Market Has Only a Minor Contraction Despite Recession
A Warehouse Management System’s (WMS) primary mission is the management of a warehouse’s resources, including space, labor, equipment, tasks, and material flows. ARC does not include suppliers who offer paper-based Warehouse modules. ARC defines a WMS as a real-time solution that utilizes Radio Frequency, Voice Recognition, or RFID.
Despite the worst global recession since the 1930s, the WMS market only had a minor contraction in 2008. However, it was clearly a tale of two markets. The largest suppliers all grew, some substantially. Meanwhile many small and midsized vendors told a similar tale of woe. The year started out well, selling cycles began to lengthen in the third quarter, and many suppliers were not able to close any new software deals in the fourth quarter. Backlogs in implementation work kept many from experiencing a major downturn. But many of these suppliers are finding that their backlog is disappearing even as no new software sales are emerging.
If not for the strong year the largest suppliers had, who have come to make up a substantial portion of the WMS market, the market would have shrunk in a far more significant manner.
Strategic Issues
For many suppliers, strategies must be focused on survival rather than growth. In putting together their strategies, the following kinds of questions need answers.
- How much will the market consolidate?
- How will 2009 compare to 2008? When will the market begin to grow again?
- What types of core WMS solutions and add on modules will sell well during the downturn? What regions and industries should suppliers focus on?
- WMS is often sold as part of a larger supply chain or enterprise suite. How important is that suite? How does the suite offered by leading suppliers need to change so that leading suppliers can maintain and grow their market share?