Supply chain software sees strong growth and SAP stays market leader, says Gartner
June 2, 2015
With 10.8 per cent annual growth, supply chain management (SCM) and procurement applications outpaced most software markets to total $9.9bn 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 offerings delivered as cloud showed above-market growth of 17 per cent, while new on-premises licences 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 upsell 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 $438 million in 2014, JDA Software sustained its market share ranking of third place, 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.
In fourth place is Manhattan Associates and the fifth largest in this market is Epicor, both with less than two per cent market share.
Overall, the SCM market is fragmented, with the top ten 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' offerings.
"For the most part, building off several years of vendor consolidation, 2014 represented a favourable environment for supply chain technologies," said 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."
• Gartner has released the findings from its 11th annual Supply Chain Top 25, identifying global supply chain leaders and highlighting their best practices. The top five include three from last year – Amazon, McDonald's and Unilever – one returning leader, Intel, and a newcomer to this elite group, Inditex.
The top 25 are in order Amazon, McDonald’s, Unilever, Intel, Inditex, Cisco Systems, H&M, Samsung Electronics, Colgate-Palmolive, Nike, Coca-Cola, Starbucks, Walmart, 3M, PepsiCo, Seagate Technology, Nestlé, Lenovo Group, Qualcomm, Kimberly-Clark, Johnson & Johnson, L’Oréal, Cummins, Toyota Motor and Home Depot.