Kurtzig hands over reins as Kenandy CEO

A pioneering enterprise software CEO who in 1981 became the first woman to take a tech company public yesterday revealed she is stepping down as CEO of her latest venture, manufacturing cloud ERP vendor Kenandy. But that's not important, declared Sandy Kurtzig when we spoke earlier this week:

In some ways it's a non-story.

I announced internally within the company almost a year ago it was time to find my replacement as CEO. When I first took funding in 2011, I contracted to stay two years.

This has always been my agenda: to get the company going and get the product accepted so that I could move up to executive chairman.

Instead, she insisted, the focus should be on Chuck Berger, formerly CEO of Extreme Networks and who joined as Kenandy's new CEO on September 1st, less than a month after interviewing for the job. Berger's experience, background, skills and personality were the right fit for the role, she explained.

After 25 years as a CEO I can tell you there's some things you just do intuitively. We didn't have time to train somebody up.

Winning deals

After just six days in post, Berger was already able to give me a succinct summary of the issues that bring customers to Kenandy, which Kurtzig told me has been winning deals against SAP, Oracle and NetSuite. Berger elaborated:

I was on a sales call with a $42 billion company that has made a decision to get off of SAP — after running their business on it for twenty years — based on the fact that they're changing so quickly, SAP can't keep up with it.

SAP has become a force that is slowing them down and they just can't tolerate it any more.

Another is a $40 million company planning to be $250 million company, growing out of Quickbooks. They want a system that can scale with their very rapid growth aspirations.

At [previous employer] Extreme Networks we upgraded from Oracle 8 to 11g and it was an incredibly painful process. It cost a huge amount of money and cost a year to do. Then we acquired a company that was on SAP and more than a year later it's still work-in-progress and significantly impacting the business — because the rigidity of those systems is so strong that trying to get one or the other of them to do something different is just massively challenging.

Philips [the healthcare giant] is moving a business unit that runs SAP onto Kenandy [for customer engagement]. The ability to adapt and evolve business models very quickly has been a hallmark for us.

That flexibility comes from Kenandy's architecture, explained Kurtzig. When the company was founded four years ago, it chose to build its software on the Salesforce platform rather than from the ground up. Kenandy then created business functionality using what it calls a 'wide-body' object model, which it says makes it easier to adapt processes and data flows as needed.

ERP replacement

Many customers are moving off older ERP systems that can't adapt to modern business needs, said Kurtzig. Some are midmarket companies looking for a complete ERP replacement, while others are larger enterprises, often consumer packaged goods (CPG) makers, looking for more agility in certain divisions.

Kenandy appeals because of its scalability — the software is built to cater to the needs of large enterprises and then "templated down" for smaller companies, she said — and because it is able to interface with legacy on-premise systems elsewhere in an organization.

Every single piece of ERP software in the ERP space is going to be replaced over the next 10 years so it depends on where each company is in the stage of that replacement.

Although Kenandy is targeting manufacturing, Kurtzig dismissed the notion that it should be seen as part of the move to offer industry-specific cloud applications, a theme that Kenandy's platform partner Salesforce is championing at its Dreamforce conference next week. She told me:

They started this industry cloud idea because that's something they did [when they used to work] at Oracle. I think it's a good idea but I think we have to wait and see. It's still not as baked as would be necessary.

Customers expect an application, and they expect it to be working. They don't want a framework.

We have one ERP platform that can go across multiple industries. We do order-to-cash across the board so I wouldn't call it just manufacturing. We do focus on product companies as opposed to service companies.

My take

It's been interesting to watch Kenandy emerge in just four years as a player offering a broad manufacturing ERP solution that can attract large enterprises including Del Monte and Philips. We have previously written about two other customers, sewing machine business Merrow and energy storage specialist Primus Power.

Interesting also to see that Kenandy is just as lukewarm about the industry cloud concept as Rootstock, the Salesforce platform's other manufacturing ERP provider, who we profiled earlier this week.

Interesting too that they both cite adaptability and flexibility as their main selling point against more established conventional ERP vendors. The main takeaway is that those incumbent vendors need to worry that they have left their move to the cloud too late. A new generation of vendors is emerging that stands ready to reap the gathering crop of enterprise that need their businesses to move and adapt faster than their current systems allow.

[Updated 9/12/2105 to amend and correct customer examples].

Disclosure: NetSuite, Oracle, Salesforce and SAP are diginomica premier partners. I am traveling to Dreamforce as part of a paid consulting engagement with Salesforce ISV partner Vlocity.

Image credit: supplied by @kenandy.