WMS market shows strong growth in 2011, says ARC
The Warehouse Management System (WMS) market saw significant growth in 2011, increasing by 10%, according to data from Dedham, Mass.-based ARC Advisory Services.
Reasons for the growth in the WMS market were widespread, according to ARC officials.
In its report, entitled “Warehouse Management Systems Worldwide Outlook,” ARC noted that WMS revenues for add-on functionality like labor management systems and warehouse analytics have been growing at impressive rates. They explained that many WMS suppliers are offering a wide-range of available WMS add-ons and other suppliers are developing add-on functionality to extend their current WMS offerings. What’s more, with more suppliers offering add-on services will provide new opportunities for cross-selling into their respective installed base and also offer customers the option to purchase add-ons from their incumbent WMS suppliers.
The firm said it is forecasting “above average growth rates” for the add-ons as more suppliers extend product lines to include additional add-on options.
“We estimate the 2011 WMS market at nearly $1.3 billion,” said ARC Enterprise Software Analyst and principal author of the report Clint Reiser in an interview. “Suppliers noted high levels of growth in both the Latin America and Asia markets. For sales of add-on functionality, analytics, labor management, and optimization functionality remains robust. For end user industries, discrete manufacturing experienced strong growth last year, but I believe this is in large part due to a delayed rebound from the recent global recession.”
ARC said emerging markets are growing faster than developed ones and is reflected in WMS sales. And ARC said they will continue to experience higher growth rates due to current low market penetration and high economic growth in those regions.
Going forward, Reiser said ARC expects strong growth in food and beverage due to traceability requirements and retail due to adaptation to ecommerce fulfillment requirement.
“I don’t expect growth to remain as strong as we experienced last year, because I believe that growth was enhanced by the post-recession rebound,” said Reiser.
The report added that e-commerce expansion and multichannel retail are increasing demand for WMS services and technology, which support piece pick, pack, labeling, and other process changes driven by the high labor requirements of e-commerce fulfillment.
And these e-commerce increases, said ARC, offer additional opportunities for WMS suppliers to assist retailers and direct-to-consumer manufacturers with distribution efficiencies.