Sramana Mitra: How is your product architected? Do you have a broad horizontal platform and do you then do these customizations on top of that?
Himanshu Palsule: Largely. We have a broad portfolio of products. We have quite a few ERP products across the world. Typically, the product that we’ll end up talking about is a product like Epicor ERP E10, which is part of our flagship product. There are other products like Scala and Eagle that play in specific verticals. To answer your question, E10 is built on a platform and an architecture that allows it to scale. This product is available in multi-tenant SaaS and is available across 35 countries supporting local tax legislation.
Then we have either built, purchased, or partnered specific add-on verticals that integrate into this product. Mattec is an example of a vertical that does high-speed plastic injection moulding. AEP is a product that does estimating for the paper industry. Senior Living Services (SLS) provides healthcare. In my opinion, to be good at a vertical, you need to understand it. You need to be part of that ecosystem. Then you either need to develop or buy the expertise to really win in that market. That’s how we defined our sweet spot and target market and then either built or acquired add-ons to penetrate that vertical.
Sramana Mitra: The vertical cloud trend is something we have picked up for a while. We’ve already seen several interesting companies out of that trend in general. Veeva Systems, for example, did very well in the healthcare space. Pharma CRM is their positioning.
How do you lead the vertical cloud trend? What do you think are the drivers? In your case, you’re positioned as vertical ERP. Where does ERP stop for you?
Himanshu Palsule: That’s a great question. I believe that the adoption of the cloud has been driven by the complexity of the business processes that it has solved. Single business processes such as payroll were the first to go into the cloud. Then slightly more complex business processes like CRM and business intelligence were the next to move into the cloud. They are logical. They were functions within the organization that benefited from that. ERP, in many ways, has been an outlier until the last 12 or 18 months.
We are now starting to hit that inflection point where the entire end-to-end business process is starting to move into the cloud. Within that, I believe the ones that are more generic in nature like broad professional services companies who basically need financial accounting but didn’t have inventory were the next to go. The last holdout were companies that were very niche like injection plastic moulding, for example. We found, in all our research, that all those people were held back because of the complexity of the operation and the environment that they needed to integrate in.