Friday, November 30, 2007

Flexing Plexus ...

Plexus, a provider of SaaS in the manufacturing industry, has released a paper on how 'How Manufacturing Software Enables Companies to Improve Quality Operations and Control Warranty Costs'.

It describes its product, Plexus Online, as a competitive advantage.

Since enterprise resource planning, customer relationship management, manufacturing execution systems and supply chain management are fairly ubiquitous in most industries, then you really need to consider them as becoming more of a cost of doing business. This is no bad thing for a SaaS provider who can show a serious cost advantage over competitors due to its utility based charging mechanism.

On the other hand this is not so hot if you are a customer who is stuck with some expensive traditional licensed system, or if you are in the process of building one. The competitive advantage from these systems has already long gone because of its ubiquity: you really should be focused on cost and utility like services.

Of course, this could be even more of a problem for a provider of expensive traditional licensed type systems.

Fortunately there is a silver lining for those providers and customers. Plexus is a proprietary system. There is no ecosystem of Plexus providers competing around a standard. As there is no market of providers, this means all the usual fears of adoption and questions on what happens when a disaster occurs. One of these days though, companies are going to cotton on that having a small piece of a really big pie is way better than all of a small pie.

What would happen if Plexus open sourced their system or help developed an eco-system of competitive Plexus providers or created a competitive market of manufacturers? Plexus itself could become the 3rd party assurance service that such a market needs - they have already got an incredible reputation. Customers would have choice which could include hosting it themselves in the interim whilst they become comfortable with the market of providers, overcoming any adoption fears.

Do it right and such a market might possibly give SAP / Oracle / Salesforce a run for their money. In any event, Robert Beatty (founder of Plexus) seems a smart cookie and they are an interesting company to watch.

--- 10th June 2014

Looks like Plexus is going great guns. Haven't been following but others have.