Consolidation looms in WMS market

Top WMS suppliers gain more market share in shrinking market By Dave Hannon

Recessions tend to drive market consolidation, as the lean revenues thin out the herd in nearly all markets. And the warehouse management systems (WMS) market is no exception, say market analysts at ARC Advisory Group.

In a recent report, ARC analysts say the top-tier vendors in the WMS market saw strong growth in 2008, as they have in most of the past 10 years ARC has performed the study. However, that trend of the big getting bigger cannot continue for much longer, and soon—maybe as soon as next year—the WMS market will have consolidated to the point where the only way the top five vendors can grow is by taking over one of the other top five.

Overall the WMS market shrank by 1% in 2008 and is forecast to decline again this year in total size before trending back up to grow again in 2010 through 2013. Compound annual growth for the WMS market through 2013 is forecast to be 2.2%, but much of that top-line growth is driven by the largest vendors.

“ARC expects that at least 10 WMS suppliers will go out of business”in 2010, says Steve Banker, ARC analyst. “In a smaller, consolidated market, the major suppliers will find that the WMS market is much more of a zero sum game. One vendor’s growth will come at another’s expense.”
And among the smaller vendors, there is likely to be a snowball effect—as WMS buyers get more concerned about the risk or going with a lesser-known vendor, they will ask those vendors to open up their books. “And many will fail that test,” ARC reports.

ARC Advisory Group ranks Manhattan Associates as leading supplier of warehouse management systems

Manhattan Associates: WMS solution achieved first place ranking in 15 categories.
ARC Advisory Group released its “Warehouse Management Systems Worldwide Outlook, Market Analysis and Forecast Through 2013” today, with global supply chain optimization provider Manhattan Associates, Inc. ranking as the leading supplier of total warehouse management software (WMS) and services.

ARC Advisory Group produces the annual forecast which follows more than 80 suppliers of WMS solutions and gives a detailed analysis and forecast for the marketplace through 2013. The Manhattan Associates’ WMS solution achieved a first place ranking in the following categories:

Total WMS Software and Services
Suppliers of WMS Software
Base WMS Software
WMS Add-on Software Modules
WMS Implementation Services
WMS Maintenance Services
WMS in North America
WMS in the Middle East & Africa
WMS in Asia
WMS to Tier 1 Customers
WMS to Tier 3 Customers
Pharmaceutical & Biotech Manufacturers
Wholesale/Distributors
Apparel Retailers
Department & General Merchandise Retailers

"Manhattan is the largest supplier of WMS solutions in the world. The company emerged as the leading supplier of WMS in Asia this year for the first time," says Steve Banker, service director, supply chain management for ARC Advisory Services. "Manhattan also made huge strides in EMEA this year, moving up from the #6 WMS provider to the #2 provider of WMS in the region. Not only did Manhattan Associates increase their global footprint, but they increased their solution footprint significantly by introducing some compelling WMS add-on modules — Supply Chain Intelligence (SCI) and Workforce Schedule Optimization. In a marketplace where it is sometimes difficult to differentiate solutions, Manhattan has continued to extend the runway with science-based applications built exclusively for distribution centers."

"Manhattan's ranking in ARC's “Warehouse Management Systems Worldwide Outlook” underscores our commitment to developing the type of solutions that give our customers a short term path to success while also delivering long term value," says Eddie Capel, executive vice president, global operations, Manhattan Associates. "Our entire suite of distribution management solutions is designed to give our customers flexibility and the ability to add complementary solutions such as Supply Chain Intelligence, Total Cost-to-Serve or Labor Scheduling as their supply chain network continues to grow and mature."

Foot note: In my Opinion if you need a SCM/WMS with the lot then MANH is the group to talk too...

Warehouse Management Systems - Outlook to 2012

The ARC group has recently published a Five Year Market Analysis and Forecast through 2013. An overview of the report can be found at http://www.arcweb.com/StudyBrochurePDFs/Study_wms.pdf

The outlook is for slow growth off the back of a drop in 2009.
For many suppliers, strategies must be focused on survival rather than growth.

In putting together their strategies, the following kinds of questions need answers.

• How much will the market consolidate?
• How will 2009 compare to 2008?
• When will the market begin to grow again?
• What types of core WMS solutions and add on modules will sell well during the downturn?
• What regions and industries should suppliers focus on?

WMS is often sold as part of a larger supply chain or enterprise suite. How important is that suite? How does the suite offered by leading suppliers need to change so that leading suppliers can maintain and grow their market share?

The full report can be downloaded from this address : http://www.arcweb.com/Research/Studies/Pages/WMS.aspx
There are also similar reports for TMS, planning, Global Trade, SCE etc