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SPECI AL SUPPLEMENT

September, 2003
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T
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he supply chain management
(SCM) software market experienced
its first revenue decline ever last year
according to Boston-based AMR
Research. One reason for the 6 per-
cent drop in sales was clearly the
slumping economy that severely
impacted the supply-chain intensive
manufacturing sector. AMR Vice
President of Research Larry Lapide
also attributes much of the sales
decline to buyers desperately seeking
immediate returns from their technol-
ogy investments, through lower cost
and easier to implement solutions.
Cautious users shied away from
big, expensive planning purchases in
favor of incremental improvements
from smaller execution applications,
says Lapide.
AMR divides the SCM market into
two broad types of applications: (1)
supply chain planning (SCP), which
includes demand planning, forecast-
ing, production scheduling and other
long-term planning; and (2) supply
chain execution (SCE), which
includes applications for management
of transportation (TMS), warehousing
(WMS), inventory management and
order management.
Planning users have become
somewhat disillusioned with the SCP
visionary approach to supply chain
problems, says Lapide. While these
users are receiving benefits, they are
not as great as expected. Plus the
solutions are taking much longer than
the promised six-to-nine month imple-
mentation horizon.
According to Lapide, more than
half of all SCP implementations have
taken more than one year to yield any
benefit. As a result, these applications
have lost their momentum in the mar-
ketplace. A 17 percent sales drop in
SPECI AL SUPPLEMENT
The supply chain management
software market suffered
a slight dip in 2002, reports
AMR Research, while buyers
scrambled to find quick returns
from lower cost, faster to
implement solutions.
By Thomas A. Foster,
contributing editor
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2002 has cut the Supply Chain
Planning portion of the SCM mar-
ket to only 36 percent.
SCE has now become the larg-
er portion of the market compris-
ing 64 percent of total sales. SCE
application sales in 2002 actually
eked out a one percent sales
increase. The relative success of
SCE is due to the simple fact that
these applications produce definite
and measurable savings within six
to nine months, says Lapide.
They also are usually lower cost
applications, at least to license.
Not all types of execution soft-
ware showed positive growth, how-
ever. Inventory management appli-
cations grew by 2 percent in 2002
while WMS sales were relatively
flat. TMS sales actually declined 18
percent. Looking five years out,
however, Lapide is optimistic about
specific SCE applications, which he
projects will grow at double-digit,
compound annual growth rates
(CAGR). The fastest growing SCE
applications will be order manage-
ment (11 percent), inventory man-
agement (11 percent), and TMS
(12 percent).
Enter the ERP Vendors
The biggest shift in the SCM
space has been the growth in mar-
ket share for the major enterprise
resource planning (ERP) vendors.
Market leadership changed hands
in 2002 as SAP overtook i2
Technologies in SCM revenue with
a sales growth of 10 percent.
When the SCP market over-
heated in the late 1990s, all of the
ERP vendors jumped in, says
Lapide. While this sector has
slowed, the ERP vendors continue
to gain momentum within their
installed bases.
The analyst says that users
integration concerns about best-of-
breed applications have helped the
ERP vendors sell themselves as an
easier-to-implement choice for
SCM applications, especially plan-
ning solutions.
The SCM market has tradition-
ally been a highly fragmented one,
especially in the SCE space, where
the top 10 vendors represent only
34 percent of total SCE revenue.
SAP stands out as the execution
leader, but mainly because of its
huge installed based of ERP users,
who often find the easy-to-add
WMS module adequate for their
needs. Overall, however, the ERP
vendors have yet to gain as much
ground in the SCE segment.
The WMS and TMS applica-
tions from the ERP players lack
much of the functionality of the
best-of- breed vendors, says
Lapide, adding that the ERP com-
panies are likely to put more
emphasis on these applications in
the future.
In 2002, however, best-of-breed
SCE vendors enjoyed double-digit
sales growth, while most of the
market remained flat. Lapide says
that the top best-of-breed compa-
nies are likely to grow their market
share because of their leadership
in the so-called wireless supply
chain. This technology involves
tracking goods as they move along
a supply chain using radio frequen-
cy identification (RFID), global
positioning system (GPS), wireless
fidelity (WiFi), and bar-coding
technologies.
An Established Market
Despite the disappointing
results in 2002, Lapide says SCM
has established itself as a $5 billion
market that will get back on the
growth curve in 2003. AMR proj-
ects a CAGR of 8 percent over the
next five years. SCP revenue will
continue to be the smaller share of
this market and will only grow at 5
percent over the next five years. It
will be overshadowed by SCE rev-
enue, which will grow significantly
faster at 10 percent.
Companies are no longer buy-
ing suites of SCP applications, but
rather single applications to
address specific supply chain prob-
lems, says Lapide. Users will be
most interested in using SCM
applications to improve operational
efficiencies in customer fulfillment
activities and to reduce inventory
and supply chain costs.
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SPECI AL SUPPLEMENT
The relative success of SCE is due to the simple fact
that these applications produce definite and measurable
savings within six to nine months,
Larry Lapide
AMR, Vice President of Research
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2002 Revenue Rank/
Company Name
SCM vendors ranked by 2002
SCM revenue (incl. est. 03 growth)
1 SAP 511 516 9% 10% 1%
2 i2 Technologies 434 399 7% -49% -8%
3 Manugistics 226 228 4% -10% 1%
4 Manhattan Associates* 176 197 4% 13% 12%
5 IBS 161 164 3% -2% 2%
6 J.D. Edwards 140 145 3% 15% 4%
7 Swisslog 114 119 2% 30% 5%
8 Aspen Technology 98 99 2% 8% 1%
9 Retek 77 81 1% 7% 5%
10 RedPrairie 75 81 1% 23% 8%
11 Vastera 74 86 2% 21% 15%
12 EXE Technologies 73 74 1% -24% 3%
13 PeopleSoft 69 80 1% -5% 16%
14 Descartes 56 58 1% -13% 3%
15 Vertex Interactive 47 45 1% -9% -4%
16 Pitney Bowes Supply Chain Solutions 44 49 1% 7% 12%
17 Microsoft Great Plains Business Solutions 39 41 1% 8% 5%
18 TXT e-solutions 36 37 1% 74% 5%
19 Integrated Warehousing Solutions 35 37 1% 6% 5%
20 ILOG 34 36 1% -27% 5%
21 Industri-Matematik International (IMI) 34 30 1% -10% -13%
22 Irista 34 34 1% 6% 0%
23 NxTrend Technology 32 35 1% 14% 8%
24 Oracle 32 50 1% 12% 55%
25 Catalyst International 32 32 1% -3% 1%
26 JDA 32 33 1% -5% 5%
27 G-Log 32 35 1% 125% 12%
28 BRAIN 31 31 1% 9% 0%
29 Optum 31 31 1% -11% 0%
30 NextLinx 31 31 1% 41% 0%
31 LIS 31 33 1% 3% 8%
32 Adexa 30 29 1% -27% -5%
33 Xelus 30 30 1% 5% 0%
34 QAD 29 30 1% -5% 1%
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continued on page s10
*Does not include Logistics.com.
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SPECI AL SUPPLEMENT
2002 Revenue Rank/
Company Name
SCM vendors ranked by 2002
SCM revenue (incl. est. 03 growth)
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35 Demand Management 28 28 1% 1% 0%
36 Provia Software 28 30 1% 8% 8%
37 HighJump Software 28 36 1% 22% 30%
38 Logility 28 31 1% -7% 10%
39 Vcommerce 28 30 1% 452% 10%
40 Software Solutions Unlimited 25 25 <.5% 9% 0%
41 Yantra 25 28 <.5% 25% 10%
42 IFS 25 26 <.5% 2% 5%
43 Mincom 24 24 <.5% 1% 0%
44 Intentia International 24 24 <.5% 10% 2%
45 SoftBrands Manufacturing 22 22 <.5% 0% 0%
46 MARC 22 24 <.5% 23% 8%
47 SupplySolution 22 22 <.5% 83% 0%
48 Tecsys 22 22 <.5% 4% 0%
49 Fulfillment Chain 22 22 <.5% 13% 0%
50 Exact Software 21 22 <.5% 4% 5%
51 Acsis 20 23 <.5% 22% 15%
52 SynQuest 20 0 0% 38% 0%
53 ecVision 19 19 <.5% 300% 0%
54 infor:swan business solutions 18 18 <.5% 1% 3%
55 ClearOrbit 18 19 <.5% 11% 8%
56 WorldChain 18 20 <.5% 100% 15%
57 Prophet 21 17 19 <.5% 7% 8%
58 Finmatica 17 19 <.5% 18% 10%
59 Schneider Logisitcs 17 19 <.5% 13% 12%
60 V3 Systems 16 18 <.5% 100% 10%
61 PipeChain 16 18 <.5% 33% 13%
62 daly.commerce 16 16 <.5% 3% 2%
63 Baan 15 16 <.5% -28% 5%
64 TMW Systems 14 17 <.5% 14% 19%
65 MA-system 14 14 <.5% 17% 0%
66 SofTechnics 14 15 <.5% 27% 5%
67 BridgePoint 14 15 <.5% 150% 12%
68 Transentric 13 14 <.5% 0% 9%
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SPECI AL SUPPLEMENT
SCM vendors ranked by 2002
SCM revenue (incl. est. 03 growth)
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69 RiverOne 13 14 <.5% 100% 10%
70 Geac 13 13 <.5% -16% 2%
71 Vizional Technologies 12 12 <.5% 100% 0%
72 Logistics.com 12 15 <.5% 50% 25%
73 Webplan 11 11 <.5% 0% 0%
74 AquiTec International 11 11 <.5% 30% 0%
75 Verticalnet 11 6 <.5% 22% -50%
76 Gemmar Systems International (GSI) 11 11 <.5% 10% 0%
77 Evant (formerly NONSTOP Solutions) 11 12 <.5% 50% 10%
78 Genco Distribution System 10 12 <.5% 11% 20%
79 Precision Software 10 11 <.5% 10% 15%
80 Greycon 10 10 <.5% 10% 1%
81 Syngistix 10 10 <.5% 20% 5%
82 Ross Systems 9 11 <.5% -26% 20%
83 Cambar Software 9 9 <.5% 0% 0%
84 GT Nexus 9 10 <.5% 0% 10%
85 Nistevo 9 10 <.5% 29% 11%
86 Rely Software 9 10 <.5% 200% 8%
87 Arzoon 9 10 <.5% 60% 12%
88 Profile Systems 8 8 <.5% 8% 0%
89 Syncra Systems 8 8 <.5% 100% 5%
90 Elogex 8 8 <.5% 200% 12%
91 GAINSystems 8 10 <.5% 27% 32%
92 Demantra 7 7 <.5% 53% 0%
93 Interlink Technologies 7 8 <.5% 5% 5%
94 Propack Data 7 7 <.5% 48% 0%
95 Cayenta 7 7 <.5% 12% 0%
96 Prescient Systems 6 7 <.5% 80% 15%
97 Viewlocity** 6 23 <.5% 68% 273%
98 Radcliffe Systems 6 6 <.5% 20% 0%
99 Zethcon 6 7 <.5% 20% 17%
100 Vigilance 6 6 <.5% 60% 0%
2002 Revenue Rank/
Company Name
**Includes SynQuest and Tilion in 2003 revenue Source: AMR Research, 2003
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