Plex's Growth Strategy: Glass Half Full

Those interested in cloud ERP know that Plex was the first provider to offer a cloud-only manufacturing system. Yet Plex has had nowhere near the growth of other cloud enterprise system providers, such as NetSuite. SAP receives a lot of criticism for only having sold 1,000 or so customers its Business ByDesign system--but ByD has only been in general distribution for three or four years. Yet Plex, which launched its cloud offering over 10 years ago, has fewer than 500 customers.What's wrong with this picture?

Last year, encouraged by Plex's new private equity owners, CEO Jason Blessing and his management team formulated a growth strategy, which they presented at the Plex user conference. Afterwards, I outlined what I thought Plex needed to do to execute on it.

Following up now half a year later, Jason circled back to give me another briefing, and it was a good opportunity also to see what progress Plex was making. Here is my take: 

1. Management changes are part of the growth plan. Plex this week announced the appointment of Don Clarke as its new CFO. He appears to be a great candidate for the job. He comes most recently from Eloqua, a leading marketing cloud vendor, where he oversaw Eloqua's growth to nearly $100M in annual revenue, its initial public offering, and its eventual sale to Oracle last year, which put Clarke out of a job.
   
   I joked with Jason that Oracle's acquisition strategy has been serving Plex well in terms of recruiting, as several of Plex's top management team have come from companies that Oracle acquired: Heidi Melin, Plex's CMO, also came from Eloqua, Karl Ederle, VP of Product Management spent time at Taleo, which Oracle acquired in April 2012, and Jason himself came from Taleo.
   
   If Plex's growth strategy is successful, there is likely to be an IPO in Plex's future. Clarke's experience in taking Eloqua public will serve Plex well.
    
2. Plex added 59 new customers in 2013, bringing its customer count to "nearly 400." As mentioned earlier, in my view, the total customer count is well below where it should for a decade-old cloud provider. Jason compares it favorably with the 500 or so customer count for Workday, overlooking the fact that Workday launched in late 2006 and that its typical customer is several times larger than Plex's.
   
   Still, Plex's growth in 2013 represents a 15% increase in its customer base and signals that its growth strategy is beginning to take hold.
   
   The new customer count includes some accounts that are larger than Plex has sold to in the past, such as Caterpillar, which is running Plex in a two-tier model for some smaller plants. In my previous post, I outlined some of the functionality improvements that Plex would need to make to better serve these large customers, and there are signs that these enhancements are underway.
    
3. Plex doubled its sales force last year. This, no doubt, is behind the uptick in new customer sales. The new sales headcount is serving primarily to expand the geographic coverage outside of Plex's traditional Great Lakes concentration to the South and also to the West Coast. (As part of the expansion, Plex opened a Southern California sales office, which happens to be a short walk from my office near the John Wayne Airport.) There are also increased sales to organizations outside North America, another hopeful sign.
    
4. Plex's industry focus remains in three industry sectors: motor vehicles, food and beverage, and aerospace and defense. In my view, this is probably the greatest constraint to Plex's growth strategy. Short-term, having more feet on the street and expanding geographically are low-hanging fruit. But at some point, there will be diminishing returns. Manufacturing contains dozens of sub-sectors, many of which are adjacent to Plex's existing markets. It is not a big jump to build out support and sell into these sub-sectors. We discussed a couple of these, and hopefully, Plex's product management team will have the bandwidth to address them.
    
5. Plex's platform remains a weak spot. Most cloud systems today provide a platform for customer enhancements and development of complementary functionality. For example, Salesforce.com offers Salesforce1, a mature platform-as-a-service (PaaS) capability that has spawned an entire ecosystem of partners. NetSuite, likewise, has its SuiteCloud platform.  Although Plex has the beginnings of such a platform, it is still limited to use by Plex's own development team and a few carefully-vetted partners. Jason knows this is a need, and hopefully we will see more progress in this area. 

There is a lot to admire about Plex. Of the few cloud-only ERP providers that are addressing the manufacturing sector, Plex has the most complete footprint of functionality, rivaling mature on-premise manufacturing systems. In addition, customer satisfaction is readily apparent when I speak to installed customers, both new and old. Hopefully, Plex will build on these strengths and see growth accelerate.

There is a Plex 2013 year-end recap available on the Plex website.

Update: And right on cue, Dennis Howlett has done an on-camera interview with Jason Blessing about Plex's 2014 strategy. He also comments on Plex's approach to SaaS pricing. 

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Oracle's List of 100-Plus Cloud Applications

Oracle has now responded to analyst requests for a list of the 100+ cloud applications that Larry Ellison claimed in his Oracle Cloud presentation last week. I've just checked, and his exact words were "Over 100 enterprise-grade applications running in the cloud."

But the email cover for the list sent this morning refers to them as "100+ application services." As I speculated last week, Oracle is defining "application services" at very fine-grained level, almost down to individual programs.

For example, within "Oracle Fusion Customer Relationship Management - Marketing" is "Fusion Marketing Segmentation - up to 500,000 records" really a separate and distinct application from "Fusion Marketing Segmentation - up to 1,000,000 records?"

Update 1: Upon further review, I'm wondering why Oracle CRM On-Demand, a multi-tenant SaaS application, is missing from Oracle's list.

Update 2: I'm also wondering, using Oracle's definition of "applications," how many does SAP have?  In his presentation, Ellison said, "SAP only has SuccessFactors." Leaving aside my point that Ellison did not credit Business By Design or SAP's line of business applications as cloud apps, how does "SuccessFactors" count as one application, but Oracle's Taleo counts as 24 (see list below)?

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Here is the complete list of what Oracle claims as its 100+ cloud applications:

Oracle RightNow

Oracle RightNow Dynamic Agent Desktop Cloud Service: Seats
Oracle RightNow Standard Dynamic Agent Desktop Cloud Service
Oracle RightNow Enterprise Dynamic Agent Desktop Cloud Service
Oracle RightNow Enterprise Contact Center Dynamic Agent Desktop Cloud Service
Oracle RightNow Standalone Chat Dynamic Agent Desktop Cloud Service
Oracle RightNow Dynamic Agent Knowledgebase Cloud Service
Oracle RightNow Chat Cloud Service
Oracle RightNow Cobrowse Cloud Service
Oracle RightNow Cobrowse Remote Support Cloud Service
Oracle RightNow Contextual Workspaces Cloud Service
Oracle RightNow Guided Assistance Cloud Service
Oracle RightNow Agent Scripting Cloud Service
Oracle RightNow Desktop Workflow Cloud Service
Oracle RightNow Product Registration Cloud Service
Oracle RightNow Social Monitor Cloud Service

Oracle Taleo

Taleo Enterprise Cloud Service Platform
Taleo Platform Cloud Service
Taleo Analytics Cloud Service
Taleo Recruiting Cloud Service
Taleo Recruiting High Volume Cloud Service
Taleo Onboarding Cloud Service
Taleo Performance Management Cloud Service
Taleo Goal Management Cloud Service
Taleo Succession Planning Cloud Service
Taleo Development Planning Cloud Service
Taleo Learn Cloud Service
Taleo Learn External User Cloud Service

Taleo Enterprise Recruiting Assessment Content
Taleo Hourly Assessment Content Cloud Service
Taleo Store Manager Assessment Content Cloud Service
TBE Recruiting Standard Active User Cloud Service
TBE Recruiting Premium Active User Cloud Service
TBE Recruiting Manager Cloud Service

Taleo Business Edition - Per Employee
TBE Recruiting Premium Cloud Service
TBE Smart Sourcing Base Cloud Service
TBE Smart Sourcing Per Posting Cloud Service
TBE Onboarding Cloud Service
TBE Compensation Cloud Service
TBE Performance Management Cloud Service

Taleo Business Edition - Learn
TBE Learn Cloud Service
TBE Learn External Trainees Cloud Service

Oracle ATG

Oracle ATG Live Help
Live Help Interactions On Demand
Live Help Chat On Demand
Live Help Email On Demand
Live Help Cobrowse Chat On Demand
Live Help Cobrowse Phone On Demand
Recommendations Single-Channel On Demand
Recommendations Multichannel On Demand
Recommendations Additional Catalog On Demand
Recommendations Large Catalog On Demand

Oracle Fusion Applications

Oracle Fusion CRM Base Cloud Service
Fusion CRM Base Standard Offering Cloud Service
Fusion CRM Base Enterprise Offering Cloud Service
Fusion CRM Base Premium Offering Cloud Service
Fusion Transactional Business Intelligence for Customer Relationship Management Cloud Service
Fusion Enterprise Contracts Management Base Cloud Service
Fusion Incentive Compensation Cloud Service
Fusion Opportunity Landscape Cloud Service
Fusion Quota Management Cloud Service
Fusion Sales Campaigns Cloud Service
Fusion Sales Predictor Cloud Service

Oracle Fusion Marketing Cloud Service
Fusion Marketing, Enterprise Edition Cloud Service
Fusion Marketing, Additional Volume Cloud Service
Fusion Marketing, Additional Email - 500,000 Messages

Oracle Fusion Partner Relationship Management Cloud Service
Fusion Partner Relationship Management for Channel Managers Cloud Service
Fusion Partner Relationship Management for Partners Cloud Service
Fusion Territory Management for Channel Managers Cloud Service

Oracle Fusion Customer Data Management Cloud Service
Fusion Customer Data Steward Cloud Service
Fusion Customer Management Foundation for Organizations Cloud Service
Fusion Customer Management Foundation for Persons Cloud Service
Fusion Data Quality Address Cleansing Cloud Service
Fusion Data Quality Matching Cloud Service
Oracle Fusion Human Capital Management Cloud Service
Fusion Human Capital Management Base Cloud Service
Fusion Transactional Business Intelligence for Human Capital Management Cloud Service

Oracle Fusion Human Capital Management Cloud Service Options
Fusion Global Payroll Cloud Service
Fusion Goal Management Cloud Service
Fusion Payroll Interface Cloud Service
Fusion Performance Management Cloud Service
Fusion Talent Review Cloud Service
Fusion Workforce Compensation Cloud Service
Fusion Workforce Lifecycle Manager Cloud Service
Fusion Workforce Predictions Cloud Service

Oracle Fusion Talent Management Cloud Service
Fusion Talent Management Base Cloud Service
Fusion Transactional Business Intelligence for Talent Management Cloud Service

Oracle Fusion Talent Management Cloud Service Options
Fusion Goal Management Cloud Service
Fusion Performance Management Cloud Service
Fusion Talent Review Cloud Service
Fusion Workforce Compensation Cloud Service

Oracle Fusion Financials Cloud Service
Fusion Financials Cloud Service
Fusion Expenses Cloud Service
Fusion Advanced Collections Cloud Service
Fusion Automated Invoice Processing Cloud Service
Fusion Financial Reports Center Cloud Service
Fusion Transactional Business Intelligence for Financials Cloud Service

Oracle Fusion Procurement Cloud Service
Fusion Purchasing Cloud Service
   Option: Fusion Supplier Portal Cloud Service
   Option: Fusion Sourcing Cloud Service
Fusion Procurement Contracts Cloud Service
Fusion Self Service Procurement Cloud Service
Fusion Enterprise Contracts Base Cloud Service
Fusion Transactional Business Intelligence for Procurement Cloud Service

Oracle Fusion Project Financial Management Cloud Service
Fusion Project Financial Management Base Cloud Service
Fusion Project Control Cloud Service
Fusion Project Billing Cloud Service
Fusion Project Contracts Cloud Service
Fusion Enterprise Contracts Base Cloud Service
Fusion Project Performance Reporting Cloud Service
Fusion Transactional Business Intelligence for Project Financial Management Cloud Service

Oracle Fusion Project Execution Management Cloud Service
Fusion Project Management Base Cloud Service
Fusion Collaborative Project Management Cloud Service
Fusion Transactional Business Intelligence for Project Execution Management Cloud Service
Fusion Project Resource Management Cloud Service

Oracle Fusion Risk and Control Management Cloud Service
Fusion Risk and Control Management Base Cloud Service
Option: Fusion Risk and Compliance Management Cloud Service
Option: Fusion Risk and Compliance Intelligence Cloud Service
Option: Finance Controls Cloud Service
Option: Procurement Controls Cloud Service
Option: Human Capital Controls Cloud Service
Option: Fusion Controls On-Premise Connector Cloud Service

Oracle Fusion Supply Chain Management Cloud Service
Fusion Inventory Management Cloud Service
Fusion Product Hub Cloud Service
Fusion Transactional Business Intelligence for Supply Chain Management Cloud Service

Oracle Hyperion Cloud Service
Hyperion Planning Plus Cloud Service

Oracle Fusion Cloud Service Additional Add-On
Fusion Applications Extensibility Framework Cloud Service

Oracle Fusion Financials
Fusion Accounting Hub
Fusion Advanced Collections
Fusion Automated Invoice Processing
Fusion Expenses
Fusion Financial Reports Center
Fusion Financials
Fusion Transactional Business Intelligence for Financials

Oracle Fusion Procurement
Fusion Procurement Contracts
Fusion Purchasing
Option: Fusion Sourcing
Option: Fusion Supplier Portal
Fusion Self Service Procurement
Fusion Transactional Business Intelligence for Procurement

Oracle Fusion Project Portfolio Management
Fusion Project Billing
Fusion Project Contracts
Fusion Project Control
Fusion Project Costing
Fusion Project Integration Gateway
Fusion Project Performance Reporting
Fusion Transactional Business Intelligence for Projects

Oracle Fusion Human Capital Management
Fusion Benefits
Fusion Global Human Resources
Fusion Global Payroll
Fusion Global Payroll Interface
Fusion Goal Management
Fusion Performance Management
Fusion Talent Review
Fusion Transactional Business Intelligence for Human Capital Management
Fusion Workforce Compensation
Fusion Workforce Directory Management
Fusion Workforce Lifecycle Manager
Fusion Workforce Predictions

Oracle Fusion Supply Chain Management
Fusion Distributed Order Orchestration
Fusion Distributed Order Orchestration User
Fusion Global Order Promising
Fusion Inventory Management
Fusion Product and Catalog Management
Fusion Product Hub
Fusion Product Hub Data Steward
Fusion Product Hub for Communications
Fusion Product Hub for Retail
Fusion Transactional Business Intelligence for Supply Chain Management

Oracle Fusion Customer Relationship Management - Sales
Fusion CRM Base
Fusion CRM Desktop
Fusion Enterprise Contracts Base
Fusion Incentive Compensation
Fusion Opportunity Landscape
Fusion Quota Management
Fusion Sales Campaigns
Fusion Sales Catalog
Fusion Sales Predictor
Fusion Smart Phone Edition
Fusion Territory Management
Fusion Transactional Business Intelligence for Customer Relationship Management

Oracle Fusion Customer Relationship Management - Marketing
Fusion Email Marketing Server
Fusion Marketing
Fusion Marketing Segmentation - up to 500,000 records
Fusion Marketing Segmentation - up to 1,000,000 records
Fusion Marketing Segmentation - up to 3,000,000 records
Fusion Marketing Segmentation - up to 5,000,000 records
Fusion Marketing Segmentation - up to 10,000,000 records
Fusion Marketing Segmentation - unlimited records

Oracle Fusion Partner Relationship Management
Fusion Incentive Compensation for Channel Managers
Fusion Partner Relationship Management for Channel Managers
Fusion Partner Relationship Management for Partners
Fusion Territory Management for Channel Managers

Oracle Fusion Customer Relationship Management - Customer Data Management
Fusion Customer Hub Data Steward
Fusion Customer Hub for Organizations
Fusion Customer Management Foundation for Organizations
Fusion Customer Hub for Persons
Fusion Customer Management Foundation for Persons
Fusion Data Quality Address Cleansing
Fusion Data Quality Matching

Oracle Fusion Application Tools
Fusion Applications Extensibility Framework

Oracle Fusion Governance, Risk and Compliance
Fusion Application Access Controls Governor
Option: Fusion Application Access Controls for Fusion Applications

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