Former Oracle president and US Marines captain Charles Phillips has taken the reins at the third-largest enterprise applications company, Infor. So what is his strategy for the firm in the era of cloud computing, and would he share his thoughts on Oracle’s moves since he left? Jason Stamper finds out
There are not many technology CEOs quite like Charles ‘Chuck’ Phillips. Prior to a career on Wall Street that saw him rise to managing director of Morgan Stanley, Phillips was a captain in the United States Marines Corp.
"One of the advantages of military services early on in life is that you get a chance to develop a leadership style and understand organisational dynamics at a young age," Phillips says of the experience.
He’s certainly needed that leadership style. From the managing director role at Morgan Stanley he was plucked by Oracle chief Larry Ellison to become Oracle president in 2003. It’s a position he held for seven years, while in 2009 the was appointed as a member to the President’s Economic Recovery Advisory Board to provide President Barack Obama and his administration with advice and counsel regarding the economy, in such high esteem was he held.
In October last year he took the CEO role at the ERP, CRM and SCM applications firm, Infor.
During his seven years at Oracle he had a dramatic impact. In the eight years before he joined, Oracle had made only minor acquisitions, small firms like Steltor, Indicast, NetForce – not exactly household names.
Charles Phillips, Infor CEO
But with Phillips on board it was a different story. In 2005 Oracle bought PeopleSoft for $10.3bn, followed shortly after by retail apps firm Retek for $630m. That same year it snapped up banking applications company i-flex for $900m, and then in 2006 Siebel for just shy of $6bn. The acquisitions kept on coming: Hyperion, BEA Systems and many more.
Phillips played a key role in these, believing Oracle needed to diversify rapidly and help to consolidate the market, building an entire ‘stack’ of software and hardware that would eventually see it buy Sun Microsystems shortly after Phillips left.
While he was in the president’s seat, Oracle experienced revenue growth of 300%. He and Ellison’s strategy certainly seems to have paid off so far: for fiscal 2010 Oracle enjoyed total sales of $26.8bn, up 15% year-on-year including the effect of acquisitions.
None of that matters to Phillips now, of course. Asked whether he believes Oracle was right to buy hosted CRM player RightNow last month, he says: "I can only speak for Infor, so all I can say is we will continue to make a few acquisitions ourselves, but balance that with aggressive internal investment." ‘Aggressive’ is one of the words you are likely to hear from Phillips quite a bit. That and ‘speed’.
The ‘Oracle four’
Infor was founded in 2002 under the name Agilisys, in Alpahretta, Georgia, and today the new company is the result of around 40 acquisitions. It’s privately held, with the majority shareholder being Golden Gate Capital.
There were four senior executives who joined Infor from Oracle late in 2010 and early this year, including Phillips. Duncan Angove came over as president of products, marketing and support, Pam Murphy is now COO, and Stephan Scholl is now EVP global field operations. One Infor insider says: "It almost felt like an Oracle takeover."
So what was their plan? "We started with a three-month deep-dive, detailed business reviews," says Angove. "Charles [Phillips] is definitely a product guy, and he was looking at how we set out a compelling roadmap. We’ll be doing different acquisitions, not buying cash but buying products.
"Right from the first three months there was this whole emphasis on speed. People have been shocked at how fast we have made decisions. For instance, when we bought Lawson we closed it on the Tuesday and on the Wednesday we approved the hiring of 71 new engineers in that business," he adds.
Phillips picks up the theme: "The main focus is accelerating the roadmaps and delivering products more quickly, modernising applications and delivering mobile technology in areas that people didn’t expect. In the past 10 months we have shipped more new features than the company had seen in the past three to four years – that type of acceleration in terms of innovation.
"One of the good things about having a team that’s worked together for a long time that has similar approaches is we make decisions quickly, and we all believe that the pace of business and decision-making has to be faster. It’s a way we can differentiate ourselves."
In its fourth quarter Infor saw sales of $510m, up 10% year-on-year. It’s still a long way off the numbers one and two in this space – Oracle and SAP – but Phillips is not satisfied with being the number three. "Everybody always wants to improve," he says. But he does note that it’s a large market, surely large enough to support at least three big players.
Infor 10, ION
As well as the rapid integration of Lawson into the Infor business, the other major news on the product front recently was the launch in September of Infor 10. It wasn’t just the improvements to the ERP product that was newsworthy, but also the news around ION Suite, claimed to be a lightweight middleware layer built into the software that helps to ease any integration challenges customers would otherwise face.
What is not said, at least publicly, is that this is also clearly designed to outmanoeuvre Oracle’s Fusion Middleware and SAP’s NetWeaver middleware lines.
ION is claimed to connect and integrate Infor and non-Infor applications, storing information in a common format and repository. "ION creates the mobile, social and flexible enterprise," says Soma Somasundaram, SVP global product development at Infor. "Because it’s lightweight and built using open standards, ION installs much faster than heavy middleware, and allows customers to get up and running quickly and efficiently so they can focus on their core business."
It’s clear why ION will be needed – Infor is the result of around 40 acquisitions, and if these products are to be brought together in a meaningful way, a robust and flexible middleware layer was vital.
As Angove says, Phillips is a product guy as much as a manager. "We want to be perceived as a company that builds very beautiful applications. We use the term ‘consumer grade UI’ in the sense that we want to bring some of the social computing concepts and interfaces to the way people consume their applications," he says.
What about cloud computing – what’s Infor’s story here? "We have a million subscribers in the cloud today," Phillips claims. "We have a multi-tenant application suite, CloudSuite, and customers can use that today. What’s unique about our strategy is that the same CloudSuite applications can be deployed on premise, so customers can decide – they can deploy in a hybrid fashion, they can still choose to have some locations where they want cloud."
So what do the analysts make of all this talk of speed, integration, better user interfaces and cloud?
For analyst firm Ovum, the outlook for Infor is generally positive. The company’s analyst Somak Roy notes: "Overall, the outlook is promising and the most important building blocks are already in place, but success will now depend on the nuts and bolts of execution." Roy also notes that a recent partnership with Salesforce.com is "a big deal".
Summing up how the firm would like to be perceived, Infor’s Angove says: "We have the mindset of a start-up even though we do over $2.5bn revenues. We want to move fast at scale. It’s like the rugby player Jonah Lomu – big but fast."
Ironically perhaps, Ovum’s Roy believes the firm needs to calm things down a little after the numerous initiatives Phillips and his team have been getting on with: "Infor’s success will be good news for the ERP market but the company should now settle into a period of stability involving tactical-level changes only."
Whether one believes it is moving too fast or merely taking the fight to Oracle and SAP – not forgetting other rivals such as Microsoft Dynamics, Sage, and cloud ERP, CRM and HR rivals like NetSuite, Workday and SugarCRM – is open to debate. But with Phillips at the helm there are few signs that the company will be slowing down any time soon.
Infor or enterprise applications watchers will want to listen to the entire audio podcast with Charles Phillips and a longer transcript of this interview at www.cbronline.tv.