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PowerPlex 2014—Manufacturing of the Future, Now
PowerPlex 2014—Manufacturing of the Future, Now
July 22 2014
As a prologue, the following were the major news announcements at
conference in Grand Rapids, Michigan:
Jason Prater, VP of product development, talked about the new
Plex Finite Scheduling
module (based on work centers, resources, and material availability; configurable; with constraint reports and what-if planning) and the
currently with menu-notifications, document control, and the
business intelligence (BI) portal (with embedded
The launch of
Plex Enterprise Edition
, with the first component, Financials, available now, and the Supply Chain component (global order management and purchasing) coming later in 2014; the Enterprise Edition also includes regional add-on packages (e.g., Brazilian and EU tax, global label printing)
Unveiled last year, the
new F5 user interface
(UI) has now been delivered, but users can still keep the “classic” Plex UI by not turning on new capabilities, if preferred. Jerry Foster, CTO, also
demoed Google Glass use
on the expo floor. The wearable solution is still in the lab, as well as
for tracking in-transit inventory via Bluetooth.
General PowerPlex Observations
The general feeling at the conference was that Plex Systems is becoming more marketing savvy and bigger sales- and popularity-wise. There were 900 attendees at PowerPlex 2014, requiring a proper conference center as the venue as it is no longer possible to fit all of the attendees in a large hotel conference room like in past years. Visual artists from
were everywhere, cleverly capturing the keynote (see Figure 1), major breakout sessions, and customers’ impressions about the vendor and its cloud enterprise resource planning (ERP) offering. The
market influencer’s world
were there as well, and one day Ray Wang from
hosted the “Plex Hangout,”
an interactive ESPN College GameDay-style show featuring interviews with various customers, Plex executives, and other analysts in a relaxed lounge setup.
– PowerPlex 2014 Visual Keynote
But what hasn’t changed at PowerPlex is the familiar Midwestern/Rust Belt down-to-earth customers, although many of them now feel that what they are doing today is already cool and avant-garde (the future “next big thing” for others), and thus they no longer feel like inferior provincials. Role-based sessions (60 in total, 39 by partners and customers) continued like in previous years—with food and beverage (F&B), motor vehicles, and aerospace and defense (A&D) industry tracks, and operations management, supply chain, production/plant floor, finance and HR, and platform and technology session. The platform and technology session was quite packed, interesting given that the general idea is that one does not need IT staff for cloud ERP deployments. Some Plex customers who are IT managers have told me that they still need some IT staffers to do special reports and some SQL database procedures, but they also multi-task, i.e., they also do Web site development, campaigns, etc.
Plex customers still maintain that cloud ERP costs are lower for them than on-premise investments even in the long run (typically by 15%, but some cite even much higher savings). The fact that
Plex Manufacturing Cloud
is available for an unlimited number of users per site (including external partners) is probably the major reason for this and the vendor’s differentiation in the market (no nickeling and diming customers via new named users). There are three tiers of product subscriptions: base, intermediate, and enterprise, all editions allowing unlimited numbers of users.
PowerPlex 2013 Promises Delivered
Last year, Jason Blessing was a brand new CEO when he addressed the somewhat uneasy audience at the time (understandably wary of impeding changes), and he gave them some promises. This year, with his new team formed (and still forming), he felt much more confident and “in the know” about his company and customers. He said that he had delivered on his previous promises regarding Plex’s cloud leadership, research and development (R&D) investment, and improved customer experience.
were the main conference themes, introduced last year and proven this year. The
) now has 6,000 registered users, and a few users have already provided over 100 useful answers to posed questions.
Growth is the lifeblood of a software company, and in this regard Plex is doing well—the company had 66 new go-live customers in 2013 (see Figure 2).
SAP, Oracle, QAD, Epicor, Infor
, and other older ERP product instances were mentioned as the replaced ones. More and more customers are happy to provide reference calls to prospective Plex customers. Currently, the vendor has over 400 corporate customers at more than 1,100 sites and divisions, and 400 employees, a number constantly increasing as the vendor is aggressively hiring. There was a brand new $50 million (USD) investment by
announced on the eve of the conference. Plex is no longer a bootstrapped company, with committed investors
and Accel ready to remain there for several years.
– New Customers
Blessing emphasized the fact that this cash infusion will go towards further growth and innovation. Each and every Plex customer is on the latest version (single code), which is hardly ever seen in this market, but the product’s architecture allows customers to turn new features on and off as desired, as well as to configure and personalize the system. In the last 12 months, there were 2,500 new features, 1,700 of which were customer-driven enhancements, while the Plex Manufacturing Cloud had 99.986% uptime performance. Some of those enhancements were packaged integrations to popular third-party products, financials/taxes for Brazil and the E.U., the aforementioned new finite scheduling module, and global label printing.
Putting Structure in Place
Until about a year ago
, Plex was basically a victim of its own success, as success was chasing Plex rather than the other way around. Given that customers had kept coming via word of mouth for years, though it had been in existence for over two decades Plex had no established professional services, partnerships, or educational services until 2013. In addition, as customers kept developing Plex’s product via requirements, there was no product manager and strategic roadmap at the vendor’s helm. That has dramatically changed since last year under Chris Bishop, VP of global services and support. Plex customer service delivered the 66 go-lives in 2013, and the vendor now offers tiered support options (classic, silver, gold, and platinum). Bishop could also report on the delivery of the community, customer care, education services, and measurements of customer satisfaction that Plex closely monitors (see Figure 3).
– Plex Customer Care Tag Cloud
The Internet of Making Things
Plex has long been on the plant floor and able to monitor devices and sensors as well as use ruggedized mobile devices. But, the advent of cloud computing, the rise of the Internet of Things (IoT) (bringing new intelligent materials and digitized devices to the supply chain), and innovation in manufacturing (traceability/quality, productivity, and speed/agility) have enabled Plex to tackle the “Internet of Making Things” (see Figure 4). For many Plex customers this means that they are already doing those things that are “the next big thing” for many other manufacturers. Given that the IoT goes hand in hand with big data, Plex has been looking at leveraging some tools in the future, including
SAP HANA, Hadoop, Microsoft SQL Server
, etc. (no decision has been made yet).
The move from solely customer-funded product development to Plex-funded (strategic) development is both a big risk and reward for the company. Customer-funded R&D is shrinking in relative terms to total R&D investment. But strategic product development by Plex, such as the aforementioned Plex Enterprise Edition with global finances capabilities, as well as the prospect of new functionality from Plex jointly funded by a group of interested customers (such as the finite scheduling module, developed in collaboration with a gear manufacturer customer, or Brazilian tax regulatory support, which was done with Invensys and Inteva) could bring big rewards for the company.
– Manufacturing ERP Trends
Plex’s Expansion Prospects
Plex believes that it can grow at a healthy rate just by better penetrating its existing market and industries: automotive, A&D, and F&B. Some potential new industries with similar requirements could be medical devices, packaging, high-tech/electronics, and distribution (the latter only if it comes as a requirement from manufacturing customers, Plex is not really a pure distribution ERP product). Currently, Plex has only about 18 sales employees, and it plans to have 30 by the end of the year. The expansion can also come from existing customers going for more new modules (e.g., the aforementioned new finite scheduling module) and opening new plants. For example, Inteva Products has doubled in size since selecting Plex, with seven new plants in 2013 and seven more planned for 2014. Figure 5 shows all the Plex customers that have lately expanded their engagement with Plex.
– Plex customers that bought new capabilities
But a major remaining question is as follows:
is now over $500 million in revenues… what should Plex do to get to at least $200 million? Even if the company wants to acquire some company against its purely organic track record thus far, what major cloud player would they acquire? It’s not like it’s viable to acquire some legacy on-premise ERP and force everyone to go to cloud (let alone be distracted with maintaining the legacy on-premise customers)? It is much more likely that Plex could acquire some “tuck-in” cloud solution, e.g., a formula management product (if there are any available in the cloud). Alternatively, the vendor might acquire some regional reseller businesses including partners, e.g., former
ERP resellers in China.
For now, Plex is not interested in a platform as a service (PaaS) play, given that there is an abundance of PaaS offerings in the market. On the other hand, a barrier to entry in manufacturing cloud software is huge, given the dearth of true plant-level cloud solutions.
While Plex has strong plant-level HR and workforce management (WFM) capabilities, it will partner for global/local payroll capabilities and human capital management (HCM). The situation is similar for customer relationship management (CRM), given that the market has already been won by a few cloud CRM vendors. In the past, Plex has not been the easiest company to partner with, as there have been complaints by some partners about the vendor insisting on partners developing solutions with Plex’s look and feel. That might be changing now with the impending start of a new seasoned partner alliances person, Tina Holm, who was
just hired and officially introduced
Plex Systems’ new management seems to have put the necessary pieces in place, and the company seems poised for more growth and innovation. Only time will tell whether that pace of growth will be sustained consistently over the years to satisfy its current investors’ interest in nurturing their asset.
Cloud ERP’s Plex Has Record 2013, Aims Higher for 2014
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