AMR: Retail Software Sales To Top $10 Billion by 2011

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 for 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 marketshare and marketsize studies are nothing if not list-passionate and this report didn't disappoint. The top dozen application types, by 2006 revenue, were (from Number One through Number 12): POS/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; lifecycle pricing, $114 million; demand replenishment, $115 million; sourcing/PLM, $99 million; workforce/task management, $86 million; and E-Commerce platform, $77 million. (Trivia answer: the lowest of the 21 items listed was perishables and fresh item management, $15 million.)

Those also ran lots of lists of the software vendors who collectively got all of that money, starting with SAP ($210 million) and Oracle ($205 million), both with roughly 9 percent of the market; Microsoft, $161 million, seven percent; NCR, $117 million, five percent; Retalix, $77 million, three percent; SAS, $67 million, three percent; Activant, $56 million, two percent; Hyperion, $44 million, two percent; DemandTec, $36 million, two percent; Cognos, $35 million, two percent; JDA, $31 million, one percent; Aldata, $29 million, one percent; Torex, $27 million, one percent; PCMS Group, $26 million, one percent; Microstrategy, $25 million, one percent; Escalate, $23 million, one percent; Soft Solutions, $20 million, one percent; Kronos, $19 million, one percent; NSB Retail, $18 million, one percent; Manhattan Associates, $17 million, one percent; Business Objects, $15 million, one percent; Epicor/CRS, $15 million, one percent; Micros, $14 million, one percent; Taleo, $12 million, less than 0.5 percent; and 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."