It’s been an eventful last 12 months for cloud ERP (enterprise resource planning) company Plex Systems, with the company completing a private equity buyout, closing a $30 million growth stage venture round from Accel Partners (a PandoDaily investor), and welcoming a new CEO – in that order. Each of the moves was highly strategic, according to current management, with the goal of positioning the company to extend its substantial lead in the massive but underserved manufacturing sector.
Today, the 18-year-old Michigan-based company put in place what it hopes is the final piece of this reinvention puzzle with the addition of former Eloqua chief marketing officer and Taleo head of global marketing Heidi Melin as its new CMO. Melin, who also held positions at Polycom, Hyperion, and PeopleSoft, is an enterprise veteran in every sense of the word and is a major score for any company.
Melin’s decision to join Plex is unsurprising, given that it’s her former Taleo and PeopleSoft colleague Jason Blessing who was appointed CEO of the company in January. Together the two will look to improve on the company’s more than $50 million in 2012 revenue and 30 percent annual revenue growth rate – a particularly healthy number for a late stage SaaS company. Plex is operating profitably, according to Blessing, however the CEO is actively investing all profits into new growth initiatives.
To do this, the Plex will need to refine its messaging and more effectively articulate its value proposition, according to Melin. The company already serves 350 large enterprise customers, primarily in North America, with a presence in the motor vehicles, aerospace, defense, electronics, and, most recently, food and beverage industries.
One thing Plex has going for it is that manufacturing has been one of the last industries to shift to cloud-based ERP systems, meaning that there’s miles and miles of greenfield territory to prospect. Plex is already the only manufacturing-focused native cloud ERP system. And while the product has expanded to offer finance, HR, and CRM solutions, the fact that it was founded by manufacturing industry insiders led them to solve the most difficult challenges of this mission-critical business area first – production, quality control, and inventory management, among others.
“Plex is changing global manufacturing just as cloud solutions have transformed sales, marketing and human capital management in other industries,” said Melin.
Since raising the Accel round last fall, Plex has grown from 260 to 307 employees with its global headquarters outside of Detroit and a European base in Germany. The biggest misconception of Plex, according to Blessing, is that it operates in a niche space. Contrary to popular perception, the ERP market is roughly $30 billion in size, and Plex’s solution is applicable to $15 to $20 billion of that, according to the CEO. Legacy solutions from Oracle, SAP, Infor, and QAD, among others make up the bulk of the existing competition. But the biggest threat from these outdated platforms is the sunk cost fallacy and the psychological burden of switching.
Plex, a SaaS product that does not require expensive software or hardware purchases, is really several generations ahead of these competitors. The company’s challenge is to better educate the market on the value it offers and to get in front of as many such prospects as possible while the market is maturing. In both cases, the addition of Melin should be just what the doctor ordered.
With US manufacturing coming back into vogue, there is no shortage of opportunity for Plex. Unsurprisingly, the company has been mentioned as a likely IPO candidate, and its current revenue and growth figures stack up nicely against other successful SaaS listings. Given all the upheaval inside the executive suite, it’s unlikely that we’ll see a listing from Plex in the immediate future, but this company is likely one to keep an eye on.