Supply chain software revenue to reach $10 billion in 2014

Paul Snell is managing editor at Supply Management
29 July 2014

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29 July 2014 | Paul Snell

More than two fifths of supply chain professionals intend to purchase a single underlying technology platform, because of the increasing complexity in getting different systems to work together.

According to research firm Gartner, 43 per cent of professionals are aiming to do this, and by 2018 it is estimated 70 per cent of businesses will have a single platform architecture, with the goal of improving supply chain visibility.

“This trend toward a unifying application platform is growing and will further drive sales of supply chain solutions as more companies adhere to a platform strategy," said Chad Eschinger, research vice president at the company.

Gartner said revenue from supply chain software will reach $10 billion (£5.8 billion) this year, a 12.2 per cent increase compared with 2013. This is the highest rate of growth since 2011. Eschinger added the market for supply chain technology was buoyant.

Just 16 per cent of the market consisted of companies spending on systems for the first time and this is expected to drop to 10 per cent by 2018, with the purchase of additional functionality accounting for most ‘new’ spending.

In addition, most companies will still favour hosted applications, because on-demand systems do not currently offer a similar level of functionality.

"We expect that, through 2018, twice as many organisations will purchase private cloud and hosted offerings each year as those that purchase multi-tenant software-as-a-service offerings,” said Eschinger.

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