Press Release

STAMFORD, Conn., June 22, 2017 View All Press Releases

Gartner Says Supply Chain Management Market Will Exceed $13 Billion in 2017, Up 11 Percent from 2016

SCM Market to Reach $19 Billion by 2021 as SaaS Deployments Grow

The supply chain management (SCM) market will exceed $13 billion in total software revenue by the end of 2017, up 11 percent from 2016. It is on pace to exceed $19 billion by 2021, as software as a service (SaaS) enables new revenue opportunities.

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

Mr. Eschinger added that to remain competitive in this environment, end-user organizations 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 organizations 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.

Overall, SaaS revenue growth is driven by a combination of factors: vendors moving to cloud-first or cloud-only deployment models, and end-user organizations 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 percent of total SCM spending (see Figure 1). Sales of on-premises licenses will decline to less than 20 percent 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.

Figure 1. SCM Software Forecast by License, Maintenance/Support and SaaS Spend, 2015-2021

Source: Gartner (June 2017)

"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," said Mr. 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 clients can read more in the research note "Forecast Overview: Supply Chain Management, Worldwide, 2016 Update."

To gain valuable external perspective on supply chain, visit SCM World, a cross-industry community of the world's leading supply chain practitioners. Now a fundamental pillar of Gartner's supply chain services, the community orchestrates and curates the most innovative strategies, insight, expertise and knowledge from across the SCM World community.

About Gartner Supply Chain Executive Conference

Gartner analysts will provide additional analysis and information on supply chain trends at the Gartner Supply Chain Executive Conference taking place on September 20-21 in London. You can follow news and updates from the events on Twitter using #GartnerSCC.

About Gartner

Gartner, Inc. (NYSE: IT) is the world's leading research and advisory company. The company helps business leaders across all major functions in every industry and enterprise size with the objective insights they need to make the right decisions. Gartner's comprehensive suite of services delivers strategic advice and proven best practices to help clients succeed in their mission-critical priorities. Gartner is headquartered in Stamford, Connecticut, U.S.A., and has more than 13,000 associates serving clients in 11,000 enterprises in 100 countries. For more information, visit

About Gartner

Gartner, Inc. (NYSE: IT), is the world's leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We're trusted as an objective resource and critical partner by more than 12,000 organizations in more than 100 countries—across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.