COPENHAGEN, June 25, 2002 - In spite of restrained spending due to the economic downturn as well as other factors, the growth of the Western European product supply chain automation (SCA) applications market remains very positive, and is considerably faster than the overall applications market. IDC forecasts a 2001-2006 CAGR of 34%, from $2.7 billion to $11.6 billion.
According to Anne-Lise Wang, Research Vice President with IDC's European Software Group, "The caution displayed by users in the uncertainty of the economy has slowed down the market. Automating the supply chain is a strategic decision that will have profound implications to the future of the company, but the immeadite return of investment can be difficult to measure. Projects like these move slower in times when economy is strained."
While the uncertainty of the economy has slowed down the market, developments in the supply chains towards not only increased efficiency but also their more strategic use are pressing more users to become part of automated value chains. "Market players are presented with an urgent need to consider their position and act quickly, now that they are standing on the threshold of greater user adoption for product supply chain automation software," continued Wang.
Vendor responses in Western Europe indicate that no dramatic growth will take place among large organizations. Therefore, the vendor community is turning to the mid-market segment for further growth. Mid-sized companies in Europe are slowly making the transition from thinking internally, within the boundaries of their own organization, to opening up to the broader value chain where the flow of transactions and information between trading partners will need to be automated. Initially, the urgency for smaller companies to consider automating their supply chain is more related to their role as a supplier than as a buyer.
As vendors are turning to mid-market for more growth, they must first, however, learn to deal with this market, as it is very different from the large company market in terms of requirements. In terms of basic needs, large- and mid-sized companies may not differ vastly. The main differences lie in the fact that smaller companies do not have either the IT nor the financial resources that large companies have. In addition to this, smaller companies tend to have a more risk averse attitude to new investments and change.
Product Supply Chain Automation Applications: Market Forecast for a Changed Market (IDC #LS25J) provides a preliminary update for the overall European opportunity for the years 2001-2006 and reviews developments in the SCA area. It contains a discussion of the major changes expected in the enterprise application market, how the SCA software vendor community will be impacted, and a discussion on the issues SCA software vendors must relate to in terms of their survival and success. To purchase this document, call your local IDC office or visit us at www.idc.com.
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For more information, contact:
Lotta Hållén-Kragh
+45 39 16 22 42
lhallen@idc.com
Anne-Lise Wang
+45 39 16 22 22
awang@idc.com