Infor Touts License Fee Growth, Expansion Plans
March 22, 2011 Alex Woodie
Infor, which is in the process of trying to acquire competitor Lawson Software, last week announced that it grew license revenue by 17 percent during its third quarter. The privately held company said it would hire 400 additional software developers to help it keep up with a rigorous schedule in 2010 that will see it ship more releases than ever before.
Infor’s unsolicited $1.83 billion bid for Lawson earlier this month shows that the Alpharetta, Georgia, company is by no means calling it quits in the M&A department. The company, which has completed too many acquisitions to count, owns major IBM i properties such as MAPICS, BPCS, System 21, Infinium, KBM, daly.commerce, and PRMS, in addition to the old Baan product.
There is no telling if Lawson–which had partnered with a bank to help broker some kind of deal–will accept Infor’s offer, or whether it will hold out for something better. As the world’s third-largest ERP vendor, Infor brings in around $2.2 billion per year. Lawson, which bought the IBM i-focused Intentia ERP company several years ago to go along with its existing business on Unix, Windows, and IBM i platforms, brings in about $750 million per year. With a reported 70,000 customers, Infor runs a relatively lean shop with just 8,000 employees, while Lawson employs 3,900 to serve 4,500 customers.
With last week’s announcements about revenue growth and hiring plans, Infor appears to be positioning itself as a vibrant and healthy entity that’s fit to serve as a new home for Lawson customers and employees. We have no reason to believe otherwise, as the privately company keeps its books to itself.
According to Infor, the first quarter under the new CEO Charles Phillips was a successful one. In addition to growing license revenues by 17 percent, the company says it increased cash operating margins by 24 percent.
“Strong revenue performance and improved operational efficiency has increased our operating margins and generated cash flow beyond our targets for the quarter,” stated Stephan Scholl, executive vice president of global field operations, in a press release. “The improved margins, along with further improvements in operating efficiencies, will fund the additional investment in product development.”
The 400 new hires will have an immediate impact, according to Soma Somasundaram, Infor’s senior vice president of global product development. “We will ship significantly more new features and new releases this year than ever before,” he says, adding that “this investment in core research and development is a milestone in Infor’s commitment to innovation.”
In other news Infor announced it’s having success upgrading its enterprise asset management (EAM) customers from the old Datastream MP2 product to the newer EAM Enterprise Edition software. While both products run on Windows or other platforms, they are often utilized by customers who run IBM i-based ERP systems.
Customers making the move from the MP2 product to the more powerful EAM Enterprise Edition software include Brewster Cheese, Chicago Transit Authority, Grimmway, Jamaica Energy, Maritz, TvAzteca, and Virginia International Terminals.