Infor Taps Ex-Oracle Prez Phillips as its New CEO
November 1, 2010 Timothy Prickett Morgan
There’s a new sheriff at midrange application software giant Infor, and his name is Charles Phillips. Yes, that Charles Phillips, the ex-marine and former Morgan Stanley software analyst who had been taking orders from Oracle co-founder and chief executive officer, Larry Ellison, until early September. Now, Phillips will be the one giving the orders, and at a company that will be increasingly competing with Oracle, SAP, Microsoft, and others in the enterprise software racket.
Infor, of course, is the midrange ERP, CRM, and SCM software maker that is an amalgam of myriad software companies that created products that ran on OS/400 (now IBM i), Unix, and Windows. The company is based in the IBM AS/400 application stronghold of Atlanta, Georgia, where the MAPICS manufacturing software business Big Blue used to own was located. Atlanta was a center of gravity for AS/400 application software development, as is Chicago, the largest city that is reasonably close to the AS/400 development labs in Rochester, Minnesota. The list of AS/400-related acquisitions that were done to transform Agilisys into Infor would take a flow chart the size of your desk, but the key AS/400 software houses that went into the mix include MAPICS, Marcam, Systems Software Associates, JBA, Infinium, and of course, Agilisys. The company’s majority stakeholder is equity firm Golden Gate Capital, and it has cost untold billions of dollars to glue the bits of Infor together over the decades, with its 70 acquisitions. Infor is not just a conglomerate, but the result of multiple conglomerates meshing together like multiple galaxies under the influence of financial gravity.
Infor has revenues on the order of $2.2 billion, has over 8,000 employees, and over 70,000 customers. Of those, 15,000 are using an OS/400 or IBM i platform, so that makes Infor the single biggest remaining ISV for the IBM i platform. Jim Schaper, who has been CEO and chairman of Infor since it went on its buying spree a few years back, was an executive at networking software maker Banyan Systems and at software provider Dun & Bradstreet (which is part of the Infor collective). It is not clear why Infor wanted a new CEO–the company did not say–but the reason very likely is simply that Phillips left Oracle as Hewlett-Packard‘s Mark Hurd moved in as co-president and Phillips’ availability got Infor to thinking about the possibilities. Who better to help Infor defend against Oracle’s attacks down into the midrange and to help Infor sell against the JD Edwards World and OneWorld software stacks? (Or, who better to broker a deal to buy the World and OneWorld businesses from Oracle, if that is what Infor is thinking? Or to gussy Infor up for a sale to Oracle or SAP?)
According to a report in the New York Times, Phillips went to high school in Atlanta and still has family and friends in the area. After working for Ellison for seven years, Phillips was no doubt ready to run his own show. Golden Gate certainly does not need another expert on acquisitions, but Phillips led the acquisitions of BEA Systems, Hyperion Solutions, and Siebel Systems at Oracle, and was obviously on hand when the PeopleSoft and Sun Microsystems deals went down.
What Infor probably needs is someone to help it get ready for an initial public offering so Golden Gate and the other partners who own slices of Infor can get their money back with a tidy profit.
“Infor has quietly built the third largest enterprise applications company in the world, with 59 percent compound annual revenue growth over the last seven years, higher margins than eight of the top 10 application companies, and a track record of leading innovation,” Phillips said in a statement announcing his appointment as CEO at Infor last week. “With over 70,000 customers in 125 countries, including divisions of large corporations, Infor is poised for growth as the next generation platform ships in January.”
Phillips is referring to the ION platform for gluing the disparate Infor products together and running them locally or on infrastructure clouds. The sales pitch that Phillips gave in the statement sure sounds like the beginning of a red herring–the S3 offering plan, not a fish–to me. And so does the brief interview with Schaper that Phillips did last week.
In his blog discussing the appointment, Schaper said that he would be staying on as chairman at Infor and would be increasing its workforce by around 8 percent, or 640 employees, in the coming months. People are being added for customer-facing jobs as well as in development, presumably for the ION effort.
Phillips takes over the CEO position at Infor on December 1.
My money–in the spiritual sense, not actually in the dollar sense–is on Infor doing an initial public offering as soon as Wall Street is ready to receive it. Someone may, of course, try to snap the company up before then. A lot depends on how profitable Infor is, and we just don’t know. With a software maintenance renewal rate of above 90 percent, that is a pretty decent annuity revenue stream–the kind that Oracle, Microsoft, and IBM already have and that Hewlett-Packard doesn’t. With Leo Apotheker, former CEO of SAP, now in charge of HP, stranger things could happen than HP buying Infor. Like, for instance, IBM letting Sun slip into Oracle’s hands or HP picking Apotheker as its CEO.