Supply chain software market set for consolidation

Top two are clear leaders but half the market made up of "others"

SAP is leading the $6bn (£3bn) per year supply chain management (SCM) software market which is growing at 17 per cent per annum, according to analyst Gartner.

Oracle, JDA, Ariba and Manhattan Associates fill out the top five. However, half the market is made up of " others" and SAP and Oracle account for 38 per cent of the total market. The gap between the top slot and number five is 20 per cent, with Manhattan Associates accounting for just two per cent of the market with $152m (£78m) in revenues.

"During the past 18 months, we have witnessed businesses rediscovering the criticality of supply chain technologies to drive greater customer and supplier satisfaction through better visibility and planning.

"Given the market's fragmentation of vendors and solutions, and the continued expansion of suite vendors' capabilities within supply chain technologies, we expect consolidation of vendors and share to mimic what has occurred in the enterprise resource planning (ERP) market," said Chad Eschinger, research director at Gartner.

"However, unlike the ERP market, we expect a longer timeline with more activity and new entrants, given the breadth of needs across supply chains and functional domains.

"Consolidation continued among business application and SCM vendors with 25 significant acquisitions in 2007, and more than 85 since 2005."