Cloud: The Driving Force for TMS and Other Industry Trends – Logistics Viewpoints (blog)

ARC Advisory Group conducts an annual analysis of the global transportation management systems (TMS) market. The research process includes the analysis of large amounts of information and interviews with executives from numerous TMS software companies. The process concludes with the publication of ARCs TMS Global Market Research Study, which analyzes the market shares across numerous categories of the leading TMS suppliers. Aside from the market share analysis, the study looks at the trends that are driving and/or inhibiting growth in the TMS market. This years study will be publishing in the next week so I wanted to give a sneak peek at some of the high-level trends around the TMS market.

One of the biggest trends in the TMS market is the rise of cloud and SaaS solutions. While SaaS revenues grew significantly this year, software revenues declined. With more supplier turning to cloud-based solutions, this is a trend that will continue. When companies make the commitment to SaaS, there is a learning curve. Generally, companies see that for every percentage in growth in SaaS revenue, their software revenues to shrink by 3 to 5 percent. Cloud solution providers generally discourage customization, at least within the base code, resulting in faster implementations, which causes a decline in implementation revenues. The lack of customization means maintenance revenues will also decline.

SaaS solutions are becoming increasingly popular in the TMS market, with more small suppliers selling SaaS solutions to Tier 3 customers. For those companies selling software licenses, especially smaller companies, the out-look is not good. Unless a strategy is in place to transition to a cloud solution, these smaller companies likely will not be around for many more years.

Aside from the SaaS megatrend, below are a few regional, industry, and complementary market trends:

Regional Markets

Industry Segments

Complementary Market Trends

If you are interested in the complete report, which analyzes the growth of the TMS market in multiple segments, please contact Conrad Hanf (chanf@arcweb.com). The report includes market share data and a five-year growth forecast of the overall market and specific segments and industries.

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Cloud: The Driving Force for TMS and Other Industry Trends - Logistics Viewpoints (blog)