Lawson Software: A Very Sad Ending, and an Important Lesson for HR

I first wrote about the HRM enterprise software “Snowdons of Yesteryear” (with apologies to Joseph Heller for this misuse of his famous phrase, “where are the Snowdons of yesteryear?” in Catch-22) in the earliest days of this blog back in November 2009.

In that original post, I reflected on the last great generation of HRM enterprise software, a mainframe generation that peaked in the mid-1980?s. It’s a generation of market leaders that most of my younger colleagues (and that now includes almost all of my colleagues) have never encountered because they were wiped off the charts by SAP R/3, Oracle EBS, PeopleSoft, Lawson, Ultimate, and a huge burst of various niche HRM applications when the industry shifted from mainframe to client server in the late 80?s/early to mid-90?s.

But it’s worth noting that many companies are still running on these first generation HRM packages and are being supported by their third, fourth, fifth or later owners, collecting those maintenance fees and trying (in some cases succeeding) to provide some level of functional and technical enhancements — until they turn out the lights!

It’s all coming home to roost

Then late last year (December 2010), I wrote again on this subject, but this time I was describing how much of today’s most widely implemented, client server converted (not re-imagined and rebuilt) to Web-based, HRM enterprise software was itself about to become yesterday’s news.

This post is worth a re-read, not only because it’s a pretty good short history of HR technology, but also because it makes a number of observations about what’s to come and names names. One company mentioned in that post, Spectrum, has already disappeared into Epicor, which has plans to bring Spectrum up to the standard of Epicor’s own technology.

This is a far cry from SaaS InFullBloom, but it could give Spectrum customers a path forward. Or at least it could have done until it was announced that Apax Partners, a private equity firm, is buying Epicor, folding it into something else, and doing who knows what with any investment plans for Spectrum.

But most important for this current post is that I wrote in the earlier one, although I had already tweeted this point a few times, that I believed strongly that Harry Debes’ (Lawson’s CEO) wrong-headed stand against true SaaS was a major detriment to his firm’s having an independent future. And now it’s all coming home to roost.

Lawson Software CEO Harry Debes
Lawson Software CEO Harry Debes

Lawson will likely be acquired by the only offer-to-date — Infor, known in many circles as a (but by no means the only) ERP graveyard. This is where old software goes to die, to be milked for its installed base’s maintenance revenues with only modest, ongoing upgrades, doing just enough to retain that installed base.

I could be very wrong, and I surely hope I am. Perhaps Infor is cooking up the next generation of ERP in their labs, thus providing Lawson customers with more than just a way forward. But thus far I haven’t been able to find any concrete evidence of this or even any such speculation. There’s been a ton of commentary on Infor’s offer (see the longer version of this at In Full Bloom for a list of some relevant items), but my own take is that this is a done deal.

Enwisen acquisition was a good move, but …

There’s always the chance of another offer, and IBM would be an obvious choice if they wanted to be in the ERP business given their long-standing relationship with Lawson. But there just aren’t any signals from IBM that they’re interested in having an ERP on offer, let alone one that’s needs considerable investment.

My heart goes out to the HCM product team at Lawson, to folks who have done a very good job under tough circumstances, folks who could have innovated a lot more aggressively if they hadn’t been up against Mr. Debes’ misunderstanding of the generational shift to true SaaS. Their acquisition of Enwisen was a very smart move, but I have to wonder if Infor will value and be able to retain the subject matter experts who are critical to the maintenance and use of Enwisen’s personalized content.

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My heart also goes out to Lawson’s customers who, not unlike PeopleSoft’s customers before its acquisition by Oracle in 2005, signed up for the long haul with a known leadership team and then found themselves with new owners whose modus operandi was quite different.

Oracle has put out two major releases — 9.0 and 9.1 — for PeopleSoft in the 5-6 years since they acquired that company, and 9.2 is being discussed for 2012, but there sure as hell won’t be a 10.x. If Lawson disappears into Infor, I fear that its very competitive (in their target market) HCM products will suffer a fate to that of PeopleSoft, getting periodic functional enhancements (but not at true SaaS speed, which is increasingly important in today’s high speed environment) but not the level of investment that’s needed to innovate architecturally, re-imagine HRM, or to be a leader in some of the newer HR technology capabilities.

A lesson for HR and their orignizational peers

There’s an important lesson here, and one that all HR leaders and their organizational peers should heed. If your HRM business applications vendors aren’t pushing themselves and you every day to seize that next generation of technology — to seize SaaS InFullBloom right now – then they may well be destined for tomorrow’s software graveyards.

Even if they’re doing a great job of bringing you the functionality you ask for and want today, if your HRM software vendors aren’t operating at true SaaS speed, moving their products quickly to true SaaS (which is table stakes in 2011), they may well lose momentum, and that’s the kiss of death for a publicly traded or investor-financed company in a market that values momentum above most everything else. With the big Mo, they and their customers are at serious risk of becoming the next Lawson.

I hate that this proud company, with an important legacy of industry focus, strong HCM products, and management integrity, may well disappear into Infor — a very sad ending indeed.

In the spirit of full disclosure: much of my work is with software vendors, and I’ve had a hand in many next generation products beginning way back with that first generation of mainframe HRMS and continuing up to today’s stealth projects whose results won’t be seen for another year or more.  Lawson has not been a client, but I have had a long-standing and valued relationship with their HCM product team.

A longer version of this originally appeared on Naomi Bloom’s blog, In Full Bloom. Reprinted with permission.

Naomi Bloom is the leading independent voice, business/platform strategy consultant and thought leader in the HR technology/HRO industry. She has acted as a change agent and HRM delivery systems strategist/coach for global corporate and Federal agency clients, an advisor on business strategy and product/service design to several generations of HRM software vendors and HR outsourcing providers, and a provider of competitive insight and due diligence for the investment community. You can read Naomi's blog In Full Bloom, and follow her on Twitter at http://twitter.com/infullbloomus.

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