Despite economic challenges, the worldwide supply chain management (SCM) software market grew by 7,1% to $8,3-billion in 2012. During 2012, IT budget decision-makers remained highly cautious overall, but supply chain investments kept their priority status and moved forward. 
“While IT budget scrutiny and global economic conditions are moving cost reduction back to a main business driver, supply chain remains a key source of competitive advantage in driving business growth objectives,” says Chad Eschinger, research vice-president at Gartner.
“North America and Western Europe continue to be the prime consumers of SCM software, with nearly 77% of market revenue.
“However, Western European growth slowed and Asia/Pacific continued to experience robust growth, reflecting a shift toward investment in technology in emerging-market manufacturing centres.”
SAP retained its number one market share position in SCM in 2012, with an 11,6% increase in US dollars. SAP held 20,8% of the market and reached $1,7-billion in software revenue. SAP has been the market share leader within the aggregated supply chain market for more than a decade.
Second-place Oracle had another good year in its supply chain business, growing 12,1% and reaching $1,5-billion in revenue during 2012. JDA Software retained the third spot in 2012, exhibiting strong new sales and increased average sales price through most of the year.
In a highly fragmented market, the top five SCM software vendors maintained their status quo over smaller competitors in 2012, accounting for nearly 50% of revenue.
This consistency in share occurred, despite the market consolidations that happened in 2012 – the most significant of which was SAP acquiring Ariba in October. The other major acquisition took place in December 2012 between RedPrairie and JDA Software, creating the largest supply-chain-focussed vendor and further consolidating the top of the market.
Software as a service (SaaS) SCM offerings showed above-market growth (13% in 2012), while perpetual new licenses experienced slower growth of 3,5%, as organisations focussed on fast implementation at a lower upfront cost.