42Q, a Pure-Play Cloud Provider, Could be an MES Market Disrupter


Archived Published: 04 May 2016 ID: G00308118

Analyst(s):

  Free preview of Gartner research

Summary

As cloud-based manufacturing execution system capability becomes a necessity for manufacturers moving to improve plant visibility in their supply chains, 42Q is well-positioned to succeed.

News Analysis

Event

On 3 May 2016, 42Q was launched as the first pure-play multitenant cloud-based manufacturing execution system (MES) provider.

Analysis

MESs are predominantly on-premises applications, due to the need for real-time data acquisition and as close to 100% availability as possible. When the system goes down, work stops. This accounts for the low adoption rate of cloud-based MES — just 5% to 8% of the market. 42Q is attempting to change that, as the first example of a pure-play, cloud-only MES. 42Q MES was created as an internal system for contract manufacturer Sanmina. It has been implemented in discrete manufacturing environments that are build-to-order, configure-to-order and build-to-stock over the past four or five years. Although 42Q MES is installed in 40 factories in 15 countries, it remains largely unproven in the broader market, so the company’s support and services capabilities for a larger constituency remain to be seen. Additionally, some of the claims of “real time” data acquisition and minimized data latency are largely unproven, as is the proprietary technology that 42Q developed to support it.

While cloud capability may be rare in MES, remote hosting is not, with 38% of companies in a recent survey reporting centrally hosted MES serving multiple sites (see "Survey Analysis: MES as a Platform for Supply Chain Collaboration" ). Vendors are adapting their offerings to provide "hybrid cloud" deployments, with cloud services (reporting and analytics for example) atop on-premises MES. Adoption of cloud or hybrid versions has been slow. Only a handful of vendors have more than 10% of their installed base in the cloud. A notable exception is Plex Systems, a multitenant cloud-based ERP/MES business suite, which also offers "stand-alone" MES capability as part of a two-tier ERP/MES environment.

Yet, as manufacturers move to make their plants more visible in their supply chains, cloud-based MES capability becomes more of a necessity. The inherent benefits of multitenant cloud implementation include lower IT costs, faster implementation and increased data visibility. These represent a strong competitive advantage for any company offering cloud-based MES. In turn, the availability of cloud-based manufacturing data is a competitive advantage to manufacturers looking to improve supply chain performance through manufacturing/supply chain collaboration.

Still, scaling, security and other issues remain:

  • While manufacturers have historically been uneasy about MES in the cloud (and some still have concerns about intellectual property protection), there is a market to be served if 42Q can overcome those concerns.

  • While 42Q offers traceability (a key feature for regulated industries) and a library of 150-plus machine interfaces, it remains to be seen if it can succeed in multiple industries. It also remains to be seen if 42Q has the bandwidth — both technically and as a business — to take on large multisite MES implementations. Regardless of the benefits of multitenant cloud technology, at some point, the MES still needs to connect to on-premises production tools and systems, where uniqueness reigns.

There is a growing market for this technology throughout the supply chain of large original equipment manufacturers (OEMs), as well as in plants and divisions of larger companies. 42Q is entering this market at the right time, with a compelling offering.

Recommendations

  • Discrete manufacturers: Add 42Q to your list of MES vendors when evaluating new or replacement MES.

  • Process (batch) manufacturers: Consider 42Q for your MES requirements, but make sure that it can provide the bandwidth to support your process automation needs.

Gartner Recommended Reading

© 2016 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartners research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

Why Gartner

Gartner delivers the technology-related insight you need to make the right decisions, every day.

Find out more