I had the pleasure earlier this week of attending Lawson Software’s conference and user exchange, aka CUE, in Boston.
The midmarket ERP apps vendor had the singular misfortune to throw its annual user party at a time of great uncertainty for both Lawson and its customers. Lawson has yet to respond to an unsolicited $1.8 billion acquisition offer from ERP rival Infor, aside from acknowledging receipt of the offer on March 11. Despite the Infor elephant in the room, CUE was a good-humored affair. Lawson execs exhibited grace under fire while customers expressed concern but remained cheerfully stoic and pragmatic.
Do you think Lawson will end up part of Infor? Alternatively, will it remain independent or will it be bought by a private equity firm and no longer be publicly traded à la Epicor? As apps vendors try to navigate fluctuating revenue mixes — rising subscriptions versus falling maintenance — being privately held may prove to be an attractive option.
Lawson is currently evaluating whether to break out subscription revenue as a separate line item in its next fiscal year. Of its 4,500 largely on-premise customers, around 350 use a Lawson SaaS product, the fruit of purchases such as Enwisen and Healthvision. Like other apps players, Lawson’s embraced Amazon.com’s EC2 as the cloud infrastructure for its HCM, M3 and S3 ERP apps. Several Lawson cloud services early adopters at CUE talked about their organizations’ experiences and there were some similarities in those stories:
- They faced hardware refreshes and/or obsolescence of the app and database versions they used
- They were already successfully running third-party SaaS apps or remotely hosted software
- They used Lawson managed services as a steppingstone between the on-premises and cloud services worlds
- They identified potential cost savings in moving to cloud services, making it easy to win C-level approval
Other interesting topics up for debate at CUE included:
- How to develop mobile ERP apps to run optimally on a variety of devices
- How to develop and then position vertical analytics for ERP
- The role of marketplaces in customer retention and apps usage expansion
- How tools like Lawson’s Mashup Designer may help customers avoid modifying their ERP apps
Issues still to be addressed:
- How might Lawson play in the PaaS world? It could potentially package up its Landmark development tools, but would Lawson make a move that could dilute its single-minded focus on apps?
- Future M&A? HCM would seem to be a natural area to mine further, but potential buys may also add new vertical family members to its M3 or S3 businesses.
- What’s Lawson’s future? This is where we came in, with the smart money going on an acquisition by Infor. What do you think?