I'm sure it still happens, but I can't imagine a greenfield situation where a company would turn to Oracle or SAP for a full-blown, on-premises ERP system. Who would want to suffer the disruption, lock-in, and expense?
Yet the big money still seems to wind up in those two companies' pockets, much of it traceable to longtime customers neck deep in legacy software licensing and maintenance fees. According to the IDC number for 2012, Oracle took in $28 billion last year and SAP netted $17 billion. The No. 3 player in enterprise application software, Infor, took in less than $3 billion.
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As CEO of Infor, Charles Phillips is attempting to break the Oracle-SAP duopoly. For the past two and a half years, Philips, after leaving his post as co-president of Oracle, has performed what he calls a "a complete reboot" of Infor. "We changed the strategy, we changed the management team ... we changed the focus from building scale to innovation and products ... and then changed all the key assumptions on what architecture we would use." In the process, Infor has hired 800 new developers and launched 300 new products.
But what makes Phillips believe his much larger rivals are vulnerable? For one thing, says Phillips, Oracle and SAP have made many acquisitions of products, but "they don't have an integration strategy because they don't view their job as integrating those products in a cohesive way." By contrast, Infor has come up with its own method of "loosely coupled" integration that works among Infor's products as well as with third-party applications.
Another edge, says Phillips, is in vertical expertise. "For most of our competitors, the model was build a product once and sell it to all industries -- write it once and sell many. We don't do that. We really write it once for an industry. We're willing to have focused, last-mile features for a particular industry that may not make sense for other people. We can implement more quickly and we understand your industry." He cites health care as one of Infor's hottest vertical areas.