Press Release

STAMFORD, Conn., July 18, 2018 View All Press Releases

Gartner Says Worldwide Supply Chain Management Software Revenue Grew 13.9 Percent in 2017

Cloud-First Strategies Underpin the Fastest Growth Areas

The latest market share data from Gartner, Inc. shows that adoption of supply chain management (SCM) software accelerated significantly in 2017. Total worldwide market revenue grew 13.9 percent to reach a total of $12.2 billion in 2017.

"The SCM market’s revenue performed well in 2017, continuing the trend of accelerating growth from recent years. This is happening because SCM technologies are a key component of delivering digital business strategies," said Balaji Abbabatulla, research director at Gartner (see Table 1). "SCM technologies create digital value by optimizing the flow of products, services and related information from source to customer and from customer to source."

"The top five vendors in the SCM market all increased revenue, but only JDA and Infor grew their market share by outperforming the total market growth," said Mr. Abbabatulla. "The 'other vendors' category is growing significantly faster than the top five market incumbents, but the top five rankings remained the same in 2017."

Table 1. Worldwide SCM Revenue Market Share, 2016-2017 (Millions of U.S. Dollars)

Company

2016 Revenue

2017 Revenue

2016-2017 Growth (%)

2017 Market Share (%)

SAP

2,930

3,257

11.2

26.6

Oracle

1,553

1,679

8.1

13.7

JDA

476

544

14.3

4.4

Infor

243

286

17.4

2.3

Manhattan Associates

219

225

2.8

1.8

Other Vendors

5,334

6,256

17.3

51.1

Total

10,755

12,246

13.9

100.0

Source: Gartner (July 2018)

Mr. Abbabatulla continued by saying: "Smaller cloud-native vendors enjoyed an average revenue growth of 41.4 percent in 2017. The top five vendors are defending their market share by pivoting toward cloud-first strategies and quickly introducing new products through development, acquisition or partnerships on their cloud platform."

Cloud offerings are driving growth in the market partly because more midsize organisations are adopting SCM solutions to drive digital business models. Midsize organisations help bolster revenue growth because they are net new customers of SCM products and are not bound by replacement and upgrade cycles from legacy investment.

"Cloud solutions typically have lower barriers to entry and are more easily scalable, and are therefore a better fit for midsize organisations looking at SCM for competitive advantage," said Mr. Abbabatulla. "We expect that vendors offering a well-defined, vertical-industry-oriented strategy for midsize organisations will grow rapidly over the next five years."

Another source of competitive advantage for SCM vendors has been effective incorporation of artificial intelligence (AI) into their products. "While adoption levels of AI vary across sub market segments, we expect it to drive revenue growth as AI technologies and tools mature," said Mr. Abbabatulla. "This is because AI can bring productivity and user experience improvements by automating routine tasks and providing more effective support to complex decisions."

Gartner clients can find more information in "Market Share: Supply Chain Management, Worldwide, 2017."Gartner analysts will provide additional analysis and information on supply chain trends at the Gartner Supply Chain Executive Conference taking place on September 23-25, 2018 in London. Follow news and updates from the events on social media using #GartnerSCC.

About the 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 23-25, 2018 in London. Follow news and updates from the events on social media using #GartnerSCC.

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