Yesterday, SaaS ERP pioneer Plex Systems announced the appointment of Oracle executive Jason Blessing as its new CEO. The move comes on the heels of the company's $30 million investment from Accel Partners.
The choice of Blessing, Oracle's senior VP of application development, as the leader of Troy, Mich.-based Plex perhaps signals a tighter focus on SaaS-based automation and innovation.
Blessing is no stranger to SaaS or SaaS companies. He held a number of executive roles at SaaS talent management pioneer Taleo, which was acquired by Oracle last year for $1.9 billion.
Plex, which specializes in the volatile manufacturing industry, competes indirectly with Oracle in the ERP market. Oracle is a leader in the back-office ERP systems market. Plex competes more directly with SaaS ERP rival Netsuite and mid-tier ERP market leader Epicor. Epicor markets both back-office and SaaS-based ERP systems.
One advantage for Plex is the fact that roughly 60 percent of its customers are in the resurgent US automotive industry. Still, the overall volatility of the US manufacturing market, and waning questions about the cloud's latency on the factory floor, makes SaaS ERP penetration difficult.
"Manufacturing ERP is, by far, the most complex enterprise software to design and build," Blessing said in a release. "Plex Systems is the first company to build a cloud-based manufacturing ERP solution and has a significant lead over its competitors in this space."
He believes the timing is right for Plex because SaaS and Plex have been around long enough to allay doubts about the effectiveness of SaaS in manufacturing.
"The company has built the most complete cloud offering for manufacturing at precisely the time when manufacturers have become comfortable moving this critical component of their business to the cloud," Blessing said.
Even though US manufacturing has been in a period of decline for much of the past decade, the industry has been on the mend in the last few years, according to a report from the Boston Consulting Group. SaaS-based ERP represents an opportunity for manufacturing firms to cut costs and reduce their focus on the management of very expensive back-office ERP systems.
Accel sees SaaS ERP as a growth market in which 17-year-old Plex is a youthful pioneer. Research firm Aberdeen says SaaS ERP adoption has more than doubled since 2009, while back-office ERP solutions have decreased by more than 25 percent over the same period. But SaaS ERP still has market share in the single digits, which is what attracted equity investor Accel Partners.
"In 2008, we raised a half-billion fund to invest in more mature growth-oriented companies -- companies that are cashflow positive -- that are up and running," Sameer Gandhi, Accel partner and Plex board member, told us in a recent interview. "In 2011, we raised a second growth fund, which was a $900 million-plus fund, which is where the Plex investment comes from." (See: SaaS-ERP Pioneer Plex Gains $30M.)