Click to enlargeLast Fall at Salesforce.com's (NYSE:CRM) annual customer conference Dreamforce, I witnessed a somewhat surprising announcement from Infor CEO Charles Phillips and Salesforce CEO Marc Benioff of a partnership between the two companies. I say surprising because I don't think many people expected Infor, which is a rollup of several traditional 90's era software systems, to be on the list of main stage guest and certainly not a partner target for cloud apps leader (and the poster child for the cloud computing era) Salesforce.com. On the surface you might even say that the two companies are as different as the gasoline engine powered motorcar was from the horse and buggy. Infor though, has made some serious efforts to modernize its offerings and to harmonize the products on a modern UI. You might even have noticed that they've grown much more aggressive over the last few years, particularly under the leadership of ex-Oracle President Charles Phillips with new releases, new executive hires, acquisitions and a much higher profile marketing campaign.
Many tech "partnerships" are high on hype and low on substance but this week's announcement of Inforce Everywhere signals true depth and real commitment by both companies to build something meaningful between them. The more I've thought about the partnership and the announcements the more I have started to see just what this might mean in the marketplace for customers, for competitors and for each company. Before we dive into the announcement it's probably useful to review the details of the partnership itself. There are three major components to the partnership agreement: 1. Salesforce.com took an equity stake in Infor, 2. Infor became one of only three Salesforce CRM resellers (Intuit and Dell are the other two) and 3. Infor became a Salesforce ISV partner.
Salesforce using an equity stake approach to a partnership is not a new tactic for the company, it did the same thing in a partnership with Unit4 that co-funded the spin off company FinancialForce a few years ago. The arrangement is beneficial to both companies, Infor gets an infusion of needed capital (Infor is a private company, owned mostly by Golden Gate Capital) to continue its product modernization efforts, and Salesforce.com gets some royalties (like an appExchange partner, although this is maybe actually tied to the ISV portion of the agreement) and potentially some influence over future product direction (although as far as I know, that influence has not been exercised).
As a Salesforce.com CRM reseller Infor gets a strong CRM product in its sales portfolio and of course Salesforce.com gets one more distribution channel. In addition Salesforce CRM becomes part of another complete business solution which increases its market reach and Infor, which really doesn't have a strong CRM offering, rounds out its solutions as well. Lastly Infor gains access to the Force cloud platform for developing native cloud solutions, which is the part of the agreement that is directly related to this week's announcement, and is important to Infor directly because of the potential new products as well as indirectly to Infor by providing cloud credibility to its product story.
The announcement itself is the availability of the first of three products that Infor agreed to develop on the Force.com platform, Inforce Everywhere. Inforce Everywhere is the integration that enables Infor's back office solutions to share data and stay in sync with Salesforce CRM front end, and is the key to creating an end-to-end business solution offering from the two companies. Also because the product is built on Force it gains social capabilities through Salesforce Chatter and is mobile. The other two products, which are in development now, are 1. Inforce Ordering, which will provide the ability to create quotes and orders in Salesforce Sales cloud and pass them to Infor for synchronization and order fulfillment, and 2. Inforce Marketing, which uses the assets from Epiphany to provide an expanded set of B2B marketing capabilities that are complimentary to Salesforce's current limited marketing feature set.
Based on the plans and the progress so far I'd say that the partnership offers both companies significant benefit and should provide value to both Salesforce.com's and Infor's customer base. In this case the devil's not in the details, which are well defined and clearly could benefit both companies, but instead in the execution, which involve a lot of moving parts and could prove challenging. In the end though this partnership may prove to be the most aggressive and productive move of all of Infor's moves under the new regimen.