Further proliferation of cost-free procurement software is forecast to continue eroding prices
Los Angeles, California (PRWEB) March 31, 2014
The procurement software market exhibits a buyer power score of 3.9 out of 5, which means buyers wield above-average influence in the procurement software market. “Most of this power is an outgrowth of the availability of free procurement software,” says IBISWorld research analyst Dale Schmidt. “These versions do not have near the robustness or functionality of their paid counterparts, but buyers have been able to leverage their existence to force down prices.” The stable, yet falling, prices allow buyers to devote extra time to find the deal that is right for them.
Despite competition from gratis software, procurement software vendors still have considerable market elements in their favor. According to Schmidt, “Buyers can leverage this zero-cost software to lower prices, but for buyers needing a procurement software suite with the robustness of the paid offerings, they are facing increasingly fewer options.” The market's larger vendors have been systematically buying up the smaller competition, leaving fewer choices for buyers. The choices that buyers are left with are often difficult to compare due to the high degree of product specialization. This nature and the lack of effective substitutes allow developers to generate massive profit margins, especially for high-cost offerings, which cannot be duplicated by free software. As a result, the price declines in recent years have not hurt their bottom lines significantly.
On the plus side, buyers can rest assured that most vendors are in secure financial shape and do not need to worry about possible bankruptcies or service interruptions. The market for procurement software spans most sectors of the economy. As a result, though some of these markets are high risk; the diversification of markets prevents significant sales shortfalls from occurring across the board. The minimal risk of supply shocks and the diversification of markets leads to a low supply chain risk for publishers. The low supply chain risk and steadily rising sales result in low bankruptcy risk for most publishers, which is a positive for buyers. Current major vendors include SAP, Oracle, IBM, JDA Software Group, Epicor and GT Nexus. For more information, visit IBISWorld’s Procurement Software procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of procurement software, which aids and tracks the activities of a company's procurement department. The software works in every part of the procurement process, from the drafting of requests to buyer selection, invoicing, payment and receipt verification.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.