Major enterprise software and automation vendors may be lamenting the recession's impact on manufacturers' technology spending, but not all technology providers are feeling the pinch - yet, anyway.
A handful of small vendors, most with best-of-breed products that target specific manufacturing pain points, report they are enjoying rapid growth and profitability despite the global downturn. Providers of finite production planning and scheduling, business intelligence, manufacturing-specific ERP, and industry-specific product lifecycle management tools are among those bucking the downbeat economic news.
"So far, our solid growth has continued into 2009, and we haven't seen a slowdown," said Mike Novels, president and CEO of Preactor International, a U.K. based vendor of finite planning and scheduling software.
"Manufacturers are not going for big-bang ERP implementations, but they are investing in trying to improve what they have and in cutting costs and better serving customers. Our production scheduling tools can help with that."
Preactor, which sells its software indirectly through consultants and ERP software OEM partners, such as Sage, Syspro, and QAD, reported 2008 sales of about $7 million, up 21% from 2007 sales. Preactor added 250 new customers last year, many of which wanted to cut manufacturing changeover times and improve customer service, Novels said. While sales to companies in particularly hard-hit industries, such as automotive and construction, have been impacted by the recession, other industries, such as pharmaceuticals and packaging, have more than picked up the slack, Novels said.
Also reporting continued strong growth despite the recession are manufacturing-centric ERP software vendors IQMS and Plex Systems Inc. IQMS, a 20-year-old vendor that targets medical device, automotive, aerospace, plastics, and consumer goods manufacturing customers, ended 2008 with double-digit profitability and a 10% increase in new customer accounts for the year.
The company attributed much of its momentum to its focus on integrating plant floor equipment directly into its ERP applications.
Also continuing to enjoy growth is Plex Systems, which, in 2008, grew revenue 33% and is seeing similar growth so far in 2009, said Executive Vice President Tom Mackey. Plex's growth is attributable in part to the company's software-as-a-service deployment model, which allows manufacturers to deploy a modern ERP system with little up-front capital investment.
"This [growth] would not have happened if we were not a SaaS company," Mackey said.
Plex has also benefited from expanding its customer base beyond its traditional automotive market to include food and beverage and medical instrument markets, Mackey said.