The rebound in the supply chain technology market over the last three years is driven by two factors:

The trend to replace older technologies represents an opportunity for technology and service providers to broaden their share of the market. End users are looking for more functionality, and a fundamentally different approach to application architecture is causing them to consider vendors not now in their application portfolios. The penalty for delaying the painful transition to Service Oriented Architecture (SOA) based platforms will be felt by many vendors as companies make the decision to replace entire technology stacks.

Survey respondents told us that the increase in supply chain technology spending will be roughly split between replacement and net new adoption (see Exhibit 1). European companies, particularly those over a billion dollars in revenue and in the process or service industries, are more pre-disposed to buy new technologies than their U.S. counterparts. Of mid-market companies in the aggregate, almost half say they will be adding new technologies to their application portfolios. A window of opportunity is opening for technology vendors eyeing to grow revenue in this sector. And judging by the aggressive marketing programs of ERP vendors like SAP, Oracle, Infor, and Microsoft, they are all working to position themselves favorably.

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