Supply Chain Management Global Software Market Grew 13.9% in 2017

SAP is Leading The Fast-Growing SCM Market With 26% Share

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%  to reach a total of $12.2 billion in 2017.  The North American SCM market achieved 11.4% growth in 2017.

According to Balaji Abbabatulla, research director at Gartner, “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. 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.”

Gartner reports that smaller cloud-native vendors enjoyed an average revenue growth of 41.4% in 2017 and finds 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. There have been 247 strategic M&A transactions in the SCM technology market since 2013 as reported by 451 Research.

M&A Acquisitions in the SCM Market 2013 – 2018 YTD

247 Transactions | 3.24 Median Revenue Multiple | $11.2B Total Deal Amount

Source: 451 Research

Another source of competitive advantage for SCM vendors has been effective incorporation of artificial intelligence (AI) into their products. Adoption levels of AI vary across sub market segments but are expected to drive revenue growth as AI technologies and tools mature.  AI can bring productivity and user experience improvements by automating routine tasks and providing more effective support to complex decisions.

Quick Hits:

  • Supply chain planning accounted for the highest share of revenues, 36.4%, and grew at 12.7% in 2017.
  • SAP is dominating the worldwide Supply Chain Management (SCM) market today according to Gartner’s latest market share estimates.
  • Supply chain execution accounted for 31.6% of the market and grew 12.8% in 2017.
  • Procurement accounted for 31.9% of the market and grew 16.1% in 2017, becoming the fastest growing sector of SCM.
  • The two largest regions, North America and Western Europe, accounted for 78.3% of the SCM market and grew at 11.4% and 18.1% respectively.
  • Organizations are adopting Cloud-based Supply Chain Management (SCM) solutions to enable new digitally-based business models at a faster pace than ever before, enabling them to be more responsive to market demands.
  • SAP is capitalizing well on the market dynamics driving SCM’s double-digit market growth. With 26.6% market share, almost double their nearest competitor Oracle at 13.7%, SAP’s momentum in this market is attributable to their success enabling digital supply chains.

Source: Gartner

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