red hot software

Appearances can be deceiving. Take the market for supply chain event management software, for instance. With its vendor ranks thinning and capital drying up, that sector might appear to be in critical condition. "At one time, there were more than 20 startups funded by at least $100 million in venture capital," says Steve Banker of ARC Advisory Group. "Most of those companies have disappeared and venture investments in this area have been a bust."

But actually, the supply chain event software market is enjoying robust good health. In fact, the type of event software known as logistics visibility and control (LV&C) has emerged as the highest-growth category in logistics software, according to Banker, who is ARC's service director for supply chain management and author of a new report, Logistics & Control Worldwide Outlook.

Logistics visibility and control is a variety of supply chain event management software that focuses specifically on logistics processes, such as international visibility or reverse logistics. (Event management solutions have become much more focused on specific processes such as decision support, workflows and even analytics, according to ARC.) And LV&C is red hot right now. Spending on logistics visibility and control software has shot up by 29 percent annually in the last three years, far outstripping growth in warehouse management and transportation management software. According to ARC, the market for LV&C systems totaled $196 million in 2003.

Though it's true that many of the smaller venture-backed firms have fallen by the wayside, the larger players in the LV&C game continue to thrive. Market leaders like Optum and Yantra (each of which has about 14 percent of the market) have experienced strong growth. And the market's showing no signs of retreat. ARC projects an annual growth rate of 19.5 percent through 2008, bringing the total market to well over $400 million. Perhaps some of those investors will want to venture back into the space.