Infor Unveils Plan to Double Channel Revenue

June 14, 2011 Alex Woodie

Infor last week launched a new sales channel program called the Infor Partner Network (IPN) that introduces new rules that will guide the relationship between Infor and its 700 partners around the world. The company has aggressive plans for attracting new partners and hopes the IPN will contribute to a doubling in license revenue from the channel over the next three years.

The new IPN program will make several changes to Infor’s existing program. The company says partners will be motivated by the program’s “highly competitive commission rates,” as well as new performance bonuses. Partners will also get access to co-marketing dollars, through a new Market Development Funding (MDF) program that’s part of IPN.

A new three-tier classification system–gold, silver, and associate–will rate the value of partners to Infor. Presumably, partners can move up a step by undergoing new product training and certification programs that are part of the IPN. (Selling more software will help, too.)

Partners will be able to interact with Infor through a new IPN Web portal, and Infor will also be gathering and dispersing real-time data on the performance of partners.

Infor currently gets about a quarter of its total license revenue through the channel, according to a blog post by chief strategy officer Bruce Richardson. So how big is that number? Nobody but Infor knows.

While Infor doesn’t share detailed information about its finances (unless and until it registers for an IPO), if its revenues look like other large public enterprise software companies, which will often get about one-quarter to one-sixth of total revenues from new deals and software license fees, then it’s a decent assumption that license revenue brings in $333 million to $500 million per year for Infor, out of total revenues of $2 billion. Take one quarter of that range (the amount brought in by the channel), double it, and that’s what Infor is talking about doing with IPN.

That is a big challenge, as Richardson noted: “Doubling revenue will require growing this business much faster than the forecasted growth rates for the ERP and enterprise application markets.”

Infor’s two big competitors, Oracle and SAP, both have big reseller channels, but they also have large internal sales teams handling big deals. Microsoft is unique among ERP software vendors in that it relies primarily on the sales channel to peddle its software. In this regard, the IPN enables Infor to better match what Microsoft is doing with its Dynamics reseller army.