Adonix Grows Roots Against The Odds Part 1
Written By: Predrag Jakovljevic
Published On: August 20 2002
Grows Roots Against The Odds
- August 20, 2002
the doom, gloom and despondency news coming from almost all corners of
the world economy and particularly from the tech sector, it may be refreshing
to hear upbeat and enthusiastic plans for the future coming from a relatively
less known smaller vendor.
a privately held French enterprise applications provider for mid-sized
mixed-mode manufacturing and distribution companies, has recently unveiled
its latest product release, Adonix X3 Version 1.34, an enterprise resource
planning (ERP) suite featuring true Internet architecture. The product
is touted as possibly the first web-native ERP solution developed to meet
the demands of the mid-market for inexpensive and universal access to
enterprise applications by remote and mobile users.
new version additionally enables companies to extend Adonix X3 business
transaction and inquiry functions to their Web storefronts, making it
also feasible to connect to customers, trading exchanges, and key business
partners. To that end, Adonix Xtend is a toolset that uses industry
standard middleware, eXtended Markup Language (XML) technologies, and
Adonix APIs (application programming interfaces) to create the connection
of Adonix X3 with customers' storefronts. Adonix Xtend enhances the flow
of business transactions information, giving Web users real-time access
to product catalogs, pricing, stock availability, order placements and
order status information.
Adonix has recently rolled out a new data collection module intended to
help warehouse and shop floor operations by communicating with manufacturing,
distribution and accounting functions. Adonix Data Collection gathers
data directly from automated input devices across operational areas, verifies
its accuracy, and passes data to Adonix X3 for immediate update. It also
controls all prompts on collection devices, manages the entire network
of devices, and ensures that data is saved during system downtime.
on August 2, Adonix and the family-owned group Guillemot signed
an agreement on the purchase by Adonix of the controlling stake in French
financial computer services provider Groupe Abel owned by Guillemot.
The transaction has been carried out at a price of 6.0 euro ($5.9) per
share, and following the acquisition Adonix should own ~55.4% of Abel's
capital and majority (51.3%) of the existing voting rights in the company.
Groupe Abel is listed on the Nouveau Marche segment of Euronext Paris.
reportedly plans to respond to future market changes by continuing to
improve its X3 application, as it did when it had rolled out the earlier
Version 1.3 that allows Internet access to the software system,
and features broadened 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.
in addition to providing traditional extended-ERP functionality within
the X3 software, integrated data collection, barcode label management,
and full implementation services, Adonix also provides data collection
equipment manufactured by leading hardware vendors including Intermec.
Consequently, 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/XP, using Microsoft
SQL Server, IBM DB2, and Oracle databases, both through
the Windows- and browser-based client). Further Adonix uses industry-standard
tools such as XML and Java, together with Adonix API's, that open the
system to communicating easily with business partners, trading exchanges
and other applications and languages.
Adonix X3 can either be implemented as a company-wide business management
system or incrementally to support specific business processes or time-phased
implementations. While the system provides a variety of parameters that
can be set to adapt implementations to the needs of the business without
programming changes, best-practice templates are also available to promote
rapid, timely implementations.
add to good news, another benchmark was achieved in June when Adonix X3
signed up its 500th customer worldwide Texas Feathers, a leading
manufacturer of ostrich feather cleaning products. Adonix X3 had been
sold to 450 clients by the end 2001, including over a dozen clients in
the US. However, since its founding in 1979, the company has grown to
support the combined Adonix legacy applications of over 4,000 instances,
with approximately 100 in the US, including at familiar corporations like
Apple Computer, L'Oreal and Yoplait.
a result of the expansion, the company has recently enhanced its executive
ranks in the US, and is also pondering expanding its US-based staff
a topic not often heard about lately. Alex Attal, the CEO of Adonix North
American operations, joined last December. In April 2002, the company
hired Lucia Ahnemann as VP of marketing and channels. Ahnemann was formerly
CIO of Scient, an e-business consulting and professional services
concern in New York City. Like Attal, Ahnemann is also a former executive
is Part One of a two-part note on recent developments at Adonix. Part
Two will discuss the challenges Adonix faces and make User Recommendations.
might prove that a well-espoused value proposition can bode well despite
a bad economical situation and unfavorable recognition of a newcomer vendor
in some markets. With its main HQ in Paris, France and its US headquarters
in Pittsburgh, PA, Adonix is not a uniformly well-known mid-market global
vendor. Adonix has been changing that situation by increasingly showing
up on many mid-market application selection's radar screens. That has
been particularly true for the North American market, which should remain
an important revenue contributor in the future, since the market accounts
for about 20% of the company's total revenues with $9 million of the $45
million in global revenues recorded in 2001.
the enterprise applications market suffered miserably recently, Adonix
too felt a pinch of less than desired revenue growth, but it was still
ahead of most of its peers while the company remained profitable. While
corporate revenues grew approximately 5% in 2001, license revenues grew
15%, and in the US market, sales of Adonix X3 product doubled, while X3
related revenue growth worldwide was more than 150%. This was a notable
feat, especially when the assimilation of multiple acquisitions and an
ambitious product development strategy combine with the difficult sales
situation. Consequently, the company continues to pour more than a hefty
20% of its revenue into product development. After committing a substantial
investment in fortifying its flagship Adonix X3 ERP offering with new
CRM and data collection capability and to make it both Web native and
a Web Services amenable solution (i.e., XML and Java compliant), Adonix
deserves to be weathering the present down market as well.
its early days, Adonix has made a conscious decision not to target a direct
presence in most foreign markets, and to go for product distribution mainly
through partners/value added resellers (VARs). Adonix X3 is currently
sold in 18 countries. A direct subsidiary handles sales in the US as well
as in France, Italy, Portugal, and Spain , while resellers and distributors
sell Adonix elsewhere. This has traditionally proven to be advantageous
to mid-market customers by allowing Adonix to keep their costs down. Further,
selling through partners requires a higher quality of product support,
and accompanying documentation.
deliberately steering clear of the too ambitious expansionist policies
that have hindered and/or badly hurt so many smaller software companies
in the past, and by focusing on a handful of core markets, Adonix has
managed to keep itself on a healthy track. Also, direct and indirect channels
that have already been built in targeted countries have helped the company
with product translation and localization issues, which have in turn resulted
with solid multi-national and/or localization capabilities of the product.
has recently combined its established finance and accounting package with
a solid manufacturing system, distribution system, and warehousing management
system (WMS). Its offering would be in the same league with Lilly Software,
IBS, Syspro, and Frontstep, with a possible edge
in broader platform/middleware standards support, stronger multi-national
capabilities and/or wider geographic coverage, often therefore making
it competitive with the likes of Intentia, J.D. Edwards
and SAP. This breadth and depth of functionality provides an attractive
solution for resellers to offer their clients and for those wishing to
adapt the software to their own vertical markets.
additionally provides its resellers with other opportunities designed
to maximize revenues and profit margins, such as:
the entire revenue from services generated from customer implementations
a significant percentage of end-user license fees and annual maintenance
- A license
fee program that is affordable for customers, and easy to understand
quantity discount schedules by user range
Adonix' order winner 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. As the company
also prides itself on fast implementations (3 6 months) and on implementation
costs being within 100% - 200% of software license costs (120% on average),
the price tag appears to be attractive even in the current era of reduced
concludes Part One of a two-part note on Adonix. Part Two will continue
to examine the Market Impact, look at the Challenges Adonix faces, and
make User Recommendations.