IFS World Conference: It is True — Enterprise Application Vendors Must Embrace The Internet of Things (IoT) or Die Trying

 

Recently, I had the pleasure of attending the IFS World Conference in Boston MA.  IFS is virtually unknown in North America, but their legacy and reputation has been strong since its founding in 1983 in Linköping, Sweden.  The company develops Enterprise Resource Planning (ERP), Enterprise Service Management (ESM), and Enterprise Asset Management (EAM) solutions. While always pragmatic and cautious, IFS has realized they need to embrace emerging trends in the marketplace such as; social media, mobility, The Internet of Things (IoT), wearables, and The Cloud.  Initially, much of the conversation and emphasis focused on embracing disruption, adopting social media, and mobility – which I thought was intriguing coming from such a long-time industry stalwart.

Under the fanfare that only a legacy ERP applications vendor can produce, IFS announced they had achieved the 1,000,000 user milestone. Furthermore, they announced the most significant release in the company’s history of their core version release called IFS Applications 9.  One of the major changes was moving their solution to be available under a layered application architecture which in effect allows IFS’ customers to reduce deployment and customization times while getting more standard features.

I first met IFS in 1999 at a conference in Ronneby Sweden.   Their solutions have always had a reputation of being easy to deploy and configure, but like most ERP vendors, the ratio between base functionality and custom development and configuration was about 70:30.  With the release of IFS Applications 9, combined with the addition of over 500 enhancements, makes their solution easier to deploy with less configuration and even fewer customizations. Moreover, IFS also has some of the longest customer loyalty in the industry and in an IFS World Conference audience poll of 327 respondents, over 50% of their customers are going to (or seriously considering), upgrade to IFS Applications 9.  This percentage is much higher than the industry norm, especially for such a significant upgrade of mission critical applications.  This shows trust and confidence from their overall customer base.

Some of the key enhancements to IFS Applications 9 include; IFS Lobby, which is a customizable dashboard that allows users to consolidate information and status based on their roles, IFS Streams is a notification system that allows collaboration and updates between users – this is very similar to the functionality found in SalesForce’s Chatter, SAP’s Feed, or Infor’s Posts.  Additionally, they have made major improvements to their mobility functionality, scheduling & dispatch, and support for wearables.

OUR TAKE:   IFS’ new functionality is competitive parity, especially against the born in the cloud providers like Infor, or Epicor. However, fostering collaboration and making it easier for users to have the right data in one dashboard helps to increase adoption, shorten implementation times, improve data quality, and user enthusiasm.  IFS has traditionally been pragmatic and deliberate when deploying new solutions.  Further, IFS does not hype their innovation like much of their competition.  By taking a deliberate approach with less hubris, their competition could portray IFS as late to the game – which is not necessarily true. By their nature, smaller, more nimble providers will put pressure on the larger incumbents to innovate. Unlike the incumbents, these solution providers do not carry the decades of domain expertise in the vertical industries they purport to serve. IFS should continue to highlight their deep vertical expertise with strong customer validation.  All the while, showcasing innovations such as the integration of machine data (metering, diagnostics, and health) into Streams or Lobby.  A word of caution, it is important to back-up any claim, either technology or functionality, with a real-life customer or partner example.  By combining marketing with customer realty will show IFS’ prowess from an expertise and innovation perspective.

Another announcement IFS made was the availability of their suite of applications on the Microsoft Azure Cloud Platform.  There is a growing trend for mission critical application vendors to offer their solutions as a service. Choosing Microsoft as a partner was a wise choice for several reasons; their global data center footprint (across 140 countries) allows IFS to deploy regionally enabling them to meet local regulatory and data sovereignty requirements, single Service Level Agreement (SLA) performance guarantees both on the network and application throughput, and complementary technologies at the O/S, Middleware, and Data Layers.  IFS’ cloud solutions come in two service models: IFS Cloud is a traditional Infrastructure as a Service (IaaS) single-tenant offering that deploys Virtual Machines (VMs) in a regional Azure Datacenter. This option is for companies that want to maintain control at the application layer, or wish to outsource their applications to a third-party.  Conversely, the second option is IFS Managed Cloud on MS Azure. This is their full-service, managed single-tenant offering where every aspect of the deployment with the exception of the customer data, is in the cloud from; applications, database, networking, storage, services, VMs, middleware, O/S, etc.

 OUR TAKE: While part of this growing industry trend, IFS’ patience and deliberate approach should pay off. Other enterprise application providers like Oracle and SAP have muddled their messaging and have not executed. Further, they rely on a third-party contract for the managed service component. Going to the cloud creates many challenges, especially around developing an SLA that can guarantee both the network AND the application performance.   While it is an implied, it would behoove IFS to ensure their customers understand they have an option to move back and forth between on-premise and the hybrid-cloud. With the lack of truly automated cloud migration tool-sets, customers need to fundamentally understand the process, promise, and pitfalls of migrating to the cloud. One cannot understate the challenges of cloud migration follow this link for more information.

From a channel perspective, this opens additional opportunities for IFS’ channel and integration partners.  Channel partners are being forced by their customers to consider the cloud as a viable delivery option.  While IFS has announced the IFS Academy learning center, there is an opportunity to on-board and drive revenue from a whole new set of channel partners who are already well versed in deploying cloud-based solutions. IFS should consider making a significant investment in recruiting localized channel partners, training and certifying these partners, and offering sufficient Market Development Funds (MDF) and compensation to activate a high-growth channel program. Embracing a cloud-based delivery model will change how IFS executes it Route-to-Market (RTM) strategy both direct and indirect.  The value proposition for these services moves from a CAPEX to an OPEX budget justification while provisioning and deployment models become more relevant.

One of the most interesting components of the company is IFS Labs.  The focus for IFS’ innovation strategy is on wearables, voice recognition, and IoT.  Interestingly, Sony and IFS have partnered to bring IoT functionality as a proof-of-concept to Sony’s SmartEyeglass technology.  Allowing field service and maintenance technicians to see real-time diagnostics on remote assets in areas like; O&G, energy, transportation, etc.

OUR TAKE: IFS has realized that while Enterprise Software is traditionally not very innovative, the applications and use-cases, especially around data management and IoT, show real promise. IFS showcased real live IoT use cases in the field which is something that very few other vendors can do at this time. IFS should continue to highlight how its products can help to streamline and bring calm to the Big Data chaos.

One of the challenges IFS will have is expanding their brand in North America and IFS, it appears, has moved the chess pieces to at least a place where they can compete. The move to the cloud should help with awareness and consideration, especially on a regional front.  However, IFS sets itself up to be an interesting acquisition target by Microsoft.  Especially, if rumors are true about Microsoft’s potential acquisition of Salesforce.com. The combined companies would no doubt create a massive disruption in the marketplace.  In that same vein, for IFS to get above the noise in the US there are several acquisition targets for IFS that come to mind that might make sense. While the speculation is just coffee-talk, IFS is doing what it needs to remain relevant and succeed – even if success is slow and steady.