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Aging applications and a need for better channel technology will drive the growth in software sales.
A retail community with aging merchandising applications and the need to quickly strengthen merged channel technology will fuel a sharp growth in retail software purchases over the next few years, according to a new report from AMR Research.
Retail software sales last year were $7.3 billion, with a compound annual growth rate of 7 percent through 2011, "catapulting the market to $10.4 billion," the report said.
These kinds of analytic market share and market size studies are nothing if not list-passionate, and this report didn't disappoint. The top dozen application types, by 2006 revenue, were, from No. 1 to No. 12:
POS (point of sale)/checkout, $398 million
corporate financials, $291 million
business intelligence, $231 million
merchandise planning, $166 million
human resources, $155 million
merchandise management, $150 million
customer intelligence/loyalty, $123 million
life cycle pricing, $114 million
demand replenishment, $115 million
sourcing/PLM, $99 million
work force/task management, $86 million
e-commerce platform, $77 million
Resource Library:
Trivia answer: The lowest of the 21 items listed was perishables and fresh item management, $15 million.
The report also listed the software vendors that collectively got all of that money:
SAP ($210 million) and Oracle ($205 million), both with roughly 9 percent of the market
Microsoft, $161 million, 7 percent
NCR, $117 million, 5 percent
Retalix, $77 million, 3 percent
SAS, $67 million, 3 percent
Activant, $56 million, 2 percent
Hyperion, $44 million, 2 percent
DemandTec, $36 million, 2 percent
Cognos, $35 million, 2 percent
JDA, $31 million, 1 percent
Aldata, $29 million, 1 percent
Torex, $27 million, 1 percent
PCMS Group, $26 million, 1 percent
Microstrategy, $25 million, 1 percent
Escalate, $23 million, 1 percent
Soft Solutions, $20 million, 1 percent
Kronos, $19 million, 1 percent
NSB Retail, $18 million, 1 percent
Manhattan Associates, $17 million, 1 percent
Business Objects, $15 million, 1 percent
Epicor/CRS, $15 million, 1 percent
Micros, $14 million, 1 percent
Taleo, $12 million, less than 0.5 percent
PTC, $10 million, less than 0.5 percent
"Many retailers have outgrown existing merchandise planning and management systems as they can no longer be extended enough to support new channels, banners, geographies, or processes," the report said.
"The good news for application and service providers is that retailers are shifting from a build-it-ourselves approach to commercial software, thus fueling growth in the retail market. Still, many vendors lack the out-of-the-box functionality that retailers require, which has led to retailers delaying selections or partnering for codevelopment," AMR reported. "As software matures over the next five years and vendors deliver referenceable accounts and improve integration among modules, we see the buying floodgates opening up further."
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