Gartner: Supply Chain Management Software Market Grew 10 Percent to Reach US$6.8 Billion In 2010

The worldwide supply chain management (SCM) software market returned to double-digit growth in 2010, as SCM software revenue totaled US$6.8 billion in 2010, a 10 percent increase from 2009 revenue, according to Gartner, Inc. In 2009, the market declined 2.1 percent with revenue at US$6.1 billion.

Asia Pacific and Latin America experienced robust growth in 2010 that significantly outpaced the market average. Spending on SCM software in Asia Pacific grew 22 percent to reach US$569 million. In Australia, the market grew 17.8 percent to A$148.8 million. However, North America and Western Europe continued to be the prime consumers of SCM software in terms of dollars spent, with nearly 79 percent of market revenue.

"Despite a difficult selling environment, the current market for SCM shows signs of renewed health. The market for supply chain applications was more resilient than most in 2009 and rebounded well in 2010," said Chad Eschinger, research director at Gartner. "Pure-play vendors and specialized (point solutions) vendors drove a majority of the overall market's growth in 2010, outpacing enterprise resource planning (ERP) suite providers' growth three to one, and, in general terms, we are seeing consistent momentum across all market segments."

SAP continued to lead the SCM software market, as it accounted for 19.5 percent of the worldwide market (see Table 1). Oracle was the No. 2 vendor with 17.9 percent market share. JDA Software experienced the strongest growth among the top five vendors, with 40.2 percent growth in 2010.

Table 1

Top Five SCM Software Vendors by Total Software Revenue, Worldwide (Millions of U.S. Dollars)

Source: Gartner (May 2011)

"Vendor movement has been characterized by partnering, some new sales emphasis beyond North America, and improved packaging and delivery options, as well as by new product releases," said Mr. Eschinger. "Through 2010, SCM product development was generally focused more on solution integration, business process platforms and mobility. Vendors continued to show signs of resiliency and innovation, as some vendors transformed themselves to support changing user requirements and expanded their 'reach' into additional SCM markets."

Additional information is available in the Gartner report "Market Share Analysis: Supply Chain Management Software, Worldwide, 2010." The report is available on Gartner's website at http://www.gartner.com/resId=1651415.

Gartner research vice president Marcus Blosch will speak in the CEO Forum to be held at the SMART Conference 2011, 25-26 May at the Sydney Convention & Exhibition Centre. Dr. Blosch will talk about building flexibility into supply chains in light of shifting demands and a changing global environment. For more information, visit http://www.smartconference.com.au/program-speakers?article=17679

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