Warehouse software market slows

The global WMS (warehouse management software) market shrank by 6% last year with the US market fairing even worse, down a disappointing 12%, according to research by industry analyst firm, ARC. This indicates the US market for WMS has reached maturity and that future world market growth will come mainly from other global regions such as Europe and Asia. But it could be good news for end user companies. A mature US market means that resellers and indirect channel sales become more important. As industry software solutions become more standard and easier to implement, there could be a movement away from the high cost direct sales channel to lower cost indirect channels. And it’s also likely that WMS vendors’ core software products will take a back seat with add-on modules growing considerably faster. The study,‘Warehouse Management Systems Worldwide Outlook’, revealed that total software and services revenue for WMS totalled more than $738m in 2001, and predicted steady growth over the next five years reaching $1.17bn by 2006. Between 1998 and 2001 the CAGR (compound annual growth rate) in the US was about 6%. This was over two times slower than the EMEA region and about four times slower than in the Asia Pacific and Latin American regions. “North America is the region that the great majority of WMS suppliers hail from and where a majority of the sales occur. However, while it still dominates, that presence is waning,” says Steve Banker, author of the study and ARC’s supply chain research director.