Infor CTO and president of products Soma Somasundaram
Infor CTO and president of products Soma Somasundaram

Infor Pumping Hundreds of Millions into Industry Cloud Efforts

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Infor expects to pump hundreds of millions of dollars into its industry-cloud ERP products following the sale of its enterprise-asset management business for about $2.75 billion, including $800 million in cash.

Currently #6 on the Industry Cloud Top 10, Infor raised its profile earlier this year when CEO Kevin Samuelson disclosed that its industry-cloud business has an annualized revenue run rate of about $1 billion. You can read all about that at Infor Leapfrogs Microsoft, Oracle, SAP: $1 Billion in Vertical Apps.

Infor is a subsidiary of global conglomerate Koch Industries, which also owns the company to which Infor is selling its EAM business: Hexagon AB, which is based in Sweden. Terms of the deal call for Infor to receive $800 million in cash, with the remaining $1.95 billion coming in shares of Hexagon stock, the companies said in a press release.

For Infor, that significant infusion of cash comes at a time when the stakes in the industry-cloud game are soaring as every single company on the Cloud Wars Top 10—the world’s 10 largest and most-influential cloud providers—is investing massive amounts in industry-specific solutions.

While Infor is much smaller than all of those Cloud Wars Top 10 companies except #10 Snowflake, it has been focusing on industry-specific solutions since its founding almost 20 years ago. Infor’s overall revenue is in the range of $3 billion, and when I spoke with CEO Samuelson earlier this year he said that about one-third of that total is generated by Infor’s industry-cloud solutions. You can hear that entire conversation in this Cloud Wars Live podcast episode.

In an email exchange yesterday afternoon, Infor CTO and president of products Soma Somasundaram told me that the sale of the EAM business will allow Infor to focus more on “the operational side of the business process” while also giving it an infusion of cash to focus on its “industry-specific cloud ERP solutions.”

“Infor differentiates itself in the market with our industry-specific CloudSuites cloud ERP solutions, which address specific industries that have adjacent benefits by being on one platform,” Somasundaram wrote.

“We also bring to market capabilities such as product-line management and warehouse management, which provide more end-to-end business-process support for our customers. Our focus, therefore, is more on the operational side of the business process, while Hexagon will focus more on the asset-management side.

“Our agreement with Hexagon further positions us to focus on, and invest more in, the business processes that we support, and to do so in a deeper fashion,” Somasundaram wrote.  

“EAM is a fantastic edge application, but it hasn’t generated significant cross-sell success in our core industries. This agreement reflects our strategy to double down on products and services where we are best advantaged, and partner strategically where we are not.”

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