Despite economic challenges, the worldwide supply chain management (SCM) software market grew 7.1 per cent to US$8.3 billion in 2012.
The Australian supply chain management software market grew 17.9% to reach A$176.8 million in 2012, up from A$149.9 million in 2011.
During 2012, IT budget decision makers remained highly cautious overall, but supply chain investments kept their priority status and moved forward.
"While IT budget scrutiny and global economic conditions are moving cost-reduction back to a main business driver, supply chain remains a key source of competitive advantage in driving business growth objectives," said Chad Eschinger, research vice president at Gartner.
"North America and Western Europe continue to be the prime consumers of SCM software, with nearly 77 per cent of market revenue. However, Western European growth slowed and Asia/Pacific continued to experience robust growth, reflecting a shift toward investment in technology in emerging-market manufacturing centres."
SAP retained its No. 1 market share position in SCM in 2012, with an 11.6 per cent increase in US dollars. SAP held 20.8 per cent of the market and reached USD 1.7 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 had another good year in its supply chain business, growing 12.1 per cent and reaching $1.5 billion in revenue during 2012. JDA Software retained the third spot in 2012, exhibiting strong new sales and increased average sales price through most of the year.
Note: Gartner's methodology, which converts US dollars from euro-based income statements for software sold during 2012 globally, has reduced 2012 growth for vendors reporting in non-U.S. dollars. Source: Gartner (May 2013)
In a highly fragmented market, the top five SCM software vendors maintained their status quo over smaller competitors in 2012, accounting for nearly 50 per cent of revenue. This consistency in share occurred despite the market consolidations that happened in 2012 — the most significant of which was SAP acquiring Ariba in October. The other major acquisition took place in December 2012 between RedPrairie and JDA Software, creating the largest supply-chain-focused vendor and further consolidating the top of the market.
Software-as-a-service (SaaS) SCM offerings showed above-market growth (13 per cent in 2012), while perpetual new licenses experienced slower growth of 3.5 per cent, as organisations focused on fast implementation at a lower upfront cost.
Additional information is available in the Gartner report "Market Share Analysis: Supply Chain Management Software, Worldwide, 2012."
Gartner Supply Chain Executive Conference
Analysts will be discussing the future direction of the supply chain industry at the Gartner Supply Chain Executive Conference, August 12-13 at the Grand Hyatt Melbourne.
