Charles Phillips, Infor CEO: The full interview
We speak with Charles Phillips, CEO of Infor, who outlines the company’s strategy of pursuing micro-verticals, improved user experience, and outsourcing the back-end of its cloud applications.
Over the past year, the Infor has created new, vertical-specific business applications, and it has expanded the remit of its user experience and design arm, Hook & Loop. A question mark has remained above the vendor's strategy to outsource the back-end of its cloud products to Amazon Web Services. But does CEO Charles Phillips care that Infor doesn't run its own data centres for the cloud? Not a bit of it - in fact, he wants his competitors to continue spending money on data centres, while Infor pours its resources into applications.
Ahead of the company's Infor Next event in Dubai last month, we caught up with Philips to see what the company has in store for the coming year or two.
How's the micro-vertical strategy panning out?
If anything, we're consistent. That's core to the company, the micro-verticals. All we've done is add new ones. We're going deeper and deeper into vertical applications, the strategy being that you shouldn't have to customise the software for your vertical - it should come out of the box. Our competitors do just the opposite - they have partnerships with large consulting companies who recommend them. The consulting companies, in exchange for recommending them, get to finish the product. We don't have that, we decided not to allow consulting companies to do that. We're trying to shrink the size of the systems integration industry, not grow it. That's made us less popular in some circles, but I think, between cloud and industry verticalisation, those things should make applications a lot more consumable and ready out of the box, without consulting.
We've added retail. We're designing a retail system with Whole Foods, and it's one of the largest deals we've done as a company. We hired about 80 people, and they've given us about 10 other employees. This is typical of what we do, in an industry that hasn't had any new technology or new thinking in 20 or 30 years. The most recent retail products were the ones that we at Oracle did when I bought Retek. That product's from the 1980s, and the guys who built that product are now at Infor, so we understand that this is kind of redoing it, but on modern platforms.
These guys all over the retail industry, since they've found out we have that team, they're coming in droves from a lot of different places. It's very hard to write a retail system because there's so much data, and so much science behind it. Very few people in the world have built one before - there's probably like 30 or 40 people in the world who have built one. And now they're coming to us, so it's a very rare chance you get to do a new one.
In regards to retail, won't it be difficult to stick to your out-of-the-box philosophy, seeing as the vertical is so varied?
That is part of the historical problem, that's why the systems look like they look. They're all patched together, with fragmented data and systems all over. They know they don't want that anymore. A lot of those systems were built in the pre-e-commerce days, pre-mobile, pre-social, and they didn't think about certain things, so these things are all tacked on over time. And they can't see inventory across channels - like omnichannel - they can't offer the customer the same experience across channels, and all of that is what they want to get rid of. They're a lot more open to innovation and chance. The number of retailers calling us now saying that somebody needed to do this, they want in.
That's what we like to do. We like to study an industry, know what the problem is, make sure that we have domain expertise, hire the right people, the people who have built retail systems before, get a couple of design partners, and then re-do that industry. This is the way all apps used to be built, but then you get big and arrogant, and you start on your 10-year roadmaps, and it's a take-what-you're-given kind of thing. We don't have to do that anymore - we can be entrepreneurial and build new applications from scratch.
What's going on with the Hook & Loop venture?
It's a critical part of our strategy. Now we have about 80 people in New York who do nothing but user experience and design. But it has evolved from user experience only. Now, it's our digital engagement arm. A lot of what we do is have a strategy discussion with a company on how technology can transform your business, and what are you not doing, and do you need to be considering new ways of serving customers.
A lot of CEOs know they should be doing something with technology, they just don't know what! And you have CIOs who are more making the trains run on time, worried about just keeping systems up and running. There's no-one thinking around innovation or what are you not doing. That's what they help do now, they can go in with fresh eyes, and do a lot of discovery and brainstorming and white-boarding. Whole Foods started with a whiteboard session - no presentation, just this is what retail should look like, and the CEO saw it and said that's it. Now we do that with customers and ask them what their three biggest business problems are, and then we start thinking about it and come back, and then we jointly come up with a strategy and go build a product.
You use AWS as the back end of your cloud apps - is that a problem in the Middle East with the data laws?
It's less and less of a problem every day for us because we're not building our own data centres - Amazon is building them like crazy all over. We just follow their footprint. We have access to all of those data centres, so we have applications in the Ireland data centre, in the German data centre, one in Australia, and they keep building them.
As the problem shrinks for us, it grows for our competitors, because they have to build data centres, and that's where I want them spending their money! We're spending ours on applications. In the interim, if we need to do something with a local provider, or a government agency, we could do that in any specific country if we needed to.
It's the experience that matters. No matter what data centre it's running at, we manage it, we do the patching, and it's the same experience. Some customers want the data behind their own firewall, and it's not that big of a deal if someone insists on that. But there are economies of scale with Amazon that no-one can match.
There's a lot being said about Amazon, changing the way that businesses are built up.
They're changing what's possible with computing because of scale. At scale in computing, it means new applications can be built that couldn't be built before because you can collect so much data. You can exponentially collect every attribute about a product, or about a customer, and then apply science to that with unlimited computing power. It's massively parallel computing that scales out on demand, and you only pay for it when you use it. Then you try applications that you wouldn't have tried before because you can afford to do it. It's really having people re-think which applications are now possible, and which things you can use for predictive analytics, because you have more data, you have more science, more compute power. It's a new category of applications that are being made possible.