European Supply Chain Management Applications Vendor Shares, 2021: Cloud and SaaS Adoption Continue to Gather Pace

European Supply Chain Management Applications Vendor Shares, 2021: Cloud and SaaS Adoption Continue to Gather Pace

The supply chain management (SCM) software market in Europe grew 5% year over year (YoY) in 2021, reaching a total market size of $3.2 billion in constant dollars. While this is lower than pre-pandemic growth rates, it marks a solid return to growth after an essentially flat 2020. While the shockwaves of the COVID-19 pandemic lingered in the market, pressure on companies' budgets eased, triggering the return of projects postponed by COVID-19. Companies also turned to new SCM software as part of wider supply chain restructuring initiatives after a challenging 2020 exposed the frailties of pre-pandemic supply chains and companies' SCM technologies. In many cases, old and poorly maintained supply chain infrastructure and systems hampered companies' efforts to bounce back from their pandemic struggles. As a result, system upgrades rapidly moved up the investment agenda, typically benefitting vendors with modern and streamlined cloud-based offerings the most. SAP maintained a commanding lead in Europe's SCM market, with a 22.7% share in 2021. The company grew 5.4% last year, slightly ahead of the overall market, though still some way off the double-digit growth it enjoyed before COVID-19. Oracle remained steady in second place with 5.1% share of the market in Europe, growing 4.2% in 2021. Meanwhile, Microsoft overtook Blue Yonder to round out the top 3, accounting for 3.8% of the market after growing 19.2%. The fastest-growing top 20 SCM vendor in Europe in 2021 was E2Open, with revenues rising a staggering 102.7% YoY. Kinaxis came in second at 34.5% growth, closely followed by Aptean at 31.6% growth. Meanwhile, Microsoft (19.2%), 1C (17.6%), Manhattan Associates (17.4%), and iTradeNetwork (14.8%) saw growth rates hit the mid to high teens. The fastest-growing vendors in 2021 benefitted from a combination of savvy acquisitions, in-demand software-as-a-service (SaaS) offerings, and in some cases, SCM products and features tailored to specific sectors most in need of a post-pandemic transformation, such as retail and food and beverages. Vendors with individual shares of less than 1% accounted for 37.6% of Europe's SCM market, with revenues totaling $1.2 billion. This demonstrates the extent to which the market remains fragmented, with a vast array of local, regional, and specialized players accounting for more than a third of revenues. The warehousing and inventory management applications functional market grew the fastest in the SCM space in 2021, with revenues rising 6.5% year over year. It also remained the largest functional market, with revenues totaling $1.2 billion. The supply chain planning applications market grew 5.3%, with revenues rising to $987 million, while logistics and transportation management applications grew 2.9% and reached $955 million. On-premises deployment accounted for a larger share than public cloud services (PCS). Revenues for on-premises solutions totaled $2.3 billion, accounting for 74.1% of the market despite a measly 0.7% growth in 2021. In contrast, PCS continued to gain traction and was a key growth driver, with revenues rising 19.6% to account for 25.9% of the market. This IDC Market Share analyzes and sizes the Western Europe and Central and Eastern Europe (CEE) SCM applications market for 2019 to 2021 and provides respective market shares for each vendor. It segments SCM applications market by function market (three functional markets), deployment model (public cloud services and on-premises), and country."Europe's SCM applications market returned to growth in 2021, with revenues rising 5% year on year after a stagnant 2020. With the frailties of pre-pandemic supply chains laid bare and a post-pandemic bounce-back being hampered by aging supply chain systems and infrastructure, companies across Europe ramped up investment in SCM technologies as part of wider supply chain restructuring and modernization initiatives," said Ashok Patel, research manager, IDC European Enterprise Applications.

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