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Home » Infor to buy GT Nexus for $675 million; move extends cloud's role in global trade
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Infor to buy GT Nexus for $675 million; move extends cloud's role in global trade

August 11, 2015
DC Velocity Staff
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The cloud has gotten a little more crowded in the past 24 hours.

Infor, the world's third-largest provider of enterprise applications and services, said today it agreed to acquire Oakland-based GT Nexus, touted as the world's largest cloud-based commerce platform, for $675 million. The announcement comes a day after software giant Oracle Corp. and cloud-based warehouse management systems provider LogFire, Inc. collaborated to develop the first integrated transport and WMS system in the cloud.

Infor said in a statement that the transaction will create the first "global commerce cloud" to give companies the visibility needed to integrate worldwide manufacturing locations for the sharing of ordering, financial, and shipment data. For Infor, which manages a portfolio of automated supply chain solutions but is not particularly well-entrenched in the segment, the transaction helps elevate it to the levels of supply chain powerhouses like Redwood Shores, Calif.-based Oracle, German firm SAP SE, and Scottsdale, Ariz.-based JDA Software, said Steve Banker, service director, supply chain management, at ARC Advisory Group.

The deal is expected to close within 45 days, pending regulatory approval, Infor said.

Infor is one of the leading providers of cloud-based enterprise resource planning (ERP) software, which helps manufacturers synchronize production inside the enterprise. Infor is especially strong in building cloud-based suites to serve verticals like fashion and retailing, a capability that sets it apart from companies like SAP and Oracle, according to James A. Cooke, analyst for Nucleus Research Inc., a consultancy. Infor has more than 3,200 fashion and retail customers, many of whom also use GT Nexus.

Infor has benefited from the growth of global contract manufacturing, which requires a cloud-based process to coordinate activities among different companies handling product design, production, and distribution. By acquiring GT Nexus, Infor extends its presence into cloud-based global trade management, where buyers transmit orders to suppliers, financial institutions, transport partners, and third-party logistics (3PL) providers. GT Nexus functions as the order-management system for an entire network by managing the order's master record across multiple stakeholders, and doing so in a scalable manner. The objective is to improve the flow of goods, funds, and trade information by allowing all participants to operate against a uniform set of data standards across myriad supply chain functions.

In a statement, Infor CEO Charles Phillips said the companies would offer businesses "unprecedented visibility into their supply chains to manage production and monitor goods in transit and at rest." Phillips added that in a turbocharged supply chain, "all partners need to know what was ordered, when it was built, where it is in transit, if the order has changed, and [whether it] has cleared customs. Specialization and speed are moving the future of manufacturing into the commerce cloud."

GT Nexus' forte is providing end-to-end visibility of ocean freight shipments, a complex process that stretches across thousands of miles and encompasses numerous parties. Banker of ARC said GT Nexus' delivers "granular visibility," where status information extends far beyond ship status to the number of containers and products aboard the vessels. Among GT Nexus' other skills is the facilitation of more than $20 billion in payments between buyers and suppliers in 90 countries and in eight currencies.

The broad strategy of cloud-based supply chain convergence, which came across in today's announcement, was also emphasized yesterday by Oracle and Logfire when they announced their partnership. Phillips joined Infor in 2010 after a seven-year stint at Oracle, where he served as its president and codirector. The dual announcements reinforce a broader strategy of migrating supply chain services from traditional on-premise systems, where software is customized and maintained for clients, to web-enabled, cloud-based models, where startup costs are lower and deployment times are faster. Users of cloud-based supply chain services achieve full payback on their investments about 1.7 times faster than with on-premise solutions, according to data from Nucleus Research.

In addition, over the past 12 to 18 months cloud-based supply chain services have gone from being rudimentary in nature to delivering the same richness of information traditionally found in more expensive and complex on-premise systems, Diego Pantoja-Navajas, LogFire's founder and CEO, said in an interview yesterday.

Systems Integration Services
KEYWORDS ARC Advisory Group GT Nexus Infor JDA Software Group Nucleus Research Oracle SAP
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