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Infor Enforces Exclusivity

Infor, a $2 billion enterprise software player, is telling partners to get rid of competitive products or get gone.

Infor

Several partners that have worked with one or more of the company's business software products said they have been told they have to become exclusive to Infor or leave the fold. And they have until Dec. 1 to decide. These partners also offer SAP Business One, Microsoft Axapta or Navision ERP solutions that compete with Infor offerings.

Several of these partners said they received the e-mail message just weeks ago advising them of the requirement and the time line. The partners CRN spoke with, all of whom requested anonymity, said they have not yet decided on their plan of action.

Rick Parker, senior vice president of field marketing at Atlanta-based Infor, acknowledged that the message was sent to partners and confirmed the deadline, but he maintained that only a handful of solution providers are affected. And he added that these partners were not blindsided. "We've been talking to them about this for a year," Parker said.

"When we acquire companies, we evaluate [reseller] agreements. We immediately—upon the acquisition of a company—let those channel partners know about our exclusive requirement," he said.

"It is our policy for partners to be exclusive. We view them as an extension of Infor. We invite them to employee meetings. We are not willing to invest in partners who will compete with us," Parker added.

Parker spoke from the company's annual sales meeting in Orlando, Fla., where he said about one-quarter of the 2,200 attendees were partners.

The notion of partner exclusivity is a hot topic in the industry. The not-so-secret issue is that virtually all software vendors want their partners to concentrate solely on their products, but very few state that desire so explicitly. Some merely set very high quotas on partner sales for the partner to get the highest margin and support levels, for example.

At the end of the day, even some of the Infor partners who were irked about the ultimatum sympathized with Infor's situation. "I can see why Infor is doing this. They have a lot of older, legacy products, and they're trying to build a wall around them to protect that business," said one partner.

Infor, which is majority-owned by Golden Gate Capital, certainly has a lot to sell. The company last month completed its planned buyouts of SSA Global, Extensity and Systems Union, adding to its already extensive portfolio of financial, reporting and business intelligence applications.

At the time, Infor CEO Jim Schaper told reporters that with those offerings under its belt, Infor boasts 70,000 business customers—twice as many as Oracle and SAP combined. Some solution providers say Infor will be hard-pressed to fulfill promises to make all those diverse code bases fully interoperable.

"It's just so confusing. These things may plug together eventually, but it's going to be tough. Look at Microsoft; it has enough problems with four ERP code bases. And Infor has a bunch more than that," the partner added.

In the meantime, there is good money to be made supporting and updating legacy Baan or Epiphany or MAPICS or Aperum customers on products, which are admittedly getting long in the tooth, partners said.

"It's not a bad business for a 'lifestyle' partner, who can make very good margins maintaining and updating those packages," said one partner who received the e-mail.

This partner has not decided what to do yet but said he expects he will shift his business to a rival product line. "Even if Infor takes this off the table, they'll institute some crazy quotas, which might be just as bad," he said.

Another partner who has received the letter said he and others are trying to get a look at the vendor's new reseller contract to better evaluate the situation.

"They keep saying we'll see it soon," he said. "Legally, it looks like they can do this," he added. "Every partner I know views this [exclusivity] with concern."

At the time of the acquisitions, Schaper reinforced the company's partner manifesto, which he described as "a hybrid of direct sales and a highly skilled channel."

Shaper said, "We have 500 channel partners, [and] virtually none sell competitive products. Most are dedicated exclusively to our lines. Our channel partners have as much—or more—domain expertise in the client's business [as] we do."

He estimated that 40 percent of Infor's global license sales go through third parties. "We have unique and very strategic partnerships, unlike any I've ever been associated with. They are dedicated to us, and we treat them as an extension to us. They participate in our incentives, sales trips and kickoffs," Shaper said.

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