Rootstock Software Steps Out on

One of my recent blog posts talked about the emergence of a few natively cloud-based enterprise resource planning (ERP) solutions that leverage’s platform. But looks might be somewhat deceiving here—while the products might be brand new and hosted on the latest cloud architectures, their owners and founders have been around the ERP block a few times before.

Take Rootstock Software’s co-founders Patrick “Pat” Garrehy and Chuck Olinger for example. They each have over 35 years’ expertise building software for complex manufacturing environments (Lockheed, Solectron, etc.). I’ve known them for over a decade, since, prior to Rootstock, they were involved with Relevant Business Systems. That ERP product, now part of Aptean after the recent merger of CDC Software and Consona Corporation (the latter in turn acquired Relevant ERP back in 2006) has had a couple of incarnations within Relevant Business Systems (at some stage also called INFIMACS).

Rootstock was formed in late 2007 by Garrehy and a team of people from Relevant Business Systems. After selling Relevant ERP to private equity firm Marlin Equity (which, incidentally, almost immediately flipped both the Relevant and Intuitive ERP to then-consolidator Consona and its backer Battery Ventures), Garrehy and his team evaluated options for new business ventures. In late 2007 they concluded that software as a service (SaaS)/cloud computing was going to be the dominant method for delivering enterprise applications to business in the coming years, and founded Rootstock.

The NetSuite Episode
Rootstock’s initial cloud offering was built on NetSuite’s SuiteCloud platform and was seamlessly integrated with NetSuite’s own application products. The Rootstock offering was eventually OEM’d to NetSuite and became known as NetSuite Advanced Manufacturing. For some time, NetSuite was enthusiastically promoting Rootstock as its manufacturing module and the Rootstock acquisition was a foregone conclusion by some, but that fairytale romance didn’t last long. We will probably never know the real reasons for the apparent “divorce” between the two software companies.

Apparently, NetSuite has about 12,000 customers in total (and will soon be announcing $300 million [USD] in annual revenues for fiscal 2012). Still, NetSuite can only brag about a few hundred manufacturing customers at best (in my estimate, as the company doesn't break down its customer numbers per verticals), and those are mostly in the realm of light and outsourced manufacturing, not complex manufacturing. Rootstock’s solution accounted for the more complex variety of NetSuite’s manufacturing customers, given some big advantages in how it handles costing and disassembly (repair) processes.

Perhaps there were some indications at the time (two years ago or so) that complex manufacturers might not yet be ready for a rip-and-replace-ERP move in favor of the cloud—having jointly won about 30 customers in a couple of years is not exactly an impressive achievement. NetSuite has thus since written its own manufacturing product, which seems to fit well with its traditionally strong distribution and Suite Commerce offerings.

On its own, NetSuite has gained some of the most complex mid-market manufacturers that are now running on NetSuite after evaluating and on occasion deploying alternative products. Recently, NetSuite has not only continued to enhance its initially light manufacturing offering, but has also significantly added the sophisticated functionality needed and required by advanced manufacturing organizations. Look for a separate article on NetSuite Manufacturing down the road.

Joining the Camp
Since Rootstock’s mission has always been to become the de facto standard for manufacturing ERP solutions in the cloud, it makes sense that Rootstock has begun development on a transformation to the leading cloud platform on the planet –’s In May 2011, became an investor in Rootstock, and in September 2011, Rootstock was announced on the platform. In addition to, the vendor is funded by Cross Atlantic Capital Partners and other investors. This latest investment by Cross Atlantic, in September 2012, in addition to the firm’s participation in previous rounds, demonstrates their continued commitment and dedication to Rootstock Software.

Currently, Rootstock’s development, marketing, and sales efforts are completely dedicated to the community and in bringing new clients into that community. Logically, Rootstock ERP resembles the former Relevant ERP functionality, but has been designed for the cloud. There are some other differences between the older Relevant and current Rootstock ERP offerings; for example, provides the financials and accounting modules for Rootstock ERP (more details about this partnership will come shortly), and Rootstock did not have to waste time on rewriting those capabilities. In addition, Rootstock has only basic work breakdown structure (WBS) capabilities in comparison to Relevant ERP, given that Aerospace and Defense (A&D) is not Rootstock’s target sector.

On the other hand, Rootstock is much heavier in terms of production scheduling, item serialization, and multi-everything capabilities than its former incarnation. The current Rootstock product consists of apps that address the following functional areas of a manufacturing company (see Figure 1):

  • production engineering – the definition of products and control of changes to such definitions, e.g. revision control and engineering change control.

  • sales order management – with seamless integration to’s Sales Cloud (a.k.a., Saleforce CRM) and the ability for a user to bring orders in via electronic data interchange (EDI) or e-commerce, plus user controlled entry of customer orders.

  • inventory management – control of inventory including full lot and/or serial controlled items.

  • material requirements planning (MRP) and available to promise (ATP) – a planning engine that balances demand and supply for the organization based on rules established by the organization.

  • purchase order management – support for purchase of either “direct” materials used in the production of the company’s products and “indirect” materials or services required for operation of the business. The module includes a requisitioning and approval capability to insure enforcement of company policies.

  • shop floor control – includes the definition of the factory’s capabilities (machines, labor force, etc.) and associated capacities, definition of processes and production steps (both internal and external) required to produce the company’s products.

  • scheduling and capacity planning – for work that is to be produced in the company’s factory, Rootstock schedules the activities to be performed and provides a user friendly “drag and drop” schedule board to allow production planners and shop personnel to easily rearrange schedules to meet the company’s commitment to customers.

  • manufacturing cost control – all activities (purchasing, shipping to customers, movement of inventory within the company, production of sub-assemblies and top level assemblies, etc.) have accounting implications. Costs can be set as either standard costs or moving weighted average costs, and are seamlessly integrated with the accounting system of record (a preferred solution is FinancialForce Accounting).

  • project control – for businesses that manufacture to a project and desire to track all associated costs at the project (or complex job) level, the project control capability can be “turned on” and provide a comparison of actual costs to a user-established project budget.

  • multi-company – Rootstock supports an unlimited number of companies, each of which can have one or more divisions (operating units within a single financial entity).

  • multi-division – As mentioned above, Rootstock supports an unlimited number of divisions within a company. Each division becomes a planning and operational unit that can have its own engineering, costing, purchasing, and project control setting independent of other divisions within the company.

  • Product lifecycle management (PLM) integration – for companies that have a PLM or PDM (product data management) system in place and desire to have the establishment of parts and bills of material (BOMs) to be imported and updated from their design system, Rootstock provides standard application programming interface (API) capabilities to facilitate such integration, e.g., with Arena Solutions.

Figure 1

Native Mobility
All Rootstock functionality can be accessed through mobile devices capable of running a Web browser. Operating Rootstock from an Apple iPad using the Safari browser opens up all capabilities of Rootstock from the most popular tablet device on the market. Similarly, Android devices can perform the same functions from the browser of choice. In addition, at the Dreamforce 2012 conference Rootstock recently announced the following three “native iOS” apps for the iPad (more mobile apps will be introduced in future releases):

  • Inventory Inquiry – indicating levels and locations of inventory, plus access to item specs, items graphics, drawings, etc.;

  • Purchase Order (PO) Receiving – real-time access to the “receiving copy” of a PO, ability to indicate (line by line or receiving all lines at once) what has been received, plus the ability to take a picture of the Packing Slip and/or actual product received (e.g. a damaged item) and have this information attached to the specific receiver for history (and in the case of returning to the vendor, proof of damage); and

  • Work Order Picking – via the iPad, the “electronic” pick-list is displayed and guides the material handler to the appropriate stock location, allowing him or her to specify the quantities picked (including lot and/or serial numbers if applicable).

Rootstock Users
Rootstock has contracted with 37 customers to date. Most of these are legacy joint NetSuite customers that will continue to be supported. Ropes Courses, Inc. a company that manufactures, installs and services adventure ropes courses, zip lines, and climbing structures; Miltera Machining Research Corporation, a high precision manufacturing facility; EBARA International, a world leader in the engineering and production of specialized cryogenic liquefied gas pumps and turbine expanders; 1st Light Energy, a leading provider of solar energy solutions, and Astrum Solar, a full-service residential solar provider, have become Rootstock’s first customers. Figure 2 shows the characteristics of a “sweet spot” customer. The indicated industries are furniture and fixtures, industrial machinery, metal fabrications, electronic devices,  etc.

Figure 2

As indicated in Figure 2, Rootstock currently focuses on North American companies and international English language-based companies. The company uses a direct selling team (with its own sales employees) at this time, but it is anticipated that by mid-2013, some select reseller arrangements will be put into place. In late 2013, plans call for translations into Spanish and Simplified Chinese (other languages will be driven by market demand). Using’s platform capabilities, language translations are not that technically difficult.

Best-of-Breed Cloud Ecosystem
Earlier in 2012, Rootstock and established a relationship with Baker Tilly, an established system integrator (SI) with a significant Midwest US presence, numerous successful engagements in the community, and exceptional experience in implementing manufacturing solutions. For those manufacturing companies committed to the Salesforce architecture, combining Salesforce CRM,, and Rootstock manufacturing solutions brings a broad cloud ERP software solution to the’s marketplace  and ecosystem (see Figure 3).

Figure 3

This best-of-breed alliance has the potential to be pretty exciting, as the participating vendors think that the cloud, and more specifically, technologies can overcome some age-old problems for manufacturers. First, the ability to customize/tweak applications easily solves the problem of cumbersome application customization, a big issue for manufacturers of all sizes. Second, the link between sales, service, the shop floor, and finance should be tighter than ever with the combined cloud solution. Customer relationship management (CRM) is still an island at many manufacturing companies today, especially if they use and have an on-premise manufacturing ERP system.

Moreover, social collaboration tools such as Salesforce Chatter and customer portals that come with should allow manufacturers to take a more collaborative approach internally, with customers and their whole supply chain. This is an area where I believe we have all just scratched the surface. And finally, the partnering vendors think the ecosystem approach of leveraging the AppExchange market place will be a winner in the long run. This is completely different than the vendor lock-in approach of the old ERP guard. As these cloud applications mature and the ecosystem builds as we have seen lately, Rootstock thinks manufacturers will start moving in higher volumes.

On the down side, hardly any established manufacturing ERP vendors have been making hay in the cloud yet. Plex Online comes close to that nirvana, but the company is still only at about 600 customers (about $40–$50 million in revenues), even though the company has been in existence since 1995. These figures pale in comparison to Workday, which will reach $300 million in revenues soon, and is only a few years old, but focuses on the services industries. No matter what, this will be an exciting space to watch. We should all have a great view of the action from where we are sitting.

Part two of this blog series will highlight all of these issues and more through a Q&A with Rootstock’s top management. Your comments, opinions, and views are welcome in the meantime.
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