"It doesn't make any sense to build infrastructure any more. We make mission-critical applications, which are unique for each industry. Each industry is unique in that it has its own complexities. Most firms don't want to build those unique features. But we take all of it as our core strategy. Therefore, we have different products for different industries, which makes us the first company to build separate clouds for each industry. It is a better approach and allows us to specialize in our research and development in software," he said.
Phillips said that apart from the four years spent on rewriting the application and the $1.5 billion of investment, the company had to hire an additional 1,500 developers to get everything done on time. He, however, justifies his strategy by saying that cloud offers the best security for businesses.
"If a company builds and manages its infrastructure on its own, it can make changes by itself whenever there is a problem. Of course it provides convenience, but it also incurs risks of insecurity. On the other hand, by using our cloud products, companies can make necessary changes on Amazon Web Services. Though this is not as flexible as having your own product, it ranks several notches higher in terms of security."
Unlike most of his peers, Phillips is known for being tough, aggressive, quick and decisive. Much of that stems from his stint in the military and subsequently on the Wall Street. Prior to joining Infor, Phillips was president and a member of the board of directors at Oracle Corp, which is one of Infor's largest competitors. During his seven-and-a-half-year tenure at Oracle, the company tripled in size and acquired 70 companies, which could be largely attributed to Phillips' experience on Wall Street as managing director of technology group at Morgan Stanley.
By using his experience at Oracle and his entrepreneurial zeal, Phillips has transformed Infor rapidly in the past few years. The company's revenue reached $2.8 billion in 2014, of which 9 percent came from the Asia-Pacific region. Though it is still a relatively small market compared to North America or Europe, Phillips stressed that China is undoubtedly "the best performer" for growth.
Over the past five years, more than half of its software sales revenue came from new customers. By teaming up with Amazon, the company expects its sales revenue to double in China over the next three years.
The company's revenue grew by 20 percent in the first half of 2014 in China and the growth rate is expected to continue or accelerate. What is more, it expects to double its business in China in the next three years.
Tim Moylan, president of Infor Asia Pacific, Japan and Middle East, shares Phillips' optimism.
"We have a direct sales team in China and also a channel partner network. We have got 55 partners in China. That part of the business has grown close to 70 percent. That is important because we will never be able to scale up directly in the country or to tap the entire market here in one go, as it is too big. The fact that we are seeing significant growth from our partners helps with the acceleration of expansion in China," he said.
Inforentered China in 2002 with fewer than 30 employees. Since then it has grown to about 430 employees and five offices around the nation. By the end of last year, it had more than 2,000 Chinese companies using its products and services. Of this, 41 customers were newly acquired by the company in 2014. The customers come from all industries including manufacturing, logistics, warehousing, automobiles, fashion, financial services, engineering and hospitals.
"Warehousing and supply chains will be the main growth drivers for Infor in the future, and this will be aided by the rapid growth of China's e-commerce industry," said Phillips.
Infor set up a research and development center in Shanghai in 2007. The 200-plus engineers working there are part of Infor's global R&D team catering to customers all over the world. The company also has invested heavily in R&D, and this accounts for 13 percent of its annual revenue.
With China adjusting its economic growth to slower and more sustainable rate, a large number of small and medium-sized enterprises, which contribute 60 percent of the country's GDP, are expected to undergo major business transformation. And that is sweet music for Infor as its research has found that Chinese SMEs are more open and flexible to new technologies such as cloud computing, said Phillips
"More than half of Infor's clients in China are SMEs, and they are well aware that well-designed, industry-specific and cloud-based software solutions will help them gain a competitive edge and expand into more markets."
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