relationship has been building for at least a year, and things are pretty cooperative.”

Still, it will be interesting to see how an alumnus of Oracle, a company that has recently made a habit of turning partners into adversaries, manages such an incongruous relationship.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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