Warehouse management systems market begins to rebound

Source: ARC

Jun 02, 2011

The worldwide market for warehouse management systems (WMS) experienced an 8% growth rate in 2010. This growth comes after a substantial market contraction in 2009 and a relatively flat market in prior years. The growth in 2010 was driven by a broad-based rebound in sales across geographic regions and industry verticals.

Capital spending on information technology has rebounded vigorously from the recent global economic downturn, and the WMS market has taken part in this rebound.

The world’s emerging markets are experiencing economic growth at a faster rate than the developed nations and this trend is reflected in sales of WMS solutions. These regions will continue to experience above average growth rates in WMS sales due to the currently low market penetration and high economic growth rates in these regions. Companies in these regions will continue to adopt WMS to obtain operational efficiencies in an effort to retain and improve existing cost advantages.

WMS revenues for add-on functionality such as labor management systems, voice recognition, and warehouse analytics have been growing at faster rates than the WMS market as a whole. ARC expects strong growth rates to continue for the add-ons as a collective group. Customers are adopting these add-ons as they extend their WMS footprint to capture additional efficiencies and increase productivity in their warehouse operations.

ARC expects the small business, or Tier 3 market, to experience prominent growth rates. This market segment has historically exhibited limited levels of WMS adoption. The high price and large upfront expenditures associated with traditional WMS licenses have made these systems cost prohibitive. However, many suppliers now offer economically priced WMS solutions through the software as a service (SaaS) business model. These solutions will provide Tier 3 customers with an affordable alternative to the use of paper pick sheets, driving increased sales of WMS solutions into the small business market.