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Gartner Says Worldwide Supply Chain Management Software Market Grew 7.1 Percent to Reach $8.3 Billion in 2012

Key Issues Facing the SCM Market to Be Discussed at Gartner Supply Chain Executive Conference 2013, May 21-23, in Phoenix; August 12-13, in Melbourne; and September 23-24, in London

Despite economic challenges, the worldwide supply chain management (SCM) software market grew 7.1 percent to $8.3 billion in 2012. During 2012, IT budget decision makers remained highly cautious overall, but supply chain investments kept their priority status and moved forward.

"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. "North America and Western Europe continue to be the prime consumers of SCM software, with nearly 77 percent 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 its No. 1 market share position in SCM in 2012, with an 11.6 percent increase in U.S. dollars (see Table 1). SAP held 20.8 percent of the market and reached $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 percent 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.

Table 1

Top Five SCM Software Vendors by Total Software Revenue, Worldwide 2012 (Millions of Dollars)

Company

2012 Revenue

2012 Market Share (%)

2011 Revenue

2011 Market Share (%)

2011-2012 Growth (%)

SAP

1,721.2

20.8

1,542.8

19.9

11.6

Oracle

1,453.3

17.5

1,296.9

16.7

12.1

JDA Software

426.0

5.1

430.4

5.6

-1.0

Ariba*

319.2

3.8

366.9

4.7

-13.0

Manhattan Associates

160.1

1.9

141.5

1.8

13.2

Others

4,216.0

50.9

3,114.5

51.3

20.4

Total

8,295.8

100.0

6,893.0

100.0

7.1

*Ariba's estimates represent nine months of business operations before its acquisition by SAP.

Note: Gartner's methodology, which converts U.S. dollars from euro-based income statements for software sold during 2012 globally, has reduced 2012 growth for vendors reporting in non-U.S. dollars.

Source: Gartner (May 2013)

In a highly fragmented market, the top five SCM software vendors maintained their status quo over smaller competitors in 2012, accounting for nearly 50 percent 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. 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 above-market growth (13 percent in 2012), while perpetual new licenses experienced slower growth of 3.5 percent, as organizations focused on fast implementation at a lower upfront cost.

Additional information is available in the Gartner report "Market Share Analysis: Supply Chain Management Software, Worldwide, 2012." The report is available on Gartner's website at http://www.gartner.com/resId=2482418.

About Gartner Supply Chain Executive Conference

Analysts are discussing the future direction of the supply chain industry at the Gartner Supply Chain Executive Conference. The U.S. event is taking place now through May 23 at the JW Marriott Desert Ridge Resort and Spa in Phoenix. For more information about the conference, please visit http://www.gartner.com/technology/summits/na/supply-chain/. Media can register to attend by contacting janessa.rivera@gartner.com.

The Gartner Supply Chain Executive Conference 2013 will also be held August 12-13 at the Grand Hyatt Melbourne. For additional information about this conference, please visit http://www.gartner.com/technology/summits/apac/supply-chain/. Media can register to attend by contacting susan.moore@gartner.com.

The Gartner Supply Chain Executive Conference 2013 will also be held September 23-24 at the Lancaster London. For additional information about this conference, please visit http://www.gartner.com/technology/summits/emea/supply-chain/. Media can register to attend by contacting laurence.goasduff@gartner.com.

Additional information from the events will be shared on Twitter at http://twitter.com/Gartner_inc and using #GartnerSCC.

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