17 October 2002 | Robin Parker
E-sourcing will become the most popular e-business technology among purchasers within two years, AMR Research has predicted.
The analyst says revenues from software that enables users to source goods online will account for 48 per cent of the online procurement market by 2006, up from 33 per cent this year.
By 2004, it will have become the most popular software among purchasers, AMR says in its Procurement and Sourcing Applications Report 2001-2006, which examined 900 software suppliers and consultancies.
AMR says the growth will be fuelled by improved integration of software, better security and the increasingly standard use of permanent, rather than short-term, software licences.
The $1.76 billion procurement and sourcing applications market in 2001 fell short of AMR's forecast of $1.97 billion. Licence revenues rose by just 2 per cent.
The report predicted the market will shrink by 5 per cent this year, a far cry from the 162 per cent growth of 2000.
AMR attributed this to the poor performance of some vendors, including i2 and PurchasePro, more cautious purchasing and weakening overall market conditions.
Ariba remains the market leader, despite an 11 per cent decline in revenue, and AMR praised its "nimble" shift to a "very clear spend management strategy" with its recently launched products to help companies control their spend.