EXPERT COMMENTS: NOW IS THE TIME FOR INDUSTRIAL BUSINESSES TO GET ON THE CLOUD
2020 has naturally been a year of turbulence and disruption for virtually every industry. But for cloud service providers, the Covid-19 pandemic has enabled some light amid the darkness.
As companies deployed – or hastily created – their remote working initiatives, Zoom’s usage, and value, soared, creating a major spike in the wider conferencing SaaS market on its own. The same was true for infrastructure companies underpinning the software.
Yet not all industries can translate to remote seamlessly. What of manufacturing, construction, aerospace et al – and what of a company such as Infor, who specialises in cloud ERP for these rugged sectors?
The company saw an increase of more than 200% in on-premise customers upgrading to the cloud, and 112% growth in annual contract value bookings in May and June. Kevin Samuelson, CEO of Infor, says that the uptick from customers as the pandemic developed came as a surprise.
“Having been through recessions before, normally enterprise software companies are hit pretty hard,” Samuelson tells CloudTech. “And when you think about what we sell, it’s a significant purchase. We were looking at numbers down, we had 20%, 30%, 40% – I expected demand across the board to be down significantly.
“Any industry is facing a set of circumstances they have never seen before,” he adds. “Teams have been disrupted, demand has shifted, employees have had to change. IT systems and technology are one of the only ways to pivot in that world, and so the importance of that has really been magnified.”
For manufacturing in particular, Samuelson describes demand as ‘extraordinary.’ “Those companies had a pretty material fall in demand,” he admits. “But I think they had a larger view. They have international supply chains and, depending on their end market, there is a huge shift in how they supply and also how they’re distributed.”
To say Infor, and Samuelson, had experienced a momentous year even without Covid-19 disruption would be something of an understatement. Samuelson, previously CFO, took over from Charles Phillips as chief executive last August. In April, the company was bought out by Koch Industries and taken private. At the time, Samuelson was quoted as saying the move would enable a ‘long-term approach.’
Having this long game with a cloud-first strategy has therefore been something of a boon. Under Phillips, the almost two-decade old company moved to what it called ‘Infor 2.0’, rewriting industry apps for the cloud on a new operating system, with a particular focus on APIs. Phillips, who remains chairman, held a strong position that industry verticals were the way to go rather than customisation. This is something which Samuelson keenly maintains, adding that the time was right for any enterprise contemplating a big cloud move.
“We really do feel that all of the industry specificity that we put into our products is at a point where customers can very safely, very quickly, very affordably, make that move,” says Samuelson. “That has always been the [problem] with ERP systems; lots of great innovation and technology, but it can be a long, arduous, expensive and risky proposition.
“Moving to a multi-tenant cloud, you can get away from customisations, be able to operate remotely, be able to infuse a lot more dynamism into supply chains and warehouses and overall operations. You put all that together and that means economies can add flexibility and agility and see very quick ROI,” he adds. “That’s a pretty unique set of circumstances in our industry that we think companies should take advantage of.”
Samuelson spoke to CloudTech on the eve of the company’s Inforum event last week. His keynote speech outlined many of the challenges that the industry faces and how Infor can solve them, as well as the abovementioned surprise at demand. Much of the news which came out of the event focused on the success of Infor’s CloudSuite, including new customers such as Auckland Transport and Midwest Wheel Companies.
On the product side, an intriguing announcement was the Infor Multi-Tenant Customer Bill of Rights. Prospective customers can enjoy greater flexibility – avoiding lock-in – transparency, to avoid bill shock, and control. It makes for good marketing and soundbites, but there is a sincerity and logic behind it; ‘a theme behind the theme’, as Samuelson puts it.
“We’re incredibly lucky to be private… what makes Koch unique is they’ve been extraordinarily successful by taking the long-term perspective – thinking in years,” he says. “So if you take that approach, you realise that – if we do this right – we should keep our customers for 10 or 20 years. And if you roll that over, look at all the ways that the industry has treated customers, a lot of the issues are because of short-term thinking.
“If we can think long term and think of our customers really as partners, how can we change the game?” Samuelson adds, referencing the Bill of Rights directly. “It’s not just to move folks immediately, or drive results, and when they’re having a tough [time], we want to be agile and not take dollars and cents every term in order to make the quarterly numbers.”
Samuelson reiterates the theme of luck as plans for 2021 move into view; not just for the breathing space afforded by a long-term approach, but being able to learn lessons from the disruption. What advice does he give for industrial companies looking over their shoulder at a cloud migration plan?
“I would say that they will be blown away by how much operational improvement they can achieve by using the latest technologies, and how little risk and time it can take to make that transition,” he says. “When any company rolls up their sleeves, even for a short period of time to learn about what’s possible, they get pretty excited. I would encourage folks, at a minimum, to take a look at what’s out there.”
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