In a frank assessment of one of the supply chain management industry’s leading software markets, ARC Advisory Group this week said warehouse management system vendors were “brutally pummeled” in 2009, and that the storm set the market back five years.
The just-released report, “Warehouse Management Systems Worldwide Outlook Study,” said the WMS market shrank slightly from 2007 to 2008. As the recession sank in its teeth and manufacturers and distributors put their supply chain execution software purchases on hold, WMS vendors staved off a revenue free fall by working off their implementation backlogs. But by 2009, that lifeline had disappeared and, according to ARC’s Steve Banker, “the global recession brutally pummeled the WMS market.”
The downturn was so severe that “the market has lost five years of market growth,” wrote Banker, the principal author of the report. “The global 2005 WMS market was bigger than the market in 2009.”
Vendors were able to cope through layoffs and by milking their maintenance streams, ARC reports. And amid the gloom, SaaS software managed double-digit growth, although the numbers are somewhat skewed by the small baseline against which SaaS growth is judged, ARC said.