Over a Year After Rockwell Automation’s Acquisition of Plex Systems: How are Things Looking?

Towards the end of 2021, Rockwell Automation acquired Plex Systems for US$2.22 billion. Plex Systems, founded in 1995, offers a range of cloud-native Software-as-a-Service (SaaS) solutions, which includes Manufacturing Execution System (MES), Enterprise Resource Planning (ERP), Supply Chain Planning (SCP), Production Monitoring, MES Automation & Orchestration, and Asset Performance Management (APM) software. Plex Systems was ranked as the overall leader and top innovator in ABI Research’s most recent competitive assessment of the MES market (CA-1367). Through its acquisition of Plex Systems, Rockwell Automation looked to develop its Connected Enterprise Strategy and augment its portfolio with a greater number of cloud-based solutions. At the same time, Plex was able to gain access to Rockwell’s large and established client base.

Plex leaders have been brought on long-term into prominent positions within Rockwell and are informing the company’s strategic decision making. The acquisition was not just one of technology, but one of talent. Marking the shift of this new closer integration is the recent change in Plex System’s name. Prior to 2023, it was known as “Plex, a Rockwell Automation Company”, and now has been transitioned to “Plex, by Rockwell Automation.”

Rockwell is going to market with a Hybrid MES positioning that allows companies to select either an on-premises or cloud MES solution. This approach leverages the strength of the FactoryTalk portfolio for on-premises (or private cloud) and highly engineered MES solutions, while the Plex cloud MES solution can be deployed to sites that want to be fully digitized with flexible configuration options and a fast time to value. Rockwell is converging the two solutions by integrating existing modules such as Plex Quality Management System (QMS) with FactoryTalk and developing new capabilities with an Application Programing Interface (API)-first approach. The first module in development is Finite Scheduling, which is based on the Plex supply chain planning solution and will feature Machine Learning (ML)-based optimizations, which is a key area of Rockwell investment. In addition, the company is working to converge its User Experience (UX) around the Rockwell Flourish design system and to unify and support analytical insights from its MES portfolio with the newly announced strategic partnership with Cognite and their industrial DataOps platform.

The Rockwell and Plex combinations have seen some successful wins in the past year, primary examples being a major global automotive tire manufacturer and a global aluminum manufacturer. Rockwell is keen to position itself as a first mover within the Electric Vehicle (EV) manufacturing industry, a market that is projected to see significant growth over the next decade, with ABI Research forecasting a growth in sales revenues from US$12.9 million in 2023 to US$71.6 million in 2035, a compound annual growth rate of 15.4% (MD-EV-101). Rockwell has already made some key wins in this market. Other core market focuses for the Rockwell and Plex teams are food and beverage, Consumer Packaged Goods (CPG), and life sciences.

The combination of Rockwell and Plex provides Rockwell with a unique position in the MES market, notable elements including the company’s diverse and comprehensive set of pricing options spanning perpetual licenses and user-based pricing for the FactoryTalk Production Center products, as well as the SaaS, both revenue-based and user-based, for the Plex portfolio. Plex’s revenue-based pricing was identified as an innovative go-to-market strategy in ABI Research’s MES competitive assessment (CA-1367), where the solution is priced relative to the percentage of plant revenues and includes unlimited users (including both supplier users and customer users), meaning that the pricing solution is directly tied to the successes of the manufacturer, more closely aligning software cost to investment outcomes. Rockwell and Plex are continuing to diversify their pricing styles to lead the market, with the company now offering a new SaaS platform and user-based pricing model for Plex, where customers can purchase specific modules such as core MES alongside additional quality management, maintenance, tooling, labor and workforce management, asset management, and production monitoring modules, among others. This allows manufacturers to initially target their key pain points by only selecting the necessary MES, Quality Management Systems (QMS), or other modules, and then scaling up the deployment when they see Return on Investment (ROI).  

Rockwell’s growing partner ecosystem adds to the Plex acquisition by extending functionality into other environments. For example, with Kezzler, which provides a SaaS platform for supply chain traceability, manufacturers can effectively track their production from raw material sources to point of sale, providing manufacturers with truly comprehensive end-to-end software coverage. This combined offering is well suited to life science and food and beverage manufacturers who need to meet high regulatory and quality standards.

MES providers need to ensure that their products are reactive to changing customer needs, alongside plugging innovation gaps such as low/no-code applications, modular cloud-native SaaS designs, and flexible pricing structures. Rockwell has achieved significant success on this front with its acquisition of Plex, whose solution effectively complements Rockwell Automation’s strong on-premises and traditional MES capabilities with a rapidly deployable, cloud-native design. Other market leaders, such as GE Digital and Dassault Systemes, should take account of the success of Rockwell’s acquisition and seek to bolster their own portfolio offerings with strategic acquisitions of innovative pure play vendors in target market verticals.