Lawson CEO: Landmark Looks Enormous

Q&A: CEO Harry Debes speaks on the company's ERP rivalry with Oracle, its choice of IBM middleware and the potential of its development platform. Is Lawson Software back from the brink?

/zimages/1/131944.jpgLawson Software was, for a brief shining moment, a company poised to take over the world—or at least become a major force in the ERP (enterprise resource planning) market, picking up where PeopleSoft left off after it was snatched up by Oracle in early 2005.

But that reality never came to pass. Between 2002 and 2004 Lawson had some code difficulty with its Lawson 8 platform—Lawson 9 was released in March—and its stock price faltered. Then, last June, Harry Debes took the reins as president and CEO at the same time the St. Paul, Minn., company announced its intended acquisition of Intentia—a deal that has been slowed by regulatory conditions, but is expected to finally close April 24.

Debes is slowly, quietly working to turn the company around. Lawson just released its first SOA (service-oriented architecture) application, built on Landmark, the companys next-generation development platform. The Intentia acquisition will bring application functionality in manufacturing and a global reach.

Debes sat down with Senior Writer Renee Boucher Ferguson on April 10 at the companys annual CUE conference in Orlando, Fla., to talk about where Lawson has been and where its headed.

During the whole Oracle and PeopleSoft battle, Lawson seemed poised to fill the gap left in the midmarket, but somewhere along the way the company faltered. What happened?

A lot of people thought Lawson might become next the victim of Oracle, so a lot of people who might have selected us thought, What is that going to mean to me? Oracle salespeople used that to their advantage. Even today, they send letters to our prospects, saying, Were going to buy them and put them out of business. Someone always sends us the letters.

At the same time, the Oracle bid for PeopleSoft was so low that it was ridiculous. We made the claim at the time—I was there—that if this was strictly done with our transaction [it would affect] our ability to conduct business.

And we had evidence. During the discovery [phase] of the trial there was access to all those internal e-mails between senior management at Oracle. One actually said, Even if we dont go through with this [acquisition of PeopleSoft], launching the bid against them will screw them up badly.

I suspect Lawson became victimized to some degree. Then quarters, and a year goes by, and it looks like Oracle is not going to acquire Lawson, they have their hands full with projects, and so, we re-established [our]selves. Customers can only put things off so long.

Has the acquisition of PeopleSoft impacted your business positively? How many converts have you had replacing PeopleSoft with Lawson?

Last quarter, there were two that we mentioned. Every quarter, there are several deals we take away. Wal-Mart was one.

Wal-Mart is definitely not midmarket. Has your focus changed?

No. Every once in a while, heres what happens … a large company like Wal-Mart identifies a functional area where our software fits. Our sales rep doesnt even call on them.

In this case, Wal-Mart called us. [A Wal-Mart executive] hid their name badge and spent an hour in our [conference] booth. But Ive worked with them in the past, so I said we will not change our road map, pricing deals, license deals. We wont go there. If they like what we have out of the box, fine. If not, well take ourselves out. But we achieved the benchmark they set for performance. Now there is an opportunity to do so much more.

Whats different about your relationship with IBM now, versus two years ago when Lawson had a relationship with IBM?

In past, the technology layer from Lawson was a proprietary layer. We had cobbled together a number of components and tools for the technology layer upon which our applications were built. As time went on we found that layer of products [was not supportable]. We couldnt stay competitive with it. Others, IBM, SAP, Oracle, BEA … were spending hundreds of millions in developing robustness and scalability—all things we needed to do but we simply couldnt keep up with. For our smallest customers, that was ok. But for our largest customers, that was not good enough.

We needed a better portal, stronger middleware, so customers went out and acquired, so we had a mixed bag. We had a nightmare in trying to figure out a whole new bundle, so we had to take a very hands-off approach [to support]. But the customers were thinking, I have a system here, I need someone to surround me with love and affection.

But whatever it is youve got—BEA, TomCat, we didnt know, so we figured, lets find some middleware that we believe is world-class, so we dont ever have to apologize for it, and that gives customers as many choices as they can possibly make. We didnt want to limit on the database or the hardware platform, theres big investments there … and we wanted a gradual path.

/zimages/1/28571.gifClick here to read more about Lawsons product road map.

We entered into a relationship with IBM, to create stack of middleware that could and would be bundled with our product. We announced it at the last CUE—not that we hadnt worked with IBM before—but I blew it up because the terms werent good. It was a crappy deal for us, financially. IBM came back to us and said, Youre important to us, so we worked it out, reaffirming our affections for each other, and now were off to the races.

Next Page: Landmark could be huge.