Supply Chain Software Market Grows 7.3%; Small Vendor Sales Up 18.3%
The global supply chain management and procurement software market grew 7.3 percent to $8.9 billion last year, with small vendors combined significantly outpacing the overall industry growth rate, according to Gartner.
Supply chain investments remained a high priority even as IT budget decision makers continued to exercise caution.
“Both influences have impacted strategic planning processes and have resulted in stronger price-based competition and smaller contracts. Cloud and subscription-based pricing is shifting revenue streams and influencing growth,” Chad Eschinger, Gartner research vice president, said.
“The impact of cloud on traditional on-premises license sales outside of the procurement market, which is heavily influenced by software as a service (SaaS), is minimal today. Hence, while growth rates are high, the starting point is much lower and many of the deals are for specific functionality, rather than full suite deployments,” he said.
SAP held onto the top supply chain management software market position last year, with 24 percent revenue growth and nearly 24 percent market share, Gartner said. Oracle remained second in market share, with more than 16 percent, while revenue growth was relatively flat, according to Gartner. JDA Software, which acquired RedPrairie, was third largest, with a 15 percent market share.
The top 10 vendors accounted for 55.3 percent of market share, Gartner reported.
The 58 other vendors combined saw 18.3 percent revenue growth, indicating high demand for specialized offerings, Gartner said.
“While acquisition activity has further consolidated the top 10 market share, it has also opened opportunities for smaller, best of class vendors,” Eschinger said. “These opportunities stem from users looking for alternative solutions to the larger vendors, as well as fear, uncertainty and doubt associated with the initial phases of a merger and acquisition. Typically, there is a 12- to 18-month window of enhanced opportunity for competitors. This is evident in the 2013 results, with BOC providers, collectively, more than doubling the growth of the overall market.”
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