Virtual 2020 PowerPlex

LNS recently participated in Plex Systems’ annual customer event, PowerPlex 2020, which was held virtually for the first time.  Three themes emerged from the event. 

1. Company confident of continued growth even with COVID 19 impacts

Bill Berutti CEO of Plex Systems, discussed how the company was faring in these uncertain times.  He asserted that as “Cloud and SaaS first,” the company was operating with minimal impact on operations. Plex was proud to highlight new deals being done without physically meeting with new prospects.  And even more impressive was the report that sites had gone live with Plex without any of their services people going on-site because of social distancing restrictions.  Berutti confidently predicted that Plex would continue to grow even in 2020 (though maybe a little slower than the double-digit growth they have been experiencing in recent years.)  In fact, other members of the Plex management team reported that current prospects were saying that social distancing requirements were yet another reason to accelerate the deployment of ERP/MES in the cloud for their organizations. 

The virtual event was also marked by an insightful focus on COVID-19’s impact on the manufacturing sector.  Plex has put together the Plex COVID-19 Resource Center and an associated series of conference calls that highlight the impact on, and remediation steps being taken by manufacturers. Some of the findings from that resource center were shared with the virtual audience.  In addition, as manufacturing customers were introduced for their presentations they were asked about the virus’ impact on their business.  The speakers reflected the range you would expect as some were in essential businesses facing unprecedented demand and opportunities for growth while others were completely shut down and looking forward to reopening. 

2. Smart Manufacturing and Continued investment in Transformation technologies

 The company rebranded in late April around the concept of smart manufacturing, renaming their flagship solution the “Plex Smart Manufacturing Platform” and using the new tagline “Make it Smart.” This change builds on the fact that Plex is more than a monolithic ERP company for specific manufacturing verticals, that 600 of its 700 customers are using its MES capabilities, and that MES is available as a standalone option that connects to third-party ERP solutions for companies that don’t want to change out their management-level ERP.  Further, Plex has been investing in key Industrial Transformation (IX) technologies include IIoT, industrial analytics and RPA (via internal development and partnerships), all of which help companies recognize the value of digital transformation.

There is a strong customer centric message inherent in this positioning as LNS has found that Industrial Transformation continues to grow: 82% of industrial companies have either implemented or budgeted for the launch of an IX program within the year While COVID-19 may slow that growth, IX is a critical trend across manufacturers.  Linking into that spend is a smart move for Plex (bad pun intended). 

There is also a critical internal justification behind the repositioning:  the company wants to remove the dependency of ERP replacement from its sales process.  

3. “Disaggregation” of the product critical to the long-term growth of the company

Key to that is the disaggregation of its product set.  IIoT and MES can now be implemented as standalone products.  Plex ERP is no longer required for MES.  Berutti views this as a key growth driver for the company.  In fact, he telegraphed that the company would be disaggregating MES into even smaller pieces with standalone production monitoring coming this year.   

The challenge for Plex in this means that they are becoming yet one more vendor in the MES and Production Monitoring markets.  These markets are already crowded with 100’s of vendors. 

Last year we said:  “To be a trusted IX partner for top manufacturers in its target industries, Plex must continue to extend this functionality and build unique features that combine core manufacturing functions with emerging IIoT functions, to deliver a unique value that only these combined functions can bring.“ We stick by that statement and would encourage Plex to disaggregate products to more easily penetrate accounts but think about how to recombine capabilities into meaningful use cases across these product families to really power IX within those accounts.