New takes on emerging software
The steady consolidation in the enterprise software industry hasn't driven choice out of the market—at least not yet. Software vendors continue to emerge by carving out new niches or by winning over companies interested in alternative delivery models for established application categories. Take the case of iPurity's ERP choice.
The steady consolidation in the enterprise software industry hasn't driven choice out of the market—at least not yet. Software vendors continue to emerge by carving out new niches or by winning over companies interested in alternative delivery models for established application categories.
Take the case of iPurity 's ERP choice. In some ways, it was driven by some of the same factors surrounding ERP selection in manufacturing—e.g., in-depth production management functionality, and certain vertical needs. But iPurity is far from your typical company.
For one thing, iPurity isn't a manufacturer—it's a construction company for clean rooms in the high-tech industry that uses lean methods to drive operations. Second, even though the company maintains a bare-bones office in Redwood City, Calif., functionally, it isn't based there. Instead, the organization is virtual, working in the field or from home offices using laptops.
This combination of factors—being a virtual enterprise, and wanting to apply manufacturing methods for installing clean pipe facilities—heavily influenced ERP choice, says Ron Nussle, Jr., iPurity's COO. On the lean side, it needed in-depth production management, and for both vertical industry and its virtual approach, it wanted ERP under a Software-as-a-Service (SaaS) model.
“When you're operating in a hyper-cyclical industry, you must have the ability to scale operations up very quickly—or down very quickly,” Nussle says. “That's why SaaS works well for us. We can scale up our use within 24 hours, and similarly, if our revenues were to go down, we could scale back down just as quickly.”
In 2006—when iPurity launched and began hunting for a SaaS-based solution—the biggest ERP vendors such as SAP had not yet unveiled their present offerings. According to Nussle, the search led iPurity to consider either a combination of Salesforce.com 's CRM solution and partner solutions for manufacturing functions, or a SaaS-based manufacturing ERP solution from Plexus Systems .
According to Nussle, iPurity wanted a more prepackaged, single-vendor approach, so it went with Plexus. Today, iPurity's users access Plexus Online via laptops equipped with wireless broadband Internet access cards. They can log in at job sites, at home, or while traveling. Associated CAD, spreadsheet, or other files for projects are uploaded to the SaaS solution, so iPurity doesn't even have file servers.
“We operate under a total virtual business model,” Nussle says. “We made a decision to invest our resources in people, tools, and systems—not big, fancy offices.”
Filling the white spaces
Being one of the first SaaS-based, manufacturing-focused ERP vendors helped Plexus gain a market foothold. Software industry analysts call this a “white space”—a niche or delivery model not yet dominated by the largest vendors.
“We continue to see innovation around the fringe,” says Dwight Klappich, a research VP with Stamford, Conn.-based analyst firm Gartner . “We would tend to call them edge applications, as opposed to being broad, deep suites of products. These are much more focused types of tools. They are on the edge, either addressing a very industry-specific need, or a focused kind of functionality that would augment another application.”
For example, says Klapplich, a relatively new vendor such as Emcien hits a vertical need. In Emcien's case, its software allows manufacturers of configured products to optimize which mix of features are the most profitable while meeting demand. In other words, Emcien didn't try to compete with product configuration vendors, or with functionality in big suites like ERP. “That, to me, is an edge application,” says Klappich.
Veteran software executives also see some niches remaining.
“There is as much opportunity today as there was five years ago,” says Stuart Clifton, chairman and CEO of New Momentum , a vendor of SaaS-based enterprise risk management (ERM) software.
Clifton has more than 25 years experience running software companies, having been one of the founders of Dataworks, a midmarket ERP vendor. Clifton agrees with the notion that there is still white space available for vendors with unique approaches. New Momentum fits the mold, he says, because its Web-based data mining technology allows users to monitor market trends to spot problems such as counterfeit parts—something current business intelligence (BI) or planning tools aren't geared to.
“We found ourselves moving into an application category is that is brand new, and that is reasonably independent of anything on the supply chain side,” says Clifton.
Cindy Jutras, a VP for Boston-based analyst firm Aberdeen Group , concurs, believing some niches remain ripe for innovation. In particular, Jutras sees independent quality management vendors thriving, as well as evolution in the manufacturing execution system (MES) market.
Some newer and established vendors of MES and manufacturing intelligence software are blending in aspects of corporate performance management to arrive at what Aberdeen calls Manufacturing Operations Management (MOM), says Jutras. “We are starting to see a convergence between what we might call manufacturing intelligence and corporate performance management,” she says.
But make no mistake, Jutras contends, the biggest ERP vendors are only getting bigger, buying up the large BI vendors, as well as building out other functionality.
“The ERP vendors—the major ones—are going after all these surrounding applications,” Jutras says. “And it's an attractive value proposition for the end user—especially the smaller companies.”
When big vendors don't fill a need—either because the niche is too narrow for their attention, or smaller vendors have hard-to-replicate technology—the smaller vendors thrive. In iPurity's case, the unique need was SaaS-based ERP that held manufacturing functionality, and could be configured by nontechnical users, says Nussle.
The solution's “glossary” functions, says Nussle, allowed iPurity to easily change manufacturing terms such as machine center, operator, job, and part number to construction terms like job site, welder, project, and materials—such as pipe. The configurations were driven by simple changes to fields.
“We may have pipe fitters accustomed to working in high-tech construction using the system, and they see the same terminology they are used to seeing,” Nussle says. “They don't even realize they are using a manufacturing system. They think it's a management system for the construction industry.”
The purpose of this tweaking, says Nussle, was to organize the resources and tasks involved in installing clean pipe facilities so that projects could be managed under lean principles. For example, says Nussle, the information in Plexus Online supports “5S” methods for tooling so that needed tools are in easy reach.
Meanwhile, the material requirements planning in Plexus Online is used for just-in-time materials management. According to Nussle, iPurity's CEO Kurt Gilson was intent on managing projects under lean methods rather than the traditional construction project methods Gilson experienced before founding iPurity in 2006.
In effect, says Nussle, Plexus Online's production management modules have been used to manage distinct construction resources so they can be recombined under a “Lego-block” approach.
“We used Plexus to standardize these components and the process for selecting them. Then our 3D CAD/engineering group can put the components together in an infinite variety of projects,” says Nussle.
The SaaS-based system and the methods it supports yielded roughly a 40-percent average in labor savings for iPurity and 62-percent quicker installation time versus conventional methods.
Nussle says a smaller vendor such as Plexus tends to lavish more attention on smaller customers compared to the ERP giants, while also being able to deliver needed functionality in areas like global sourcing. He adds that iPurity did, however, carefully check the capabilities of the vendor, even visiting its data center in Michigan.
Plexus isn't exactly a new vendor—its history actually goes back to 1995, and its Plexus Online solution launched in 2001 after originally being developed as part of an internal project at an automotive parts manufacturer.
Today Plexus concentrates 100 percent on its SaaS-based solution, rather than the custom development and integration work it cut its teeth on in the early years, says Patrick Fetterman, a company VP.
Other established vendors also reinvented themselves around SaaS. In configuration and quoting, for instance, Firepond sold on-premise solutions for years, but in the last couple of years, it has focused on SaaS.
AssurX , says Aberdeen's Jutras, is a quality management vendor that has expanded via a SaaS offering.
Zontec , an established vendor of statistical process control (SPC) software, offers a Web-based SPC solution that can be delivered through portable devices like Apple's iPhone. Corbit Harrison, a VP with Zontec, says the product is an outgrowth of the Web capabilities found in its Synergy 3000 suite, rather than a reinvention of the product line.
Harrison points out that mobile access to SPC trends expands Zontec's appeal. “We're talking not just to the quality manager, but also managers in supply chain departments or risk management,” he says.
Innovation also is evident in new twists on well-established technologies such as optimization. River Logic is a newer vendor of strategic business modeling and optimization software. Under its founder, Robert C. Whitehair, who spent 20 years developing decision-support systems for major enterprises, the company devised an optimization engine called constraint-oriented reasoning, or COR, which captures expert knowledge and embeds it applications with natural-language user interfaces.
COR is the engine that powers River Logic's Enterprise Optimizer product, which models a company's constraints and business dynamics, and applies that base model to various problems, says Carlos Centurion, a River Logic VP. “It's a way to bring together a lot of approaches to solving problems in one place, with one representation,” says Centurion.
In practice, River Logic's software often is applied to higher-level business planning, or can work in concert with other planning tools that already provide demand or capacity plans, but can't address certain problems.
“It might be that they would like to optimize the demand plan for profitability of the product mix and the customer or channel mix they are going after, but cannot do that with the systems they have today,” Centurion says.
New Momentum's Clifton sees ongoing opportunity for vendors that can address unsatisfied needs. And with SaaS, he says, users can test solutions without the massive implementation costs that created barriers to adoption in previous eras.
“I think the SaaS model will be very invasive to virtually all aspects of new software additions,” says Clifton. “We will attach [SaaS solutions] to the existing application frameworks, but we'll get there coming in the back way—by users deploying tools for a specific job.”
MBT's Emerging Vendors for 2008
Aegis Analytical Corporation
• Industry served: Process manufacturers
• Software basics: Discoverant Manufacturing Intelligence software helps process manufacturers access, aggregate, and analyze data on-demand from raw materials to final product.
• Benefits received: Discoverant enables companies to accelerate products to market, improve operating efficiencies and Quality by Design initiatives, and satisfy regulatory requirements.
• Industry served: Solutions for any company with an IT department that has a call center, or any company that has a need to manage inventory. Top five industry verticals include education, health care, manufacturing, government, and financial.
• Software basics: Alloy Navigator is a comprehensive IT infrastructure management suite offering two major areas of functionality: service support and asset management.
• Benefits received: Alloy Navigator streamlines inventory management and service requests through automation. This saves time and money, enables consistency, and enhances customer satisfaction.
• Industry served: Small to medium-size enterprises in any business market will find Apatar solutions useful.
• Software basics: Open-source data integration tool enabling users to easily link information between databases, applications, and top Web 2.0 destinations.
• Benefits received: No coding implementation; shortened implementation time; lower integration and maintenance costs; automated data integration process; improved data quality.
Aster Data Systems
• Industry served: High-tech, retail, insurance, communications, financial services
• Software basics: Aster nCluster is a high-performance analytic database for data warehousing and analytics that runs on off-the-shelf commodity hardware.
• Benefits received: Aster supports new applications and users monetizing large data volumes at the point of service delivery by enabling an always-on, high-performance, front-line data warehouse for deep insight.
• Industry served: Boomi serves all vertical industries, including manufacturing; and specializes in small and midsize businesses
• Software basics: Boomi On Demand is a fully on-demand integration solution that allows businesses to combine Software-as-a-Service and on-premise applications directly from the Web.
• Benefits received: Boomi On Demand dramatically reduces the time, cost, and complexity of integrating SaaS and on-premise applications.
• Industry served: Aerospace & defense, aircraft, telecommunications, financial services, heavy equipment, and manufacturing.
• Software basics: Application development and integration, quality assurance, network services, and managed services
• Benefits received: Immediate access to experts, proven processes, and methodologies; accelerated market delivery; enhanced performance and ROI; and significant cost advantage.
• Industry served: Financial services, insurance, manufacturing, retail, and technology
• Software basics: Scalable enterprise feedback management software that powers strategic feedback programs for a forward-looking outlook on business performance.
• Benefits received: Automates data collection and reporting across the enterprise to link customer and employee attitudes to business performance metrics and processes.
• Industry served: All manufacturing sectors
• Software basics: HiQube's business intelligence (BI) software delivers in-depth business analysis capabilities and reporting. It combines hierarchical, relational, and multidimensional BI technologies.
• Benefits received: Manufacturers can more effectively manage processes, improve workflows, gain centralized visibility into performance, accelerate innovation processes, and drive revenues.
• Industry served: Retail, high-tech, manufacturing, health care, financial services
• Software basics: On-demand business community management solutions, including supply chain software and technology platforms for the life cycle of vendor data management. Translation software for connecting systems, SOA B2B gateway software, and managed file transfer. Key products include Actionable Intelligence, Inovis Community Management, TrustedLink, and Inovis Catalogue.
• Benefits received: Solutions allow companies to optimize communications throughout trading communities. By standardizing and automating trading-partner interactions, companies reduce the cost of supply chain communications, solve supply chain problems faster, and better evaluate vendor performance.
• Industry served: Aerospace & defense, life sciences, industrial products, semiconductor, energy, shipbuilding
• Software basics: Pertinence Suite enables users on the shop floor and across the supply network to better collaborate on process definition, manufacturing execution, and quality management.
• Benefits received: Improved yields, reduced cycle times, accelerated time-to-market.
• Industry served: Metal fabrication, machining, consumer packaged goods, chemicals, plastics, food & beverage
• Software basics: FactoryMRI is an event-driven enterprise manufacturing intelligence software solution that fully integrates the enterprise with shop-floor resources, providing real-time performance information.
• Benefits: FactoryMRI enables manufacturers in complex, discrete, and process industries to achieve reduced manufacturing costs, increased productivity, and improved decision-making.
• Industry served: Financial services, supply chain/manufacturing, telecommunications, government, value-added networks/ASPs
• Software basics: MessageWay is an advanced managed file transfer system that consolidates B2B sprawl and establishes control and visibility of all file exchange traffic.
• Benefits received: Origin-to-destination control of file exchange, and communications that conform with security policies and government regulations.
• Industry served: Aerospace & defense, automotive and discrete manufacturing, consumer packaged goods, high-tech, pharmaceuticals, consumer appliances, and industrial automation
• Software basics: MindTree's manufacturing group provides application development & management services; package implementation and support independent testing services; and application integration & infrastructure management services across the value chain areas of product development, procurement & logistics, manufacturing & operations, sales & distribution, and after-sales service.
• Benefits received: The MindTree Value Proposition involves frameworks and solution accelerators that reduce development time and cost, and enable faster time-to-market.
Model N Inc.
• Industry served: High-tech manufacturing (semiconductors and electronic components)
• Software basics: The Model N High Tech Revenue Management Suite is an integrated enterprise solution for managing the end-to-end revenue life cycle of manufacturers.
• Benefits received: Delivery of a unified, transaction-focused platform that integrates people, processes, and data across the extended enterprise and regions to boost gross margins.
• Industry served: Manufacturing (supply chain, quality, value stream management, safety); oil & gas; telecommunications; health care
• Software basics: Interactive dashboard with Intelligent Metrics Processor presents both operations and business metrics (e.g. quality, safety, productivity) in real time. A SaaS-based operational performance management tool delivers data in context across business and its value streams.
• Benefits: “Single version of the truth” aligns behavior and ensures consistent view of business performance, which improves decision-making and productivity across the enterprise. The SaaS model ensures simple deployment and fast ROI.
• Industry served: Food & beverage, consumer goods, chemicals, manufacturing, automotive, pharmaceuticals, and medical
• Software basics: NineSigma's proprietary processes and consulting services establish a framework for companies' ongoing success at open innovation.
• Benefits received: NineSigma helps companies overcome technology challenges by connecting them with global innovators with solutions not readily available in the public domain.
• Industry served: Process manufacturing including chemicals, pharmaceuticals, and fabless semiconductor
• Software basics: Performix xMES (manufacturing execution system) is SAP-certified for integration with SAP applications. Performix xMES suite has flexible templates for both recipe management and manufacturing work-step execution.
• Benefits received: By leveraging SAP MII for integration with SAP solutions, Performix xMES eliminates data redundancy and increase the return on SAP investments.
• Industry served: financial services, insurance, government, telecommunications, manufacturing, and health care
• Software basics: Prolifics, the largest end-to-end systems integrator specializing in IBM technologies, provides expert services including architectural advisement, design, development, and deployment.
• Benefits received: Optimized manufacturing business processes, integrated systems for supply chain, and extended assets to distributors through B2B portals.
• Industry served: Automotive, high-tech, industrial machinery, mill products, oil & gas, chemicals
• Software basics: QlikView software delivers powerful visual business analysis without the limitations, cost, or complexity of traditional business intelligence tools.
• Benefits: QlikView enhances supply chain visibility, measures the performance of Six Sigma projects, and increases profitability through price waterfall analysis.
• Industry served: Consumer goods, aerospace & defense, automotive, technology, machinery, complex products, and any company that relies on CAD/CAM and PLM solutions.
• Services basics: Riverbed's Steelhead appliances and wide-area data services provide the highest level of WAN performance across the broadest range of applications.
• Benefits received: Accelerated development cycles, decreased development costs, and significantly reduced hardware costs. Data streamlining optimizes WAN traffic by removing redundant data and prioritizing traffic; transport streamlining improves TCP behavior; and application streamlining reduces application protocol inefficiencies and enables disconnected operations.
• Industry served: Used by 400,000 small and midsize companies in all industries.
• Software basics: Combines an IT help desk; community; and network inventory, monitoring, and reporting tools in one easy-to-use and free application.
• Benefits received: Easily manage an IT network; collaborate to solve technology problems; and find the best IT practices, products, and services.
• Industry served: Automotive, consumer goods, manufacturing, high-tech, distribution, financial services
• Software basics: Symphony Metreo's suite of enterprise pricing, operations, and revenue management solutions provides a unified approach to integrated business planning.
• Benefits received: Process-oriented solutions enable a forward-looking, collaborative, and cross-functional decision-making approach, resulting in a continuously synchronized and strategically aligned business.
• Industry served: Communication services, energy & utilities, financial services, health care, insurance, manufacturing, pharmaceuticals, retail, transportation & logistics, travel & hospitality
• Software basics: Tealeaf captures online user interactions, providing unprecedented visibility into site experiences to thrive against competition via an optimized Web site.
• Benefits received: Optimized sites increase adoption rates, reduced time required to resolve online issues, lower IT costs, and improved online support call resolution rates.
• Industry served: Retail; consumer packaged goods; forest/paper products; automotive; chemical; electronics
• Software and services basics: Services for complete logistics management outsourcing; intelligent transportation management systems (TMS); supply chain network planning and design; and high-quality brokerage services.
• Benefits received:
Transplace creates a new level of transportation efficiency by bringing together a larger critical mass of freight and carrier capacity than any single shipper, and applying industry-leading logistics technology to optimize freight while connecting all parties to the transaction via electronic Web-based connectivity.
• Industry served: B2B manufacturing, distribution, high-tech, and iIndustrial services
• Software basics: Zilliant Precision Pricing Suite combines the scientific analysis of transactional data with business software to improve all areas of pricing for B2B companies.
• Benefits received: Zilliant software helps B2B salespeople negotiate the most profitable pricing on every deal, improving margins by 15 percent and more.
Analyst perspective: Emerging vendorsstill targeting manufacturers
While not a comprehensive list, two veteran analysts recently interviewed by Manufacturing Business Technology anticipate emerging software solution categories with a focus on supply chain and manufacturing management. In some cases, the emerging vendors may be older vendors that have acquired or built new solutions that move them into an emerging category.
Cindy Jutras, a VP and group director for Boston-based Aberdeen Group ; and C. Dwight Klappich, a research VP with Stamford, Conn.-based Gartner , both have long experience with enterprise software solutions for manufacturers, having analyzed and worked within the industry for decades.
According to Klapplich, he particularly sees emerging vendors in supply chain management, namely:
Emcien : Software-as-a-Service (SaaS) targeted at industries with multiple products, particularly to help them forecast, plan, and optimize their option/configuration mixes.
HAL Systems : Project-based logistics and warehouse management software that allows enterprises—primarily in the energy sector—to move complex items while tracking and synchronizing logistics activities for projects.
Factory 2 Shelf : Software to assist consumer-oriented supply chains in reengineering their extended supply chains from point of demand (the consumer) to the point of supply (the factory door). According to Gartner, the solution involves business process design that supports a rewiring of how enterprises collaborate in retail supply chains.
Knoa Software : User-sensing technology that captures end-user interaction with an application at the graphical user interface level, measuring end-user response time and the actual end-user experience.
Optricity : Optimization-based applications focused on supply chain problems typically not addressed by mainstream systems such as order management, warehouse management, transportation management, and ERP. One example is its slotting solution used in warehouse management environments.
Stibo Catalog : Product information management software with its roots in catalog solutions, adding master data management capabilities for broader application.
Aberdeen's Jutras sees manufacturing operations management, or MOM, as an emerging category. Vendors of manufacturing execution systems (MES) and manufacturing intelligence solutions are evolving toward MOM by adding aspects of corporate performance management. Examples include:
Aegis Software : With its roots in MES, its iMonitor product offers Web dashboards to monitor enterprise, factory, and lines in real time.
Apriso : Also with roots in MES and warehouse execution, Apriso was one of the first vendors to use the MOM moniker to describe its capabilities, which include visibility, business process, and performance management.
Eyelit : A self-described vendor of enterprise MES, Eyelit's suite is said to offer capabilities for visibility, control, and coordination of manufacturing operations.
Geometric : Its portfolio holds MOM and manufacturing intelligence offerings, as well as product life-cycle management solutions.
iBaset : The vendor calls its Solumina suite an operations process management solution that covers process planning, plant-floor execution, and quality management.
Intercim : With a 25-year history, Intercim is no new kid on the block, but now goes by the MOM moniker. Key to this evolutionary move to MOM was Intercim's 2007 merger with Pertinence, a European manufacturing intelligence vendor.
Plexus Systems : This manufacturing-focused ERP solutions vendor goes to market under the SaaS model, which contains functionality for production performance and visibility. ( See feature article for more .)
Valor Computerized Systems : A self-described vendor of productivity improvement software for printed circuit board supply chains, Valor has solutions for process planning, shop-floor monitoring and control, and quality management.