There's news for those of us interested in manufacturing ERP: a new cloud ERP provider is having its coming-out party this week at Dreamforce, the annual user conference of Salesforce.com. Kenandy
, which is built entirely on Salesforce.com's platform, provides core manufacturing functionality, such as inventory, shop orders, purchase orders, and material planning. Founded in 2010, Kenandy already has one customer live and a handful of others sold and in implementation.
Early this week, several people forwarded me advance word on Kenandy from a Wall Street journal blog post
. Normally, the launch of a new cloud provider would not warrant this kind of attention. But this launch has an interesting twist: the brains behind Kenandy is none other than Sandra Kurtzig. She is the original founder and CEO of ASK Group, the developer of the well-known ManMan ERP system--more or less the SAP of the 1980s. She retired something like 10 years ago, but was convinced to come out for an encore by Marc Benioff, CEO of Salesforce.com and her neighbor on a beach in Hawaii. Kenandy has venture funding from Kleiner Perkins Caufield & Byers, and its managing partner Ray Lane sits on Kenandy's board.
I scored an interview with Sandra and her CMO Rod Butters yesterday, prior to Sandra's appearance on stage with Marc Benioff this morning at Dreamforce. I had a lot of questions for Sandra, and she was forthcoming with answers.
- Kenandy is positioning itself for small and midsize manufacturers ($15M - $300M), especially those that source, manufacture, and distribute products through contract manufacturers and channel partners. Sandra noted that ERP vendors with systems designed in the 1970s and 80s (such as ManMan) assumed their customers were vertically integrated. Her perspective is that this orientation has carried forward in the design assumptions of the leading on-premise ERP providers today, which have their roots in systems built during that time period. This is not a good assumption today, as even small and midsize manufacturers are contracting large parts of their operations offshore and have complex distribution relationships with channel partners. Such organizations need an extended ERP system, and Kenandy is being designed with these scenarios in mind.
- Built on Salesforce.com's platform, Kenandy is a full multi-tenant SaaS offering. An organization can run multiple facilities within a single tenant, or it can set up multiple tenants, for its contract manufacturers or business partners, for example, and gain inventory and production visibility up and down its supply chain. (Disclaimer: I have not evaluated Kenandy on any functionality points to confirm these features).
- Kenandy expects very short implementation times. Its first customer, Den-Mat, a maker of dental products, went live in two weeks, converting from a legacy IBM Series i (AS/400) system.
- Kenandy is focusing on manufacturing functionality and depending on other cloud providers to fill out other parts of the enterprise suite. For example, there is integration (of course) with Salesforce.com for CRM, and with FinancialForce.com for financials. In addition, Sandra claims that integration with customer's legacy systems (e.g. Quickbooks) are always an option.
- Development of Kenandy is being led directly by Sandra: in other words, she is not only the founder and CEO. Like many start-up software firms, she is also the brains behind the product and the chief product management executive. She is working with a small group of internal developers and is supplemented by development resources from Persistent Systems in India.
I also took a walk to the Expo floor and got a quick view of Kenandy's system. I also met the "Ken" of Kenandy. (The firm is named after Sandra's two sons, Ken and Andy).
A Market with Lots of Open Space
I am currently working on a research report on cloud-based ERP systems, so I was quite interested in seeing a new competitor emerge in this market. In my view the market is wide open. There are only a handful of pure multi-tenant SaaS ERP providers, and even few that can support the needs of manufacturers. These providers include NetSuite, SAP's Business ByDesign, Workday, Plex, and Rootstock.
Compare this to the dozens or scores of ERP providers that we could choose from in the 1980s and 1990s. Today the market for traditional on-premise ERP systems is dominated by two vendors: SAP and Oracle. Microsoft occupies a strong secondary place, especially in the SMB space. Many of the other players have been acquired by Infor and Oracle, though several good providers, such as IFS, Epicor, QAD, Syspro remain independent.
Nevertheless, the broad industry trend is moving to cloud computing, and manufacturers that want full-suite ERP in the cloud have few choices. Therefore, the market is wide open. As I mentioned to Sandra, it's like the Pilgrims landing at Plymouth Rock. There is a whole continent waiting for anyone so inclined to stake a claim. There's no need to argue about property lines with neighbors. Just go out, pick a few verticals, geographies, and organization sizes, and build out your offering. There is plenty of room to grow.
Other providers are already doing so. Plex
was first out of the gate, with a full cloud-based ERP offering dating back to the middle of the last decade, and they continue to gain momentum. SAP's launch of Business ByDesign
is also gaining traction, not only in subsidiaries of SAP's traditional large customer base, but in net new SMBs as well. Rootstock
, not as well known, has a credible offering for manufacturers (especially project-based) on NetSuite's platform, and it has now migrated its manufacturing ERP offering to Salesforce.com's platform. Moreover, other on-premise vendors, such as Epicor and Infor, have enabled their products to operate in a multi-tenant cloud deployment model.
But there are large swaths of open space. Kenandy is a welcome new player.Update, 10:02 a.m.:
Sandy is on stage now at Dreamforce. She's wearing a button with the letters ERP crossed out. Marc asks, "Your previous firm ASK built on HP's platform, right?" She jokes, "Is HP still in business?" Ray Lane, an HP board member, is standing next to her. Sandy mentions Salesforce.com's investment in Kenandy. Ray, as mentioned in my post above, is also an investor, and now relates the story of Sandy showing up in Ray's office, asking for money. Ray, who like Sandy, is well over the median age at Dreamforce, admonishes the audience, "Don't think our generation is through yet!"Update, 10:20 a.m.: Dennis Howlett
looks at manufacturing cloud ERP developments.Update, Sep. 6:
Dennis Howlett interviews me live about my thoughts on Kenandy. Click on the image below to watch the interview.
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