Enterprise System Spectator blog: ERP and enterprise system vendor evaluation, selection, and implementation.

The Enterprise System Spectator

Thursday, September 01, 2011

Kenandy: A New Cloud ERP Provider Emerges from Stealth Mode

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.

Kenandy's Angle

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.
  1. 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.

  2. 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).

  3. 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.

  4. 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.

  5. 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.

Related Posts

Workday pushing high-end SaaS for the enterprise
SAP Innovating with Cloud, Mobile, and In-Memory
Plex Online: pure SaaS for manufacturing
NetSuite a viable alternative for SAP customers?
Workday: evidence of SaaS adoption by large firms

by Frank Scavo, 9/01/2011 08:40:00 AM | permalink | e-mail this!

Subscribe!

 Reader Comments:

ERP systems tend to be horrible kludges of ideas from the 1960's through now. They have at least 10 times more complexity and code than they need. Are any of these newbies really rethinking (as, for example Workday is doing for HR)? (I do not work for workday, by the way...)

I see Kendandy is doing fast MRP in memory, which is better than nothing, but that was also available in the 1980's and MRP has not been rethought fundamentally since the 1970's. I mean the whole planning process in ERP systems is unworkable in today's world.
 
I guess the complexity with legacy and most current MRP systems is due to technology: you have to run MRP in an implementation that is procedural code on top of a relational database, all in all a headache to maintain.

Change happens when you cross-breed multidimensional, in-memory, columnar or hybrid datastore / calculation engine with MRP - 'code' is pretty basic but the power is immense. So you can't avoid the in-memory part.

Doing things simple is the hardest thing in the world. Show me a on-premise _simple_ MRP/manufacturing and I can tell it is possible as SaaS. So far I have hard times fitting MRP and simple into the same picture.

MRP has been 'rethought' several times - OPT, APS, SCP, IBP to name a few, but I am not sure if this is what people need.
 
@Arein agree: "hard time fitting MRP and simple into the same picture".

New technologies, were tried before. I2 etc. More to try, low latency web, columnar datastore, Cuda.

But probably not what people require, some how social needs inserting into the process without the complexity of reams of exceptions. SocialMRP?

BTW - Super coverage by Frank, exciting times.
 
Arein and Clive, thanks for the comments. My own view is that MRP, APS, SCP and *all* of the resource planning tools are good--each in their own place. That's true whether on-premise, or in-the-cloud (those are just deployment options).

The problem, however, is that vendors promote, and customers buy, tools that may not be appropriate for a given scenario. And the sophistication of the tools is quite often NOT matched by the sophistication of the customer. So, the tool eventually becomes shelf-ware, and the customer goes back to informal systems, spreadsheets, etc. And the tool gets a bad name.

This has been a problem since I first started with manufacturing systems in the late 1970s (remember COPICS?). Cloud doesn't change that one iota. In fact, it might make it worse as these tools become cheaper and easier to buy.
 
I would add that end users are disempowered by highly automated systems - no matter how intelligent the end users. Reliance is shifted onto the system and the small group of technical experts who maintain it. While there are benefits, the major drawback is loss of agility - an organisation's ability to react to changes in market conditions.

Given the amount of change we have seen in the past 20 years, this is a major issue. I think it better to invest in training end users so they can operate a lesser-automated yet more flexible system within which they can adapt their operating practices, rather than having them submit a mini business case every time they need to have the system changed to accommodate a new or changed requirement.

In fact, designers of traditional enterprise systems, and managers within their customer base, have applied over-zealous risk management in an effort to protect organisations from the hands of their own staff, but have paralysed their operations in the process.

My hope is that KenAndy can deliver a system which is easier to use - and easier to change.
 
Having also been in this space for about 40 years, and an APICS Fellow for 30 years, I was under-whelmed looking at the 22 minute demo on YouTube. While the concept of Cloud is catchy, what makes anyone think that (1) the same end users that refuse to use their current ERP Mfg systems will suddenly adopt this one, (2) that a shockingly simple set of function/feature will satisfy any mfgr larger than a very small and simple mfgr, and (3) what larger enterprise is suddenly going to allow 'end users' to take over (as happened with CRM) and run with mission critical data such as BOM's ... where are the "adults" in this picture? I didn't see anything in the way of system controls other than the simplest of PO approval methods. Cloud is often sold by sales reps end-running IT and going direct to business users to buy a subscription. That happened in CRM, and to some extent with HCM with very angry line of business users stuck with very old software, but can it happen with the heart of your enterprise?

And where is the data collection coming from? Are bar code scanning / data collection firms suddenly feeding the cloud? It looked like everything needed to be keyed in, although the screens were pleasing and nicely laid out.

Maybe I've been around full featured ERP Mfg too long. I was hoping this might be something like ASK, but I don't see it yet.

I agree with all of you that this is potentially a huge market but when I visit mfgr companies and see a near total lack of knowledge concerning "MRP", PLM, enterprise Quality Mgt, Lean practices, even accurate shop floor control ... I'm not convinced that a sexy, social Cloud front end is going to make the key difference. I'd love to keep this conversation going.

btw - I'm not the previous anonymous poster.
 
ERP Opinions,

Consider that tradition products have much more functionality than most organisations need. These organisations are often forced to make their business processes much more complex than they need to be - or ought to be. The complexity all too often fails to translate into benefit - and imposes an unnecessary and large amount of master data management.

Kenandy is a young product, but if functional extensions can be easily build, gaps can be closed at lower cost. And furthermore, only what the organisation needs it built and imposed.

My own view is that the traditional vendor products (not necessarily the vendors themselves) will collapse under their own weight or stagnate while newer and more nimble approaches circle it.
 
Post a Comment
 

Links to this post:


 

Powered by Blogger

(c) 2002-2014, Frank Scavo.

Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.

About the Enterprise System Spectator.

Frank Scavo Send tips, rumors, gossip, and feedback to Frank Scavo at .

I'm interested in hearing about best practices, lessons learned, horror stories, and case studies of success or failure.

Selecting a new enterprise system can be a difficult decision. My consulting firm, Strativa, offers assistance that is independent and unbiased. For information on how we can help your organization make and carry out these decisions, write to me.

For reprint or distribution rights for content published on the Spectator, please contact me.


Go to latest postings

Custom Search

Join over 1,700 subscribers on the Spectator email list!
Max. 1-2 times/month.
Easy one-click to unsubscribe anytime.

Follow me on Twitter
My RSS feed

AddThis Feed Button


Computer Economics
ERP Support Staffing Ratios
Outsourcing Statistics
IT Spending and Staffing Benchmarks
IT Staffing Ratios
IT Management Best Practices
Worldwide Technology Trends
IT Salary Report

Get these headlines on your site, free!


Awards

2013 Best ERP Writer - Winner

Alltop. We're kind of a big deal.
 
Constant Contact 2010 All Star Technobabble Top 100 Analyst Blogs


Blog Roll and Favorite Sites
Strativa: ERP software vendor evaluation, selection, and implementation consultants, California
StreetWolf: Digital creative studio specializing in web, mobile and social applications
Vinnie Mirchandani: The Deal Architect
Si Chen's Open Source Strategies
diginomica
CISO Handbook


Spectator Archives
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
September 2012
October 2012
December 2012
January 2013
February 2013
March 2013
May 2013
June 2013
July 2013
September 2013
October 2013
December 2013
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
November 2014
December 2014
Latest postings