Supply chain software sales are expected to increase by almost $6 billion between 2017 and 2021, according to Gartner, which calculates that the market will exceed $13 billion in total software revenue by the end of 2017.
Chad Eschinger, managing vice president at Gartner, said: “Digitalisation is increasing demand for agility and forcing new business models, which is boosting spending in the supply chain management market.”
The 2017 figure is up 11 per cent on 2016 and the market is set to exceed $19 billion by 2021, as software as a service enables new revenue opportunities.
The SCM market forecast is made up of three categories: supply chain planning, supply chain execution, and procurement. Adoption and associated revenue for SaaS are moving through the market at different rates, with procurement leading the move to cloud, and SCP trailing.
By 2021, SaaS deployments are forecast to account for more than 35 per cent of total SCM spending. Sales of on-premises licences will decline to less than 20 per cent of total spending. Hybrid SCM environments with co-existing cloud and on-premises applications are becoming more commonplace, with information hubs and supplier networks dominating the move to cloud.
“To help support next-generation supply chains and real-time business requirements, we expect consolidation of existing solutions into broader, multi-domain suites, but also a continued stream of new point solutions that will support innovation, address specific needs and offer new value,” said Eschinger.