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STAMFORD, Conn., May 12, 2014

Gartner Says Worldwide Supply Chain Management and Procurement Software Market Grew 7.3 Percent in 2013

With supply chain continuing to be a key source of competitive advantage in driving business growth objectives, the worldwide supply chain management (SCM) and procurement software market grew 7.3 percent to $8.9 billion in 2013. The market performed well as supply chain investments kept their priority status and moved forward, even as IT budget decision makers remained cautious.

"Both influences have impacted strategic planning processes and have resulted in stronger price-based competition and smaller contracts. Cloud and subscription-based pricing is shifting revenue streams and influencing growth," said Chad Eschinger, research vice president at Gartner. "The impact of cloud on traditional on-premises license sales outside of the procurement market, which is heavily influenced by software as a service (SaaS), is minimal today. Hence, while growth rates are high, the starting point is much lower and many of the deals are for specific functionality, rather than full suite deployments."

SAP retained its No. 1 market share position in SCM in 2013, with a 24 percent increase (see Table 1). SAP held 23.9 percent of the market and reached $2.14 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's growth in its supply chain business during 2013 was relatively flat from 2012. It retained its position as the second-largest provider of supply chain technologies, growing 0.1 percent and reaching $1.46 billion in revenue during 2013. JDA Software retained the third spot in 2013, which was a year of transition as it worked through product rationalization and integration of several years of acquisitions and the 2013 merger with RedPrairie.

Table 1

Top Five SCM and Procurement Software Vendors by Total Software Revenue, Worldwide 2013 (Millions of Dollars)

Company

2013 Revenue

2013 Market Share (%)

2012 Revenue

2012 Market Share (%)

2012-2012 Growth (%)

SAP

2,138.0

23.9

1,721.2

20.7

24.0

Oracle

1,455.0

16.3

1,453.3

17.4

0.1

JDA Software

455.3

5.0

426.0

5.1

5.0

Manhattan Associates

167.5

1.9

160.1

1.9

5.0

Epicor

159.4

1.8

138.2

1.7

15.0

Others

4,568.6

51.1

4,432.9

53.2

3.0

Total

8,943.8

100.0

8,331.7

100.0

7.3

Note: Ariba held the fourth market share position in 2012 and is now part of Gartner's estimates for SAP.

RedPrairie held the ninth market share position in 2012 and is now part of Gartner's estimates for JDA Software.

Source: Gartner (May 2014)

In the highly fragmented market, the top 10 vendors experienced a slight shift due to acquisitions, but maintained, in essence, the status quo over smaller competitors in 2013, and accounted for 55.3 percent of the market. Collectively, the remaining 58 vendors experienced annual revenue growth of 18.3 percent, not only indicating opportunity in the market created by acquisitions, but also indicating strong demand for specialized offerings that are competitive, and often complementary, to the larger-suite providers' offerings.

"While acquisition activity has further consolidated the top 10 market share, it has also opened opportunities for smaller, best of class (BOC) vendors," said Mr. Eschinger. "These opportunities stem from users looking for alternative solutions to the larger vendors, as well as fear, uncertainty and doubt associated with the initial phases of a merger and acquisition (M&A). Typically, there is a 12- to 18-month window of enhanced opportunity for competitors. This is evident in the 2013 results, with BOC providers, collectively, more than doubling the growth of the overall market."

Additional information is available in the Gartner report "Market Share Analysis: Supply Chain Management and Procurement Software, Worldwide, 2013." The report is available on Gartner's website at http://www.gartner.com/doc/2729617.

Additional details on the future direction of the supply chain industry will be discussed at the Gartner Supply Chain Executive Conference 2014 taking place May 20-22 in Phoenix, Arizona. 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 2014 will also be held September 10-11 in 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.

About Gartner

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