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Despite forecasts for higher growth rates, the market for transportation management systems (TMS) grew by only 1.5 percent last year, according to ARC Advisory Group. However, ARC cautions this rate may not accurately reflect demand in the actual market. If you subtract numbers from the three leading vendors, the rest of the market grew by a much more robust 10.6 percent.

Obviously the top vendors' financial struggles are affecting sales, but beyond that are several other factors that are helping reshape the TMS market, says ARC.


Increasing acceptance of socalled recurring-revenue pricing models, such as subscription- based pricing, has brought about changes in the market. Recurring revenues grew by 9 percent last year and have increased by 27 percent since 2001. By contrast, license fees and maintenance fees both declined in 2003. Also affecting growth is the obsolescence of traditional batchoriented optimization and much stronger competition from enterprise resource planning (ERP) vendors, like SAP and Oracle.

ARC Advisory Group is a consulting group focusing on supply chain management that's headquartered Dedham, Mass.

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