Modern Maturity

Like people of a certain age, warehouse management systems are starting to show signs of wear. Intimations of maturity are apparent in the WMS market’s contraction. According to ARC Advisory Group of Dedham, MA, the global WMS market slid 6% between 2000 and 2001, while the North American portion shrank almost 12%.

On the positive side, WMS software and service revenue totaled a healthy $738 million last year and should hit $1.17 billion by 2006. What’s more, the market will continue to expand, ARC researchers say, reaching a cumulative average growth rate (CAGR) of almost 10% over the next five years. But the catch is that most of that growth will occur outside the United States, although North America still dominates the worldwide WMS market, accounting for about 63% of it.

Looking back, the slowing trend has been evident for some time. Between 1998 and 2001, the CAGR for warehouse management systems in North America was 6%, between two and four times slower than growth rates in Europe, Latin America, and Asia. With long-term growth forecast to be only slightly higher than inflation in North America, WMS suppliers and users must reevaluate their strategies, says ARC analyst Steve Banker. “The most obvious implication is that many companies need to develop global sales, implementation, and support capabilities.” This isn’t as simple as opening an office in Europe or Asia — among other things, it may involve developing regional affiliations overseas. For WMS vendors, ways to cope with the maturing U.S. market include reexamining core architecture, rewriting aging software, pursuing niche strategies, and providing a rich variety of add-on modules.

Partner Content

3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Build the Foundation for Great Customer Experiences - NetSuite
Understand how consistent, timely, relevant and personalized experiences are enabled by having the right technology foundation in place.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.