Gartner Says Worldwide Supply Chain Management and Procurement Software Market Grew 10.8 Percent

With 10.8 percent annual growth, supply chain management (SCM) and procurement applications outpaced most software markets to total $9.9 billion in 2014, according to Gartner, Inc.

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.

“Organizations modernizing supply chains drove opportunity for both large-suite and specialized providers to become more agile and drive innovation within their businesses during 2014,” says Chad Eschinger, research vice president at Gartner. “SCM offerings delivered as cloud showed above-market growth of 17 percent, while new on-premises licenses also grew significantly at nine percent, as organizations sought to modernize their supply chain portfolio through a variety of delivery models.”

SAP grew 19.9 percent to hold onto the top spot, and extended its lead within the SCM market, with 25.8 percent market share.

It continues to innovate and introduce new and acquired SCM products to the market, and has been able to upsell solutions 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 percent, from 16 percent in 2013.

In generating revenue of $438 million in 2014, JDA Software sustained its market share ranking of third globally, with 4.4 percent of the global market, and remains the largest pure-play, supply chain-focused vendor despite a decline of 1.7 percent since 2013.

The findings mirrors observations recently made by Software Advice, an Austin, TX-based market research firm. In its recently released Supply Chain Management Software BuyerView, it noted that small businesses (those with annual revenue of $50 million or less) are willing to spend a rather hefty amount—$30,000, on average—for new SCM software.

The report is available on the Software Advice site.

Furthermore, midsize and large businesses (those with with annual revenue above $50 million) are willing to spend an average of $171,000 for new SCM software.

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