Power lightning Image credit pixabay/wikimediaimagesEnterprise Times recently spoke to Bill Berutti CEO of Plex. Berutti joined Plex a few months ago and ET asked him what his key findings were and the changes he has done.

Berutti answered: “Since I’ve been here, my findings are we have fantastic customers, we have great technology and an opportunity that’s as big as I’d hoped for. The thing that we are continuing to really focus on, is making smart choices. We’re a company that this year is on pace to do $150 million in revenue and we’re growing double digits, and things are very healthy, quite great.

“We can’t attack a $30 billion opportunity all at once. That’s a recipe for spreading yourself too thin. Making choices, the right verticals, the right applications, the right problems to solve for customers is a really important element to how we succeed. That’s where I’ve tried to bring some discipline and some intentional focus on things.“

Bill Berutti, CEO Plex (Image credit Linkedin)
Bill Berutti, CEO Plex

Berutti also added a second thing. “Now that we’re achieving kind of that next level of scale, continuing to bring talent into the company at all levels and then growing the great talent that we have to be able to get us from $150 to $300, $400, $500 million is really, really key. Then doing so with people that really understand manufacturing and can bring that discipline to bear. We’ve had the chance to bring in some great new talent including, our new CMO Robin Saitz, who has twenty years of manufacturing experience, and she’s a great engineer. That kind of talent, it’ll be great for our next level of growth.”

What about funding?

While Berutti is renewing the focus and improving the talent it appears that he isn’t looking for another round of funding. Berutti commented: “We’re in the great position, we could raise funds if we wanted to, but we don’t need to. We’re cash flow positive, we’re EBITDA positive, and we have tens of millions of dollars of cash available.”

There is a potential inference here that Plex will look to make further acquisitions. Its most recent ones were DemandCaster and Dattus. ET asked Berutti about that possibility. He replied: “I don’t think we need to go make any acquisitions to have a bright future. As we continue to think about how to quickly accelerate our plans around IOT and connected manufacturing, that’s an area where we will always consider things. We’ve had incredible success with Dattus in the nine months since we bought the company. More things like Dattus, we’d welcome if the right thing came along. “


If Plex is preparing for expansion, where will that expansion be? With most of Plex customers headquartered in the US it does not have a historically great record of expanding overseas. It had an office in the UK several years ago but since closed it. ET asked Berutti about his approach to international expansion.

“We want to be really pragmatic and sequenced in the way we do this. Today, most of our customers are US based companies. We do have some Japanese customers and we have some French and Italian and German customers. What we do is we just tend to follow our customers. They’ll say, ‘Hey, we want you to support us in these countries,’ and we’ll say, ‘Great, we’ll do that.’ We might implement and support on our own, or we might implement with the help of a partner.

“The next phase is really one where we will have local, support and services, largely around the idea that our large global customers, most of which are in the US, want us to be able to be more proactive and intentional about our global support. So rather than being reactive and saying, ‘Yes, Mr Customer, we’ll follow you,’ we’ll be able to go to those global companies, largely based in the US, and say, ‘We now have more capability directly in the product, in region for service and support to be able to do an even better job for you.’ So we can be more intentional about that growth versus reactive.

“The next phase, which might only be a year or two away, I can’t say for sure, would be to go to that next step. To do more than just service support and product ties. We’re ready to start selling to international companies, particularly probably in Europe and then Asia.”

One of the first international locations that Plex has invested in is Pune, in India. It acquired an office through the acquisition of Dattus but has now taken out a long term lease and is looking to expand its operations there. Beyond India, Berutti summed up briefly by saying: “News coming soon.”

With growth comes challenges

One of the challenges that SaaS companies face when they grow internationally is their approach to hosting. Plex currently has its own cloud and ET asked Berutti what the longer term strategy was for platforms.

“For the core inter-workings of the Plex manufacturing cloud, it makes a lot of sense for us to continue the development on a private cloud environment. Obviously we get tremendous amounts of technology leverage, not only from Microsoft technology like SQL but from Kafka and other modern technologies that we’re leveraging on our own platform. Then as we build out and we think about the opportunity to leverage more purpose-built technology for certain applications, we are looking at those other environments. For instance with our new IAM technology that we’re launching this year for how we deal with identity management, we’re leveraging the public cloud.

“In many cases, our customers are going to choose to leverage Azure and all the capabilities there. As we think about some of these real-time analytics use cases that I referred to, we think that the public cloud, maybe Azure first, but maybe also AWS and maybe even Google and TensorFlow offer really powerful places for our customers to get more real-time unit economics and capability leverage from the public cloud. Where most people are going is not that there’s one monolithic cloud platform that provides every single piece of solution, but that you have an inter-working of different platforms that provide that best in class capability for the particular application or use case. That’s where we’re headed, particularly with a lot of the new applications that we’re building.”

It is an interesting call. For some companies, such as Rootstock, who are wedded to a single platform (Salesforce), they are not looking to leverage solutions from multiple platforms. The battle of single platform versus one of hybrid platform is one that is likely to ebb and flow for several months and years yet. In remaining independent of any specific platform Plex will deliver its customers choice. The downside of this strategy is that it is unlikely to have such close relationships with platform vendors as those companies which are dedicated to a single platform such as Rootstock or IFS with Azure.

The importance of the API

To achieve that hybrid approach Plex has invested in developing API’s. Berutti sees several benefits of comprehensive API’s.

“Our new modern API layer is fantastic. It has a bunch of benefits. One is the third party integration, which has become much more seamless and is what you would expect.

“Further, our ability to utilise those APIs to address different use cases for our customers. Many of our customers are medium sized businesses that want full ERP from us on a global basis. Then we have a set of customers that as they move up the stack and become bigger, say, ‘Hey, we want to use you for full ERP and MES in the plant, but we’ve got a global consolidation activity that we’re utilising with Oracle or SAP.’ We want to provide a two-tiered ERP strategy where you’re running the plants all the way to the shop floor, and the financials in the plant, but we’re consolidating up into Oracle or SAP. Those APIs become very, very useful there.

“Then the third use case, which we think is a gigantic opportunity and we’re seeing a lot of traction for, is what we refer to as standalone MES integrated with an upstream ERP solution. More and more of our customers, at the very high end are looking for that because they’re a large global multi-billion dollar entity. They’re going to use likely SAP or Oracle for global financials, but off the shop floor they either have a home grown or legacy solution. The Plex manufacturing cloud for shop floor automation and MES is the best solution and with those modern APIs can much more easily separate the product and integrate it with an upstream ERP.”

Is Workday growing in importance?

While Workday is not specifically targeting Manufacturers, and it is certainly not delivering full ERP for them, it is a sector that ET is seeing some Workday presence in with other manufacturing ERP partners. ET asked Berutti whether Plex integrates to Workday.

“We do have an integration with Workday. It is a technology oriented partnership that predates me. We have a lot more opportunity as it relates to go to market. To comment on the trend that you’re seeing in the market place, we’re seeing that for sure. Customers start with HCM with Workday, but in the right situations, customers are quickly adopting their financials as well. The potential of it for Plex and Workday is that the opportunity for us together to go disrupt SAP and Oracle is huge. Workday is never going to go into a vertical-centric MES oriented application space. Yet we offer an opportunity to do that. Without naming names, I can tell you that I have already personally been in front of half a dozen multi-billion dollar customers of ours that are integrating us directly with Workday for the very reason that you stated. By the way, at the expense of Oracle and SAP.”

Plex has no plans to sit on the Workday platform, but if Workday was to look at a SaaS vendor to acquire in the manufacturing space it might consider Plex at some point. That is unlikely to happen for several months, years, if at all but with its open API approach and deeper integration to Workday it might become an option.

Is it Plex time now?

Berutti seems to have brought a focus to Plex and certainly the message is less about the full ERP and more about delivering the specialist manufacturing suite from the cloud. ET asked Berutti how the target market is evolving:

“I’ve been in manufacturing for most of my career, so I understand the latency of cloud adoption in manufacturing and the fact the inflection point is probably right in front of us. It’s amazing to me that all those large and small to medium sized legacy players have not gone after the cloud as quickly as I would have expected. That puts Plex in this really powerful position. My view is that in 2019, the cloud is going to become more important. Not just because of delivery.

“The good news is, manufacturers’ reticence for the cloud is falling away and their appreciation for the IT value of a seamless platform that doesn’t need to be upgraded or supported, okay they’re getting their head around that. The unit economic value of that and the risk is fading away in their minds.”

The key point is not only in the adoption of cloud but what cloud platforms are capable of delivering, data analysis. Berutti continued:

“Where it really gets interesting, is if you now think about the opportunity to leverage all of the data that’s coming off the shop floor. We collect over 7 billion data points and metrics, transactions and activities off of the shop floors in 2,300 plants globally every day. Over 7 billion. Where else but the cloud can you get the opportunity to leverage volumes of data like that? The answer is nowhere, right? You can’t. What I think is going to happen in 2019, not only is the adoption curve and demand for manufacturing to see solutions from the cloud going to increase. Furthermore, the thought that the opportunity to leverage data in the cloud is going to become more apparent. Therefore, advantage Plex, and our position in the marketplace. “

Enterprise Times: What does this mean

After only a few short months Berutti has taken a firm grip of Plex and is pushing it onto a path that bodes well for the future. The focus on MES, the shop floor and data is key to Plex. It is a competitive battleground though. Plex is not the only pure cloud manufacturing ERP solution nowadays. Rootstock is another, however, it is wedded to the Salesforce platform. Others such as IFS, QAD, Infor and Epicor will state that their solutions are now more than just cloud enabled but in some cases re-architected for the cloud. That also leaves the two behemoths, SAP and Oracle. Both are trying to reinvent themselves and deliver the kind of functionality that their customers want.

In the short term this leaves a significant opportunity for Plex, especially in two tier ERP scenarios, where neither SAP nor Oracle have developed the micro vertical functionality on their applications. Few companies want to customise their solutions and if Plex can deliver a solution for specific micro verticals with a focused go to market strategy, it could do well.


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