The Stealth Software VendorBy Mel Duvall | Posted 2006-11-21 Email Print
Who is the No. 3 enterprise software company? You may be surprised.
Quick. See if you can name the third biggest enterprise software company in the world.
SAP and Oracle have the top two spots nailed down, but who's next? SAS Institute? CA? Sage Group? Microsoft?
How about Infor Global Solutions?
If that name registered a complete blank, you would be far from alone. Infor, which is headquartered in Atlanta, claims to be the third biggest enterprise software company in the world, but it has an identityor lack of identityproblem.
Over the past four years, the venture capital-backed private company has quietly snapped up a host of players in the enterprise software marketsome with familiar names, like SSA Global, Mapics, Epiphany, Extensity, Geac, Systems Union and Formation Systems. Infor has forged a collection of primarily mid-market players into a sizable conglomerate with annual revenue of about $2.2 billion, says chief executive Jim Schaper.
Infor's ranking depends on how you divide revenue between enterprise software (like enterprise resource planning and customer relationship management) and other lines of business, but by Schaper's reckoning, Infor is now the third largest enterprise software company, with 8,100 employees and 70,000 customers.
And it's not done yet. "Our appetite for additional companies hasn't waned," Schaper says. The long-range plan is to take the company public, but that won't happen soon because, Schaper points out, the private investors haven't completed their game plan: "There are other companies we would still like to acquire, and we can do that faster as a private company."
Infor was born in the chaos of the dot-com implosion. In the latter half of 2001, the investors behind private equity firm Golden Gate Capital saw that there were too many players in the enterprise software market. The firm tapped Schaper, a 25-year industry veteran who was formerly CEO of Dun & Bradstreet Software, to head up a venture that would acquire companies in the expected fire sale. The venture was initially named Agilisys and was renamed Infor in October 2004.
The first acquisition was made almost a year after Schaper came on board, when Golden Gate teamed with Parallax Capital Partners to purchase the process manufacturing software business of SCT Corp. in April 2002. The deal was followed by a steady stream of acquisitions, initially concentrated around manufacturing.
Infor's customers are primarily in the mid-market category, with revenue from $25 million to $2 billion. However, it does have a few customers in the Fortune 500 thanks to its acquisitions. Washington Mutual and Wells Fargo, for example, use the company's Epiphany CRM software.
Schaper says Infor's low profile has served it well, letting it negotiate deals quietly. However, he says the time is right for Infor to step into the spotlight and gain the brand recognition worthy of its size. To do that, Schaper plans to be more vocal both in the press and with analysts.
For the most part, customers who have seen their software vendors become acquired by Infor say the transition has gone smoothly and provided benefits.
George Neill, director of information technology for Organic Valley Family of Farms, a cooperative in LaFarge, Wis., with about $300 million in revenue, had been using an ERP offering from SCT and decided to implement a financial package from Farnborough, England-based Systems Union. In August, Infor announced it was buying Systems Union.
"Instead of dealing with two vendors, I'm now dealing with one," Neill says. "My hope is they will be able to more closely integrate the products in time."
Dave Deggendorf, ERP project lead for RPM Wood Finishes Group of Medina, Ohio, which has been using SCT's ERP software since November 1998, agrees that the ownership transition has been "relatively transparent." Infor's size and stability also help, he adds: "When I go to the annual [vendor] conference, instead of 200 people, there's closer to 2,000."
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