Asia Pacific led global SCM market growth
Despite economic challenges in the US and European markets, the global supply chain management (SCM) software market grew 7.1 per cent to $8.3 billion in 2012. The report noted that the growth was triggered by the Asia Pacific market and even though IT decision makers in several parts of the world remained highly cautious last year, supply chain investments remained one of their key priorities.
“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. He believed that 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 centers.
SAP retained the top position in SCM in 2012, with an 11.6 per cent increase in its market share reaching $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.
According to Gartner, in the 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 last year. 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 13 per cent market growth in 2012, which was above average, while perpetual new licenses experienced slower growth of 3.5 per cent, as organizations focused on fast implementation at a lower upfront cost.
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