Story image

Supply chain management software market to exceed US$13b by end of the year - Gartner

26 Jun 17

The supply chain management (SCM) market will exceed US$13billion in total software revenue by the end of 2017, up 11% from 2016 according to Gartner research.  

It is on pace to exceed US$19billion by 2021, as software as a service (SaaS) enables new revenue opportunities.

"Between 2017 and 2021, Gartner forecasts nearly US$6billion in total software revenue will be added to the SCM market," says Chad Eschinger, Gartner managing vice president.

"Digitalisation is increasing demand for agility and forcing new business models, which is boosting spending in the SCM market."

SCM providers are already differentiating themselves from competitors and driving revenue growth by incorporating new digital business technologies, such as mobile, machine learning, in-memory technologies, multienterprise visibility and the Internet of Things (IoT), into their offerings.

Eschinger adds that to remain competitive in this environment, end-user organisations are seeking to discover and exploit value in the huge amounts of data generated throughout an ever-extending network of businesses and connections that make up a modern supply chain.

Moreover, the move to SaaS delivery shifts costs from capital expenditure (capex) to operational expenditure (opex), which makes investment in SCM technology more attractive to small and midsize businesses (SMBs) and organisations in emerging markets, therefore expanding the addressable market and increasing overall spending.

The SCM market forecast is made up of three categories: supply chain planning (SCP), supply chain execution (SCE) and procurement.

Adoption and associated revenue for SaaS are moving through the market at different rates, with procurement leading the move to cloud, and SCP trailing behind.

Overall, SaaS revenue growth is driven by a combination of factors: vendors moving to cloud-first or cloud-only deployment models, and end-user organisations becoming more comfortable with issues such as cloud security and appreciating the capabilities and innovation of leading-edge SaaS solutions.

By 2021, SaaS deployments are forecast to account for more than 35% of total SCM spending.

Sales of on-premises licenses will decline to less than 20% of total spending.

Hybrid SCM environments with coexisting cloud and on-premises applications are becoming more commonplace, with information hubs and supplier networks dominating the move to cloud.

"To help support next-generation supply chains and real-time business requirements, we expect consolidation of existing solutions into broader, multidomain suites, but also a continued stream of new point solutions that will support innovation, address specific needs and offer new value," says Eschinger.

"The growing impact of digital commerce will drive greater investment in supply chain analytics, and the lure of faster decision making and eradicating inefficiencies will drive investment in smart machines and IoT and the associated SCM software."

Gartner names LogRhythm leader in SIEM solutions
Security teams increasingly need end-to-end SIEM solutions with native options for host- and network-level monitoring.
NBN Co rolls out 'optimised' wholesale business bundles for ISPs
“We recognise some businesses are on nbn powered plans that have not been optimised for their needs," says Paul Tyler.
JASK prepares for global rollout of their AI-powered ASOC platform
The JASK ASOC platform automates alert investigations, supposedly freeing the SOC analyst to do what machines can’t. 
Cisco dominates record-high Ethernet switch & router markets
While the market is flourishing, it’s tough-going as Cisco has increased its majority share of the pie.
SAP provides partners with free access to their cloud platform
“Now that over 3,700 SAP partners have joined our cloud strategy, the free resources will help them accelerate application development."
Gartner names Proofpoint Leader in enterprise information archiving
The report provides a detailed overview of the enterprise information archiving market and evaluates vendors based on completeness of vision and ability to execute.
WatchGuard appoints new channel distributors in A/NZ
The appointments will enable WatchGuard to expand its regional channel reseller footprint.
Tensions on the rise after Huawei CFO arrest
“Recently our corporate CFO, Meng Wanzhou, was provisionally detained by the Canadian authorities on behalf of the United States of America."