Plex Systems Cloud Community Founded in 1995, Plex Systemsdeveloped out of a project initiated at an automotivesupplier. The company has expanded its customer base anddevelops software for a variety of manufacturing companies. Inparticular, Plex provides a complete, cloud-based ERP solution formanufacturing companies. Plex moved to cloud computing in 2000 anddeveloped its cloud strategy using the multi-tenant model versus ahosted environment. In a hosted environment, a separate system iscreated and managed for each customer, while in a multitenantmodel, there is only one system and each customer is a tenant inthe system. Plex chose this approach because it wanted toleverage customer enhancements. Because there is only onecopy of the Plex system, whenever an improvement is made to it, theupdate is available to all tenants. Plex makes sure enhancementsare designed to add functionality that might be valuable tomultiple customers, but customers are not required to adopt everyupdate. Customers can choose whether or not to adopt a changethrough simple configuration settings. While manufacturingenvironments are complex, Plex decided that users needed a simpleinterface design for the shop floor. The simple interface makes thesoftware easy to use. In addition, the interface is configurable soindividual users can organize icons and buttons and control themwith user authorizations as they are provided with Plex’s screenbuilding tool. A sample Plex screen is shown in Figure 8-6. Source Line: Plex Systems. FIGURE 8-6 Sample Plex screen(continued)

Another unique feature of Plex’s software is its pricing model.Many ERP companies price their software on a per-user basis. Plexsaw a problem with this approach: it encouraged companies to limitthe number of people who would interact with the software. Plex,however, wanted to encourage customers to use software. Inaddition, the company wanted to match its pricing to the real costsof transactions processed. In a seat license model, a customer mayminimize users but have the same volume of transactions as acustomer with many more users. Plex prices its software based onthe size of the business, whether measured by company revenue ortotal number of employees. Plex adjusts the amount of thesubscription on a yearly cycle. If a company suffers a downturn inbusiness—and its revenue or number of employees is reduced— thenits subscription is reduced. Of course, if the customer grows, sodoes its subscription. Plex has observed an interestingphenomenon with its customers. At first, new customers are hesitantto use a cloud system—they are concerned about data integrity whenall customers reside in a single system. But after a while,customers typically realize that other Plex customers actually forma community, and collaboration within the Plex community providesvalue. Rather than being a software company that is sales andmarketing driven, Plex has become a company where users, and theuser community, directly drive innovation, and all customersbenefit.

Questions:

1. How will SaaS affect large ERP companies such as SAP andOracle? Will their size and research capabilities allow SAP andOracle to gain dominance of the SaaS marketplace, or will ERPsystems be provided by a growing number of small companies, such asPlex, each providing specialized ERP packages specially tailoredfor specific industries?

2. Will Fortune 500 companies eventually leave SAP ERP for SaaSsystems? Will they adopt SaaS products from smaller providers? Willthey use Business ByDesign? Or will companies like SAP and Oraclemigrate their current large ERP packages to an SaaSenvironment?

Answer rating: 100% (QA)

1 First of all SaaS from small companies doesnt affect big companies The bigger fishes have the market already captured There are multiple enhancement... View the full answer