Infor has revealed ambitious plans to steer its indirect sales channel into the cloud.
The software vendor says it has been busy transforming its business over the past 18 months, and now it wants its channel partners to replicate the model.
Speaking at its EMEA Partner Summit last week, Infor president Stephan Scholl said that in nine months’ time, cloud will account for 50 percent of the vendor’s direct sales – and while acknowledging that the channel’s traditional perpetual licensing business is still generating double digit growth, he urged partners to start offering the firm’s software applications in the cloud.
“The channel business is growing at double digit rates so it’s not like this is a fearmongering conversation; that you have to shift immediately. There is still a healthy pipeline, you’re still driving a tremendous amount of perpetual business. But at some point in time, your customers are going to become more aggressive with you and us,” says Scholl.
“It’s not about changing overnight; it’s not about taking something that works and trashing it. The perpetual business isn’t going anyway, neither are our channel partners,” explains Peter Stanley, Infor’s vice president of European partner sales.
Stanley advises partners to start by putting their customers’ non-mission-critical applications in the cloud.
“If you take a baby step that’s not about ripping out someone’s entire manufacturing infrastructure, but bringing in some HR tools or some expense management tools or some business analysis tools in the cloud, then it becomes a lot more comfortable. But if you don’t start, you’ll never go on that journey.”
“We’re not expecting you to convert your business overnight, but we do believe there are incremental areas of your business that you can grow and use cloud to leverage that,” adds Lisa Pope, SVP, global strategy and sales for Infor’s CloudSuite.
After road testing a new cloud compensation model internally for the past 12 months, the vendor has now opened it up to channel partners. It reduces payment to partners for the first year of a deal, but increases it from year two onwards.
“Customers want five, ten year relationships with you and this is a great way to build consistency, predictability in your business,” Scholl told partners.
“This announcement is a direct acknowledgement from Stephan and the senior executive team that they understand that in order for the economic model for partners to be more exciting there has to be a bigger part of the revenue stream on a recurring basis,” says Jeff Abbott, GM of Infor’s global channel business unit.
Unofficial figures put around a quarter of Infor’s worldwide sales through the channel.
Chris Stock, managing director of Infor’s new manufacturing partner of the year, Inforlogic, thinks the new compensation model is great news for partners. “The ongoing annuity revenue allows us to build value in our business,” he tells Channel Pro, adding it was also encouraging to hear Abbott stress how important the channel ecosystem is to the firm.
“We are key to their cloud growth plans and its organisations like Inforlogic that can provide the value add to the customer with our experience. We are currently about to roll out in conjunction with Infor our cloud deployment methodology.”
New financials system to launch
Scholl also revealed the firm is planning on taking on Oracle, SAP and pure cloud vendors like NetSuite, with a “next generation financials” solution scheduled for launch in 2016.
“When we the last time financials was re-written? We’re spending an absolute fortune of our money on building the next suite of financial applications,” says the exec. “We are throwing hundreds of people, hundreds of millions of dollars at it and we’re 10 months away from launching next generation financials, which to us, is a multi-billion dollar opportunity.”
He adds: “Our company has a tremendous amount of cash flow; we’re staying private for a reason. We’re overspending on product right now because we can.”
