State of Manufacturing ERP - Part 2, vendor profile - Kenandy

Profile picture for user brianssommer By Brian Sommer May 9, 2017
In the first part of our State of Manufacturing ERP series, we set the stage in terms of macro market conditions. In this next part, we profile Kenandy at a fairly high level.

chuck berger - CEO kenandy
Chuck Berger - CEO Kenandy

Kenandy is a manufacturing ERP solution built off the Salesforce platform (Force). The platform allows Kenandy to quickly create new and enhanced functionality as well as rapidly instantiate and convert new customers to their multi-tenant cloud solution.

Over the last year, Kenandy grew 200% (YoY).  It has raised a total of $55 million in venture capital and its backers include Silicon Valley powerhouses Kleiner Perkins Caulfield & Byers, Salesforce Ventures and Lightspeed Ventures. Kenandy’s founder is Sandra Kurtzig. She previously founded Ask, makers of the ManMan ERP software product line.

I recently interviewed Kenandy’s CEO, Chuck Berger. He came to Kenandy about 18 months ago. Prior to Kenandy, he was president and CEO of  Extreme Networks, a network technology manufacturer that interestingly used Oracle application software.

When asked about Kenandy’s recent growth, Berger stated that customer count in 2016 increased by 5X and recurring revenue has grown by 10X. Taken together these data points suggest that organic growth is up materially, churn is minimal and that average deal size is also growing. Average deal size grows because of two factors: the vendor can now sell more discrete applications/customer and/or the vendor is selling to larger firms.

See part 1 of this series

Berger indicated that Kenandy is focused on mid-market manufacturers and distributors. But, he also added that the solutions are being considered at ever-larger firms. One prospect has revenues in the tens of billions. Conglomerates are now a target market for Kenandy. I suspect these will mostly be two-tier ERP deals.

Berger was relatively complimentary towards other pure-play cloud ERP competitors. However, he saw a few trends involving competitors. These included:

  • CEOs (not CIOs) are driving a greater number of replacement decisions. CEOs see the growth they want to enable in their firms and they want IT working on more strategic activities than just patching/maintaining old on-premises code.
  • CEOs also want out of the data center business and desire a scalable public cloud solution that works in a utility computing mode.
  • First generation cloud solutions were either hosted on-premises port-over products or cloud products built on proprietary platforms. Both of these are getting long in the tooth and weren’t designed for a business world that wants really big data, algorithms, analytics, machine learning, etc.

When I asked about their competition, Berger mentioned Plex, NetSuite and business-as-usual as the most common players. Interestingly, business-as-usual was identified as their most common competitor. We also briefly discussed other solutions like Sage X3, IFS and Infor.  Infor seems to be a rich mine of prospects for Kenandy. Their multiple products and large installed base makes their customers particularly attractive.

Berger believes that speed of execution and low cost are keys to their success.

Kenandy is making big channel changes. The company wants a certain kind of implementation partner and partners that advise companies on best practices, controls, etc. They do not want partners that just push a solution whether it fits the customer’s needs or not. They recently hired away a channel executive from competitor Rootstock and have recruited former Oracle and Microsoft partners, too. Long-term, Kenandy wants partners to deliver its implementation services so that the company can focus on its core competency: manufacturing technology innovation.

At the end of our interview, I asked Chuck to tell me three things he absolutely wanted readers to know about Kenandy. They are:

  • The company has experienced explosive growth in 2016 which he expects to eclipse in 2017
  • The best cloud ERP solutions must be built on a platform with a vendor that has a vision for things like IoT, social sentiment data, AI (like Salesforce’s Einstein), etc.
  • Kenandy is the first firm in a long-time to bring a differentiated ERP solution to market.

Well, I’m sure a couple of competitors will disagree with the last point but that’s what makes for a great software market.

In the meantime, check back Friday when we profile IFS.