Adonix Expands X3 And Its "French Connection" Part 2: The Future

Event Summary

Adonix (, a privately held French enterprise applications provider for mid-sized manufacturing and distribution companies, has recently unveiled its significantly enhanced latest product release. Adonix X3 Version 1.3 enterprise resource planning (ERP) suite has reportedly been completely rebuilt to give users Internet access to system functions, eliminating the need for costly, complex installation of a client interface. In other words, the company joins the "no code on the client" mantra proponents. The new version also enables companies to extend Adonix X3 business transaction and inquiry functions to their Web sites, making it easy to connect to customers, trading exchanges, and key business partners. Adonix Xtend uses industry standard middleware, eXtended Markup Language (XML) technologies, and Adonix APIs (application programming interfaces) to create the connection.

Adonix has also broadened the scope of its traditional back-office enterprise applications -- manufacturing, distribution and accounting -- by integrating front-office applications, including CRM, customer service, and product configuration into Adonix X3. New CRM functions help customers manage sales opportunities, sales contacts, and marketing campaigns. New customer service features are the ability to track repair parts, manage service calls, and maintain a knowledge repository to assist help desk personnel resolve customer issues. The Product Configuration module features a rules-based engine that allows building customized products to match customer's exacting requirements.

Adonix believes that its product offering exhibits superior features and capabilities than most of its peer mid-market competitors' products, particularly in terms of scalability, flexibility/configuration, multi-national capabilities, multi-site capabilities, and the support for many platforms (UNIX and Windows NT/2000, using Microsoft SQL, IBM DB2, and Oracle databases, both through the Windows- and browser-based client).
This is Part 2 of a two-part Event Note. This part continues the Market Impact and makes User Recommendations.
Part 1 discussed the company's background, market strategy, and the Adonix X3 product.

Market Impact

One may expect a substantial recurring revenue stream or a new license opportunity from this large installed base from, e.g., former Prodstar product and older versions of Adonix. (See Part 1 for details)

One of the biggest Adonix' trumps is its per-seat pricing structure that suits small cost-conscious, risk-intolerant manufacturers and distributors, which often want to pay a fixed price for a solution, whatever the functional scope and implementation timeframe of their projects may be. To that end, Adonix prices its software (including all modules with only three add-on exceptions: finite capacity scheduling, product configurator, and assets management) $3,500 per seat in the US. The number of users per client varies significantly (from eight seats to more than 100 seats), leading to an average deal size of 20 users. As the company prides itself on fast implementations (3 - 6 months) and on implementation costs being within 100% - 200% of software license costs (120% on average), it does not take a rocket scientist to calculate that most of projects cost in the range of $50,000 - $500,000. The price tag might be attractive even in the current era of reduced IT budgets.


Still, limited financial resources to adequately fund multiple key strategic initiatives, undeveloped global channel and brand recognition, and formidable competition within the market of Adonix' future expansion focus (particularly the North American market) are the challenges the company has yet to overcome.

The company has another predicament to solve, as the conglomeration of Adonix legacy applications over 3,500 customers, many of whom need to upgrade mainframe applications to newer architectures. Although Adonix is targeting these as well, it is dubious whether the new X3 product can meet the demands of larger corporations among this installed base that continue to rely on the legacy applications. Adonix' focus on mid-market will not fly with these companies, where it will have to overcome the market perception of a "small unknown ERP vendor". Incidentally, the company has to be careful not to spread its development resources too thin trying to maintain its multiple platform product configurations, although the trend for its target market is towards the Microsoft technology.

Further, X3's functionality across the board, although broad (to include process manufacturing as well) and well balanced, has not been recognized as a differentiator in the market as the company does not exhibit much of a vertical focus except for the above-mentioned distribution modules. To that end, Adonix should develop templates, wizards and implementation methodologies to further decrease the time and expense of implementation projects, as well as to vertically incline its product offering. Also, it should enhance a base of referenceable accounts from the 450 companies that have purchased X3 so far. A dozen sites in the US might be insufficient to boost brand recognition and make a go of the North American market. Internationalization requires significant investment. Adonix, with its limited R&D funding compared to the bigger players it will likely compete against, has to beef up its indirect channel, possibly with some high-profile partnerships.

User Recommendations

Adonix' target market, general multi-site and multi-national distribution and manufacturing companies and their divisions with $30 to $300 million-a-year revenue range and up to 100 concurrent users per site, should consider the company's value proposition, but avoid selecting it without looking at what the other vendors have to offer. Adonix often comes ahead of larger global players in terms of functional fit, pricing, and understanding of the local requirements in the distribution area. Like enterprises in France or Southern Europe (especially Spain and Portugal) should short-list X3. However, customers outside Adonix' successful geographies may want to do their due diligence and check Adonix' regional support before moving forward.

We generally recommend including Adonix in the long list of vendors considered for an enterprise application selection by the lower-end of mid-market companies. These companies generally are rapidly growing and agile, but have a limited IT budget/staff, a conservative IT strategy, and less complex manufacturing, CRM and B2B e-commerce collaboration requirements.

The industries that would most likely benefit from using its products are discrete and process industries with standard manufacturing and extensive distribution requirements such as CPG, wholesale, retail, chemicals, industrial & commercial machinery, electronic & electric supplies, furniture, rubber & plastics, etc. Existing users of earlier product releases may benefit from querying the company's future product development, product migration path, and/or service & support strategy.
This concludes Part 2 of a two-part note on Adonix.
Part 1 discussed the company's background, market strategy, and the Adonix X3 product.

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