SAP loses ground in declining supply chain software market

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SAP loses ground in declining supply chain software market

Simon Quicke

The supply chain software market has been hit by the recession with a drop in worldwide revenues for the sector that includes players like Oracle and SAP.

At first glance the figures from Gartner that reveal there was a drop in worldwide revenue by 0.7% to $6.2bn last year might not seem worrying but that included a 7.4% decline in new license sales.

Gartner blamed a difficulty in making fresh software sales last year in the recession as one reason for the decline along with a shift to a subscription model rather than the traditional yearly large dose of license revenue.

SAP remained the largest player but saw its market share drop by 8% with Ariba taking advantage of a similar jump in its slice of the sector. The second largest vendor in the arena Oracle remained stable year-on-year.

Chad Eschinger, research director at Gartner, said that although last year had seen declines the signs from the fourth quarter of 2009 had indicated that things were starting to improve.

"The fourth quarter sustained 6 per cent annual growth, driven by some pent-up demand, but more so from growth in subscriptions and the many maintenance renewals that were due in the fourth quarter," he said.

He added that the supply chain management market will eventually mimic the ERP world with consolidation and fewer fresh entrants but that was some way off and in the meantime the current situation of a fairly fluid sector would continue.

"The economic climate of the past few years and the maturity and saturation of implemented business applications has proven difficult. This stressed environment has forced many vendors to increase maintenance rates and explore various channel, delivery and pricing options," he said. 



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