With 10.8 per cent annual growth, supply chain management (SCM) and procurement applications outpaced most software markets to total US$9.9 billion in 2014, according to Gartner. The SCM and procurement software market experienced solid growth through sustained application demand, as supply chain remains a key source of competitive advantage in driving business growth objectives, such as improved customer satisfaction, greater business agility and operational improvements.
“Organisations modernising supply chains drove opportunity for both large-suite and specialised providers to become more agile and drive innovation within their businesses during 2014,” said Chad Eschinger, research vice president at Gartner. “SCM products delivered as cloud showed above-market growth of 17 per cent, while new on-premises licenses also grew significantly at nine per cent, as organisations sought to modernise their supply chain portfolio through a variety of delivery models.”
SAP grew 19.9 per cent to hold onto the top spot, and extended its lead within the SCM market, with 25.8 per cent market share. It continues to innovate and introduce new and acquired SCM products to the market, and has been able to up-sell solutions within its large and established ERP installed base. While Oracle retained its position as the second-largest provider of supply chain technologies and the largest within supply chain execution (SCE), its software revenue momentum has waned, and market share has declined to 14.6 per cent, from 16 per cent in 2013.
In generating revenue of US$438 million in 2014, JDA Software sustained its market share ranking of third globally, with 4.4 per cent of the global market, and remains the largest pure-play, supply chain-focused vendor despite a decline of 1.7 per cent since 2013.
Overall, the SCM market is fragmented, with the top 10 vendors maintaining about 55 per cent of total market share. Collectively, the remaining 57 vendors experienced annual revenue growth of 9.6 per cent, indicating not only opportunity in the market created by acquisitions, but also strong demand for specialised offerings that are competitive, and often complementary, to the larger-suite providers’ products.
“For the most part, building off several years of vendor consolidation, 2014 represented a favourable environment for supply chain technologies,” said Mr Eschinger. “The 2012 strategic acquisition and business combination activity of SAP and JDA Software demonstrated growth and stability during 2014, as organisations became more comfortable with the vendors’ direction and messaging. However, we can expect a new wave of acquisitions to continue to drive market disruption in 2015.”
Additional information is available in the Gartner report “Market Share Analysis: Supply Chain Management and Procurement Software, Worldwide, 2014.”