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The worldwide supply chain management (SCM) software market totalled $7,7-billion in 2011, a 12,3% increase from 2010, according to Gartner.

It was the second year of double-digit growth for the SCM software market as supply chain investments kept their priority status and moved forward, despite caution from IT budget decision makers.

“Despite ongoing economic uncertainty, the market for supply chain applications showed itself to be pretty resilient in 2011 with most SCM providers continuing to expand their footprints,” says Chad Eschinger, research vice-president at Gartner. “North America and Western Europe continued to be the prime consumers of SCM software in terms of dollars spent, with nearly 79% of market revenue. However, European growth slowed in 2011 while Asia/Pacific continued to experience robust growth that significantly outpaced the market average.”

SAP continued to lead the SCM software market, accounting for 19,9% of the worldwide market. Oracle was the number two vendor with 16,9% market share. Ariba experienced the strongest growth among the top five vendors with SCM software revenue increasing 46,5% in 2011.

“The SCM software market is fragmented, with a plethora of small and midsize vendors (with revenue of less than $50-million) across regions and its four primary market segments,” says Eschinger. “Nevertheless, the top five vendors — SAP, Oracle, JDA Software, Ariba and Manhattan Associates — collectively held 48,3% of the worldwide SCM software market based on 2011 total software revenue.”

Eschinger says that SCM offerings delivered as software as a service (SaaS) subscriptions continued to bolster above-market growth in 2011 at 21% for both long-standing incumbents and many best-of-breed point product vendors, with focused capabilities for specific niche markets, while perpetual licenses also grew significantly at 15%.