Infor’s acquisition of fellow Tier 2 ERP vendor Lawson Software Inc. gives it a number of new ERP applications...
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and tools that it doesn’t currently have.
But the deal also means Lawson customers need to ask questions about how much Infor plans to support those products in the future, according to analyst Paul Hamerman.
“It really fills some gaps in Infor’s portfolio,” said Hamerman, an analyst with Cambridge, Mass.-based Forrester Research Inc. “I think the acquisition is a good one for them.”
This week, St. Paul, Minn.-based Lawson announced it had agreed to a $2 billion buyout from Infor, based outside Atlanta, and Golden Gate Capital, a private equity firm.
The purchase benefits Infor in a number of ways, Hamerman said. Lawson is stronger in core financials and human resources in many ways, he said.
Infor also gets an ERP suite that is more industry-specific than its own, more broadly focused ERP and includes manufacturing and supply chain applications.
In addition to Lawson’s manufacturing and distribution ERP packages, Infor also gets ERP software for verticals including fashion, food and beverage, and equipment service management and rental. Lawson acquired those applications when it merged with the Swedish firm Intentia in 2006.
“The specificity of Lawson’s [applications] can fit in well within Infor’s fairly granular needs,” Hamerman said, and that will ultimately benefit Infor’s user base.
There will also be questions about how Infor will integrate the new technology into its existing portfolio, according to Hamerman. It also remains to be seen how much Infor will spend on further developing those applications, or if they’ll favor some over others, he said.
“If I were a Lawson customer, I wouldn’t worry too much about it. Their investment is safe in the near term. But they should be diligent in understanding roadmaps and future products.”
A play for customers
While details are still somewhat scarce, and the deal must still get government approval, the acquisition seems to be an attempt by Infor to broaden its user base rather than a play for any of Lawson’s technologies, according to Simon Ellis, practice director for supply chain strategies at IDC Manufacturing Insights, based in Framingham, Mass.
“Size is more important than it’s ever been,” Ellis said.
That’s because much of ERP vendors’ sales come from up-selling existing users on their other products, as opposed to gaining brand-new customers, according to Ellis. Gaining thousands of new customers helps Infor reach that goal.
Using an analogy, Ellis said, “if you’ve got the SAP enterprise suite, you’re not going to go and get Oracle analytics.”
Concerns about the impact on Lawson customers are probably overstated, according to Ellis, who compared the purchase to JD Edwards’ acquisition of supply chain software maker i2 in the late 1990s, which resulted in a lot of “handwringing.”
In the end, there was very little disruption to i2’s installed base, Ellis said. “JD Edwards did a pretty good job of persuading [i2’s ] customers that the sky wasn’t falling.”
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