Cloud SCM Market Overview
The cloud SCM market was valued at $3.3 billion in 2016 and is predicted to advance at a CAGR of 19.2% during the forecast period (2017–2023). Throughout the historical period (2013–2016), North America led the market and is projected to continue leading it during the forecast period. Moreover, the constantly growing support of the government to various small & medium business organizations in Asia-Pacific (APAC) is expected to this region the fastest growing in the market.
In 2016, demand planning and forecasting had been the largest revenue generating solution in the cloud SCM market and expected to show rapid growth during the forecast period.The major factors responsible for such rapid growth includes, increasing needs of business enterprises to predict the requirement of customer and industry.
GLOBAL CLOUD SCM MARKET, BY SOLUTION, $M (2013 – 2023)
Based on solution, the cloud SCM market is categorized into demand planning & forecasting, inventory & warehouse management, product life-cycle management, logistics management, sales & operations planning, order management, transportation management, procurement & sourcing, and product master data management. Among these, the market for demand planning & forecasting solutions are projected to witness the highest CAGR during the forecast period. In this era of technology, almost every organization is dependent on the internet, which is a key factor for the expanding market for cloud SCM demand planning and forecasting solutions. The increasing number of internet-dependent organizations is accelerating the need for cloud SCM demand planning and forecasting solutions, as these aid organizations in relating and assimilating their processes across networks. These allows for a closer collaboration among the employees of a business and actively respond to the changing market trends and customer requirements. Further, demand planning & forecasting is an effective solution to provide satisfactory experience across the value chain.
On the basis of service, the cloud SCM market is divided into training & consulting, managed services, and support & maintenance. Among these, the support & maintenance division held the largest share in 2016 in terms of revenue. The demand for training and consulting services is increasing rapidly due to the necessity of low investment and rise in the demand for expertise to improve supply chain.
On the basis of deployment, the market is segmented into hybrid cloud, public cloud and private cloud. It is observed that hybrid cloud was the most preferred deployment type amongst organizations, holding more than 50.0% share of the cloud SCM market in 2016, whereas the private and public cloud contributed less than half of the market revenue. Among the large, and small and medium enterprises (SMEs) under the user type segment, the revenue contribution of large organizations was more.
On the basis of industry, market is segmented into energy & power, retail & wholesale, food & beverages, transportation & logistics, manufacturing, healthcare & life sciences, hospitality government and others. Amongst them energy and power was the largest revenue generator for the market during the historical period.
Cloud SCM Market Dynamics
There are multiple factors responsible for driving the global cloud SCM market, such as the cost-effectiveness of the technology, increasing awareness about it among end-users, and the growing need for demand management solutions.
Demand management is a fast-growing dynamic solution, which simplifies the business processes. The requirement for demand management software is rising swiftly across varied businesses to reduce the complexity of the processes. Currently, organizations keep themselves equipped with the required advanced tools, technologies, and forecasting methodologies, which reduce the complexity of data and enable them to view it and make various predictions.
The global market for demand planning and forecasting is expected to accelerate at a rapid pace, thereby driving the overall cloud SCM market growth during the forecast period. Demand management software helps organizations in creating statistics-based predictions from the data, causal factors, and events, thereby meeting the requirement of the customers. It also allows the forecasting of information on the basis of various dependent and independent demand data available for multiple products or channels.
The cost-effectiveness of the technology is another key driver for the growth of the cloud SCM market. The on-premises supply chain management solutions are comparatively costlier including multiple related expenses, such as regular IT infrastructure maintenance. On the other hand, cloud SCM provides cost advantages, as minimum IT set up is required for it. Furthermore, it provides the ‘pay-per-use’ facility along with the flexibility to scale up or down the usage of such solutions, which is making businesses more inclined toward these.
To meet the changing requirements of the business environment, enterprises are migrating from traditional methodologies to advanced IT solutions, including cloud. The overall ownership cost of cloud SCM, which includes the expenses incurred by its implementation and IT infrastructure is quite low in comparison to traditional technologies. The players operating in the cloud SCM market also keep upgrading the technology according to the demands of customers, which enables them to bring a reduction in their costs. For instance, in the recent years, Oracle SCM Cloud has gained a considerable customer base due to its enhanced features and cost-effectiveness.
The growing e-commerce sector, unexplored market around the globe, and rapid adoption of cloud technology by various SMEs are the key opportunities for the cloud SCM market players. Nowadays, people are more inclined toward e-commerce due to the growth in internet penetration. Also, the rising average spending per e-shopper is driving the e-commerce sector progress around the globe, thereby helping raise the adoption of cloud SCM. Supply chain, logistics, product management, and demand forecasting are the main elements of e-commerce which require cloud-based SCM for real-time tracking.
The growth of e-commerce is predicted to be the major growth opportunity for the cloud SCM market, as e-commerce companies leverage these solutions to gain and retain their customers through the effective delivery of products in a short time. Also, to hold a good position in the market, cloud SCM vendors are coming up with new solutions and practices to reduce the supply chain complexities. The number of SMEs is rapidly growing, which would lead to the growth of the market for cloud SCM in the forecast period.
Competitive Landscape of Cloud SCM Industry
The competition among the cloud SCM market players is highly intense due to the fragmented market structure. This scenario is due to the presence of a large number of established players including software integrators, and developers.
The rapid growth of the cloud SCM market further raises the intensity of competition. Due to the surging demand for such solutions across industry verticals, numerous new players are entering this market. Some of the key players in the market are SAP SE, Infor Inc., Oracle Corporation, The Descartes Systems Group Inc., JDA Software Group Inc., Manhattan Associates Inc., Logility Inc., Kinaxis Inc., and IBM Corporation.
Key question answered in this report
What is the current scenario of the global cloud SCM market?
What are the emerging technologies for the development of the global cloud SCM market?
What is the historical and present size of the market segments and their comparative future potential?
What are the major catalysts for the global cloud SCM market and their impact during the short, medium, and long terms?
What are the evolving opportunities for the players in the global cloud SCM market?
What are the key regions from the investment perspective?
What are the key strategies adopted by the major players to expand their market share?