Gartner Says Worldwide Supply Chain Management and Procurement Software Market Grew 7.3 Per Cent in 2013
Key Issues Facing the Supply Chain Industry to Be Discussed at the Gartner Supply Chain Executive Conference 2014, 10-11 September in London
"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," said Chad Eschinger, research vice president at Gartner. "The impact of cloud on traditional on-premises license sales outside of the procurement market, which is heavily influenced by software as a service, 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."
SAP retained its No. 1 market share position in SCM in 2013, with a 24 per cent increase (see Table 1). SAP held 23.9 per cent of the market and reached $2.14 billion in software revenue. SAP has been the market share leader within the aggregated supply chain market for more than a decade. Second-place Oracle's growth in its supply chain business during 2013 was relatively flat from 2012. It retained its position as the second-largest provider of supply chain technologies, growing 0.1 per cent and reaching $1.46 billion in revenue during 2013. JDA Software retained the third spot in 2013, which was a year of transition as it worked through product rationalisation and integration of several years of acquisitions and the 2013 merger with RedPrairie.
In the highly fragmented market, the top 10 vendors experienced a slight shift due to acquisitions, but maintained, in essence, the status quo over smaller competitors in 2013, and accounted for 55.3 per cent of the market. Collectively, the remaining 58 vendors experienced annual revenue growth of 18.3 per cent, not only indicating opportunity in the market created by acquisitions, but also indicating strong demand for specialised offerings that are competitive, and often complementary, to the larger-suite providers' offerings.
"While acquisition activity has further consolidated the top 10 market share, it has also opened opportunities for smaller, best of class (BOC) vendors," said Mr Eschinger. "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."
Additional information is available in the Gartner report "Market Share Analysis: Supply Chain Management and Procurement Software, Worldwide, 2013." The report is available on Gartner's web site at http://www.gartner.com/doc/2729617.
The future direction of the supply chain industry will be discussed at the Gartner Supply Chain Executive Conference 2014, held from 10 to 11 September in London. For additional information about this conference, please visit http://www.gartner.com/technology/summits/emea/supply-chain/. Media can register to attend by contacting email@example.com.
Additional information from the Summit will be shared on Twitter at http://twitter.com/Gartner_inc and using #GartnerSCC.
Gartner UK Ltd
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