Infor’s Competition Intensifies With IBM’s $34 Billion Red Hat Deal

By CultureBanx Team

  • IBM announced plans to acquire Red Hat in a deal valued at about $34B

  • Infor brought in $2.8B revenue for 2017

Charles Phillips-led Infor is facing a newly minted opponent after IBM (IBM -0.99%) announced plans to acquire Red Hat (RHT -0.09%) in a deal valued at about $34 billion. Infor already competes with other juggernauts in the enterprise software space like Oracle (ORCL +0.49%) and SAP (SAP +0.96%). How can Infor continue to carve out its own path in an over crowded market?

Why This Matters: Open source has been the biggest theme in technology this year, and Infor the largest privately held technology provider in the world has been making its mark by flying under the radar. Red Hat made $2.92 billion in its last fiscal year, in contrast Infor brought in $2.8 billion revenue for 2017, meaning they aren’t far off the pace from the major players.

To increase revenue the company has made a commitment to growing its international business.

Infor has decided to go the partnership route rather than the acquisition route like its competitors. They announced two partnerships that sees the company integrate its software with smaller third party vendors rather than acquire them, one with Donnelly Financial and the other is with Itemize.

To increase revenue the company has made a commitment to growing its international business. In the fall Infor disclosed a strategic alliance with Tieto, the largest software and services company in the Nordics. The partnership with Tieto looks to sell and implement Infor cloud solutions in Finland.

IBM’s acquisition of Red Hat is the third largest ever for the U.S. tech industry, as the company has been working to catch up to Amazon (AMZN -0.43%) and Microsoft (MSFT +0.23%) in the cloud infrastructure business. Red Hat, a major distributor of open-source software and technology will become a unit of IBM's Hybrid Cloud division.

Situational Awareness: In 2017, Infor took on a $2.5 billion investment from Koch Equity Development to fund the company’s growth and pay off early investors. In years prior, rumors swirled around whether the company would go public. The consensus has been that the company needs to increase its revenue figures, before it becomes an attractive IPO target.

CBx Vibe:Plugged In” Lecrae & Zaytoven