According to reports released by Gartner, Inc., SAP procurement applications and Supply Chain Management (SCM) have successfully outpaced the returns of most software markets. In the year 2014, these areas of SAP have attained annual growth figures of 10.8 percent, with an impressive total of $9.9 billion. The procurement and SCM software market have attained solid growth via sustained application demand, with supply chain remaining as an important source of competitive advantage in relation to driving the overall objectives of business growth. The valuable perks of greater business agility, improved customer satisfaction, and operational improvements are making SAP all the more attractive for business houses, across the world.
Chad Eschinger, Vice President (Research) at Gartner says, "Organizations modernizing supply chains drove opportunity for both large-suite and specialized providers to become more agile and drive innovation within their businesses during 2014," he adds, "SCM offerings delivered as cloud showed above-market growth of 17 percent, while new on-premises licenses also grew significantly at nine percent, as organizations sought to modernize their supply chain portfolio through a variety of delivery models."
Over the year gone by, SAP has grown 19.9 percent, and has managed to hold on to its position at the top of the list. Having extended its lead, with a whopping 25.8 percent market share in the SCM market (see Table 1), SAP is continuing to introduce and innovate acquired and new SCM products and software applications into the market. Alongside, it has been successful in up selling solutions across its well-established, totally consolidated and large-sized ERP (Enterprise Resource Planning) installed base.
Oracle has managed to retain its position in the market as the second-largest supplier of supply chain technologies, while leading the supply chain execution (SCE) market, there has been a recession in the momentum of software revenue that was generated through its operations. Moreover, Oracle’s overall market share has declined from 16 percent in the year 2013 to 14.6 percent in 2014.
In the year 2014, JDA Software had generated a revenue of $438 million and successfully sustained its global ranking of 3rd position in market share, with a hold on 4.4 percent of global market, it is still the largest supply chain-focused, pure-play vendor; despite suffering a downslide of 1.7 percent since 2013.
Table 1: Top Five Vendors by Total SCM and Procurement Software Revenue (Millions of Dollars), Worldwide, 2014
Source: Gartner (May 2015)
On the whole, the SCM market is widely fragmented. The top 10 vendors have made a stoic presence in the market with a collective share of 55 percent. Taken together, the 57 vendors that remain, have experienced an annual revenue growth figure of 9.6 percent, thereby indicating the market opportunities created by acquisitions and a strong demand for competitive (often complementary to the offerings of larger-suite providers') specialized offerings.
Eschinger said, "For the most part, building off several years of vendor consolidation, 2014 represented a favorable environment for supply chain technologies," he also mentioned, "The 2012 strategic acquisition and business combination activity of SAP (Systems Applications and Products) and JDA Software demonstrated growth and stability during 2014, as organizations became more comfortable with the vendors' direction and messaging. However, we can expect a new wave of acquisitions to continue to drive market disruption in 2015."