Infor Plays Hardball With Partners

The Alpharetta, Ga.-based company, which claims to be the world's third-largest enterprise software provider, has again given its channel partners an ultimatum.

A few weeks ago, partners received new contracts and were given 10 days -- until April 13 -- to sign. Those failing to do so would be docked a point of margin per day of delay, starting April 16, according to Infor partners with the documents. And should a partner still not sign, Infor would take the maintenance and support business of the partner's customers direct.

In addition, non-signing partners will forfeit their ability to do business with Infor and will not be paid commissions if owed.

The whole kerfuffle, partners say, is a continuation of a run-in that started early last fall, when Infor told partners they had until Dec. 1, 2006, to sign their contracts, which demanded strict vendor-exclusivity. So if a partner reps Infor and SAP's Business One or Microsoft's Navision, he must drop the competing products or lose the Infor affiliation.

Most software companies would prefer their partners to be true blue, but they don't put that into writing. There are implied and sometimes explicit pressures by vendors that favor the partners that favor them. But Infor put it all down in black-and-white.

One Infor partner, Tim Singleton, president of Premier Results Commack, N.Y. would not discuss the new contract. But, he did say "we are currently operating under the current agreement we had with Aperum and we hope Infor will still honor that."

Infor bought Aperum a few years ago. It has also purchased Baan, Epiphany, GEAC, SSA Global, Extensity and Systems Union and other companies and assets over the past several years.

An Infor executive said that this new contract, and the previous one discusse last fall, are not one and the same. "The earlier contract dealt with exclusivity only. Now the issue is our new channel business model," said Rick Parker, senior vice president of marketing for Infor.

Infor traditionally sought exclusivity from partners, saying it treats them like an extended field-sales force. Partners attend its sales meetings and other company events, for example.

Last fall, Infor told CRN that only a few solution providers were affected by the exclusivity demands made at that time. Today, Parker said the handful of partners who held out on that contract have since signed-- a contention denied by several partners who say they never received, let alone signed, the contract Infor had discussed with them last fall.

Instead, they said this latest document, received in April, re-covered that ground.

Parker said the new contract will not affect legacy customers but would make it easier for existing partners to add new Infor lines to their portfolio.

Many partners, including several who talked to CRN this week, bridled at the company's handling of the issue. Some of them requested -- and did not get -- extensions. All of the partners asked not to be identified.

One solution provider said he viewed Infor's latest action as an attempt to beef up revenue for a possible initial public offering. "They want to take more sales direct and book them," he said.

Clearly the partners and the company are at odds over the chain of events. What is clear, however, is that as Infor fields a variety of aging code bases--slated to be updated with Web services and SOA capabilities--the company faces stiff competition from SAP, Oracle and Microsoft in business software.

This story was updated Wednesday afternoon with more VAR comments.