One of the reasons why Infor, despite its over 70,000 large customer base, hasn’t been regarded as a serious enterprise applications contender has been the company’s spotty relationship with its channel partners. Partners currently contribute only about 25 percent of Infor’s license revenue (except for Latin America, where that ratio is 50 percent).
Infor as we know today is the result of a plethora of acquisitions, whereby some acquired companies had partner-oriented cultures (e.g., former Lilly Software, Systems Union, or MAPICS), but many more acquisitions were companies with a primarily direct sales approach and culture. A few years back, I was made aware of some Infor partners’ displeasure with the vendor’s ambivalent approach to its channel, and many former Lilly Software partners in North America have since jumped ship and begun to represent enterprise resource planning (ERP) products from, say, Microsoft Dynamics, SAP, IFS, etc.
Indeed, without compelling incentives, selling tools, training materials, etc., why should a value-added reseller (VAR) sign up with Infor? Microsoft, Sage, Oracle, salesforce.com, NetSuite, and SAP would be preferable choices in light of their brand name recognition, attractive programs, and extensive advertising. For more information on Sage’s Partner Advantage Program, see my recent blog post, while for the Oracle Accelerate program details (as part of the Oracle Partner Network [OPN]) you can see another previous blog post.
Out with the Old, In with the New (Practices)
The biggest mistake that vendors, even those that are supposedly partner-oriented, make toward their resellers is that they might create bright shiny partner programs, but they still tend to forget to align the operating model behind these programs. When vendors’ direct sales teams and channel partners are not tightly aligned, the program inevitably fails due to the vendor’s sales force encroaching on the most promising opportunities and leaving only the crumbs for partners (who are often small fledgling companies yearning for revenues to begin with). For their part, top-performing partners want to be recognized and rewarded for their contribution to the vendor’s top line rather than all being treated in the same manner (blanket regulation).
Thus, I met in April 2011 with Jeff Abbott, vice president, Global Alliances and Channels, Infor, for an in-depth pre-briefing under a non-disclosure agreement (NDA) about the then upcoming Infor Partner Network (IPN). I’ve known Abbott from his days at Oracle’s small and medium business (SMB) division, and I could recognize in the IPN not only some pages taken from Oracle’s OPN book, but also much more than that (i.e., some better practices than in the OPN, plus some additional ideas that I have seen implemented by other vendors with good partner reputations).
The IPN is a global network of people, systems, and services designed to deliver the highest quality support for channel partners. Infor partners are expected to benefit from the program’s highly competitive commission rates, new performance bonuses, a comprehensive training and certification program, and a Market Development Funds (MDF) program geared towards helping partners invest back into their businesses.
It is important to note that IPN is not only about these program elements (MDF, training, enablement, etc.), but Infor is also reinventing its global sales coverage model and the rules of engagement at the same time. This should give partners confidence that Infor is backing up its channel program with the commitment to channel-friendly sales policies, for the channel to grow rapidly.
What I Really Like about IPN
The IPN was officially announced on June 8, 2011, thus ending the aforementioned “gag order” for analysts. An excerpt from the company’s official non-verbose press release (PR) said that the IPN would provide Infor Channel Partners worldwide the tools, resources, and financial incentives to help them rapidly grow a profitable and sustainable business around Infor products. Partners will have access to resources at every stage of the sales cycle - from planning and enablement through demand generation, sales, delivery, and support. Cindy Jutras of the Mint Jutras blog was quick to report the event in her blog post.
The following novel aspects of the program are worth noting (being in contrast to many competitors who have essentially had the invariably rigid program model for many years, if not since their inception):
The Infor IPN program is additionally significant because it finally brings a number of quite different partner programs from previous acquisitions under one global framework. The standard and go-forward model for partner relationships in the IPN is that the partners conduct the sales cycle and introduce Infor’s solutions to the customer. Once the customer’s contract is negotiated by the partner, it will engage Infor to sign the contract directly. The accountability value proposition here is believed to be twofold as follows:
While all Infor products, geographies (77 countries), verticals, and over 700 partners are under a single program, there are the following logical product groupings under the program:
What Still Remains to Be Seen?
The IPN does not currently include similar programs for independent software vendors (ISVs) and their intellectual property (IP) offerings (e.g., a Solution Finder or an Application Exchange offering). Neither are Infor cloud-based offerings (i.e., Infor24) covered at this stage, and I was told to stay tuned for IPN 2.0.
In the past Infor has not had a touchy-feely approach towards ISVs, to put it mildly. If an ISV had any decent product and size, Infor might just have bought the company in the best-case scenario. Thus, I am keen on seeing how Abbott will attempt to reset the Infor-ISV relationship in a win-win manner.
On another issue, one needs cloud computing applications to have cloud VARs. Infor has its Expense Management, Syteline ERP, and EAM products in the cloud (see my recent article on the Infor24 portfolio for more information). Most of these products have small customer bases and small channels with no critical mass yet. The products with critical mass are ironically dominated by Infor’s direct sales, and they will naturally try to keep partners out of their fiefdoms.
Through the IPN program and innovative product developments such as the Infor ION technology framework and the snazzy Infor Workspace user interface (UI), Infor believes that its partners are armed with superior products and support to help them win deals and grow their revenue. But these novel tools will work well for, say, Infor FMS SunSystems, Infor ERP SyteLine, Infor PM, or Infor EAM resellers that are mostly certified on newer product releases. Alternatively, I could imagine brand new VAR’s signing up for these products. For more info on the attractive Infor FMS SunSystems offering, see TEC’s recent article.
Old Habits Not Easy to Break From?
The fact is that most Infor partners are product-specific and they benefit somewhat by keeping customers on older product releases and/or non-strategic products. If Infor tries to push its strategic ION, PM, EAM, or the Sales and Operations Planning (S&OP) products (see TEC’s article on the brand new Infor S&OP offering), these partners are likely not yet “plumbed” for these modern products. Additionally, the customer has to buy more infrastructure tools and its IT staff needs additional training on new technologies.
Indeed, for VAR’s of less technically advanced products, e.g., Infor ERP XA or Infor ERP Visual, moving to the Infor ION framework or new add-on solutions is a risk to their services revenue. Since many of VAR’s employees have over 20 years of experience with their legacy product, they have some job security this way. On the other hand, even if the VAR is willing to adopt new tools, the time to teach these “old dogs” new tricks will reduce their billing rates, and thus increase a VAR’s expenses and reduce profitability for Infor.
Infor’s Abbott has set a goal to double Infor’s channel revenue over the next three years and the IPN is a key enabler of that aggressive growth. The goal is to recruit over 300 new channel partners. Without products with large critical mass and that VARs can cost effectively take on, Infor will still likely have a large number of small resellers.
Former Infor CEO Jim Schaper once said that 80 percent of partner sales were less than US$5,000 per deal. If this is still true, how many deals and new VARs are required for Infor to grow, say, by 20 percent? With competition from all the other vendors and in this sluggish economy, this bold endeavor might be a tall order.
Dear readers, what are your views, comments, opinions, etc. about the IPN and Infor’s revised partner strategy? Does it represent thought leadership and truly a positive step forward? Or a “me too” catch-up strategy? If you are an existing Infor partner (or VAR considering Infor), do you now have more or fewer reasons to stay with the vendor (or join the camp for the prospects)?
We are an Infor Channel Partner in the US focused on the Infor ERP LN product, which was not even mentioned in your article. That’s OK - Infor rarely mentions it either, even though it’s been touted as central to their strategy going forward. If you’re not familiar, LN is essentially the latest iteration of Baan - which back in the 90’s was number 2 in the market behind SAP.
LN has traditionally been focused on larger companies, such as Boeing and Snap-on Tools. I believe that’s why the channel has traditionally been excluded from selling LN software. Because Syteline and to a lesser extent Visual have been front and center for Infor, and LN was acquired, it’s very difficult to break into the market with LN. Also, we need a services pipeline to have a healthy business. Infor largely controls that action, and the relationship between the channel can be - at times - tenuous.
We’re trying to stay positive about the debut of the IPN and the efforts of Jeff Abbott. Although we see progress, we remain guarded about the future of LN in the channel. Hopefully the upcoming Infor Channel Partner Summit in FL will provide some clues about how the IPN could change things.
Thanks for your insight, Dan. I, personally, was a Baan consultant in the 1990s, and I know very well of LN’s lineage :-)
I did mention that ALL Infor products and geographies are, at least theoretically, part of IPN, which meant LN too. I’ve heard that LN has lately been one of the best performers at Infor in terms of new license revenues, and the product has been quite modernized (on top of its traditionally strong functionality, especially for complex ETO manufacturing). Thus, I could imagine the product being an attractive option for new VARs as well as for Infor to treat its VARs better than in the past.