Planning a safe journey to ERP in the cloud
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Infor recently threw a gauntlet into the cloud computing market with the announcement of CloudSuite, touting it...
as the first set of industry-specific hosted enterprise applications available on the popular Amazon Web Services cloud. Each suite under the CloudSuite brand will contain applications that the vendor had offered as independent deployments.
Infor said it plans to roll out the suites through the year, starting with Infor CloudSuite Automotive, Infor CloudSuite Aerospace & Defense and Infor CloudSuite Hospitality in the spring, and Infor CloudSuite Corporate in the early summer.
The CloudSuite release is in line with what Bob Parker, group vice president at Framingham, Mass.-based IDC Manufacturing Insights, calls Infor's "microvertical" strategy. It's a roadmap that many vendors are following by increasing their focus on software that targets the needs of specific industries. "These are thinly sliced categories of business," Parker explained. "With this announcement, they're talking about spaces like aerospace, defense and hospitality. I think this move is something that the market will respond positively to."
Customers ready for more cloud enterprise applications
The current temperature of the business IT environment is welcoming to new cloud products, which should work in Infor's favor, Parker added. Interest in cloud applications is growing, he said, while worries about cloud security and reliability are slowly being alleviated as more companies adopt cloud, especially those in the midmarket space.
Vendors like Infor are responding to this growing acceptance of cloud computing through their offerings, according to Tony Christian, director at Cambridge, U.K.-based Cambashi Limited. "There seems to be very much a vendor push, rather than a vendor pull, with an increasing shift to offering software and services on the cloud, driven mainly by total cost of ownership considerations," he said. "This rationale aligns with the driver of 'do the job for lower cost' that is the main consideration among non-IT executives."
The influx of cloud applications in recent years means that CloudSuite faces steep competition on multiple fronts, Parker said. There are the emerging "pure cloud" systems that are architected for multi-tenant use. Workday, for example, is planning to expand its scope beyond HR, and Flex has had a variety of cloud customers for several years, he added. New players are joining the cloud game all the time. SAP and Oracle, the market's big guns, are also taking note of cloud's growth, with offerings like SAP HANA Cloud and Oracle's acquisition of Sun Microsystems.
"It'll be interesting to see what Infor does on Amazon Web Services, whether or not they make this truly multi-tenant," Parker said.
What awaits Infor customers in the cloud?
With CloudSuite's arrival, existing Infor customers will get a pass from the burden of system maintenance, Parker said. "There's a genuine interest in getting out of the infrastructure business for a lot of manufacturers. Upper midmarket manufacturers probably have the scale to run the infrastructure themselves economically, but [in companies] below that, IT is feeling a lot of pressure," he said.
Additionally, Infor customers should expect easier access to information with CloudSuite, with increased data standardization both internally and across industry networks, Christian said. Other potential benefits of the move to the cloud include improved collaboration with colleagues and supplies and better use of business intelligence (BI) information, he added.
In Christian's analysis, Infor CloudSuite covers the kind of features that have come to be expected by cloud customers. "The Infor applications fall into what we would regard as the generally accepted naturals for a cloud approach -- stuff like email or document sharing, such as Dropbox, at the simple end, to CRM and ERP at the complex end," he said.
Infor vs. the cloud market
Christian's advice to Infor and other cloud vendors is to address the barriers that may be standing in the way of companies adopting cloud and to fine tune their support to the needs of those making the IT buying decisions. "It is likely that the champion for cloud will be the CIO, since it is a rare non-IT executive that is interested in the details associated with adoption of the new infrastructure," he said.
According to Parker, the biggest question about CloudSuite -- which could also become its biggest market differentiator -- is how it will be priced. "In my mind, if they price this to what the equivalent of 22% maintenance is, then it's a real compelling proposition," he said. "But are they going to make people commit to a certain number of users? Are they going to make people sign up for a certain number of years? If so, then it will just look like the same old story."
"[Infor] can move onto the cloud, but how courageous are they going to be with the model?" Parker wondered. Time will tell how Infor will answer those questions and what it will do to really set itself apart in the cloud space.
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