Supply chain software as a service!
Filed in archive Market Overview on February 14, 2008
You have definitely heard of the existing hype on the "Software as a Service". The current market which started by companies such as Siebel or Workforce.com in CRM area, now constitutes 5% of the market for business software and it is growing around 20% per year. But the question is: Will the scope cover supply chain as well?
Here is my answer based on a brief review of the opinions in the SCM space:
- YES. We will see in the next five years some early versions of supply chain software delivered online. Probably the early versions cover areas such as fulfillment (in applications such as tracking, service delivery, Available to Promise, Profitable to promise and so on) and then solutions in basic forecasting, and inventory planning.
- However, the adoption rate from companies will be lower than software offering growth and this may lead to a mid-term consolidation wave. This outcome is more or less expectable: The software companies want to tap into a new era but it takes time for the companies to trust such solutions. In a recent article in Wall Street Journal I read that tech managers' first priority is company needs and online solutions are too basic to meet those needs. It also takes time for companies to feel comfortable with their data being managed outside company.
- At the end (probably 10 years from now), as software makers go through the experience curve and companies change their mentality, this market reach stability.
What do you think? Do you agree?
Permalink: Supply chain software as a service!
Tags: Supply chain software management paradigm as a service market overview growth future potential suppl
Vote for Supply chain software as a service!:
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Rating: 7.33 out of 3 vote(s) cast.
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Response from:
Randy Littleson
(02/14/08 6:17am)
Response from:
ehsan
(02/14/08 7:55pm)
Hi Randy,
Thanks or your comment. I will be happy if you send me your point of views about SOS market to me.
Best
Ehsan
Thanks or your comment. I will be happy if you send me your point of views about SOS market to me.
Best
Ehsan
Response from:
Arthur
(02/27/08 5:34pm)
One thing about web applications: they are usually much slower than "green screen". A key prerequisite will be to have the necessary bandwidth from server to PC that allows fast uploading and scrolling of screens. We jusst implemented an ERP solution, and none of the "working level" people wanted to use the HTML-similar version, rather all preferred the "green screen" (though most have changed the color) due to speed.
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We sell to large manufacturers across a variety of verticals. We're seeing extremely strong interest in on-demand as companies continue to outsource much of their IT infrastructure.
Very importantly, our on-demand service provides exactly the same full functionality as our prior on-premises offering. It is not a first generation solution with limited capabilities - so we don't encounter that obstacle.
You are correct in that some people are initially concerned about data - but when they stop and think about how much data is already outside their walls because of the pervasive outsourcing they've done, they get much more comfortable with an on-demand service. In fact, a huge value that we provide is the ability to actually regain visibility into that outsourced data because that is critical to enabling effective response to change.
I don't disagree that some vendors will take a different approach to offering an on-demand service and run into issues - but it doesn't have to be that way.
I think the market will be "mature" much sooner than 10 years, I think we're at the early stages of a very strong demand that will become mainstream inside of 5 years.