The WMS Market

How Can WMS Vendors Be Categorized?

How Can WMS Vendors Be Categorized?

The WMS market is a part of “Software and Electrical Automation”, which is a branch of the intralogistics industry. Intralogistics itself is a part of the logistics industry.

There are more than 150 WMS vendors in Germany, Austria, and Switzerland alone: this number only includes those who have successfully implemented their WMS within the scope of a project. The vendors who only sell their product on a CD or DVD are not counted in this number.

WMS vendors generated sales of more than 951 million euro in 2012. Thus, their sales turnover makes them an important part of the intralogistics industry as well.

Market Presence of the WMS Vendors

The first “WMS” were developed in the first half of the 1980s and introduced into the market as a mature product. Some of these WMS vendors are still active in today’s market. This shows that the typical WMS vendor is “old” relatively speaking. Looking more closely at all of the WMS vendors, we see that

  • More than 50 percent of the vendors have been active for more than 10 years
  • Almost 30 percent have been active for more than 20 years
  • Approximately 19 percent have been active for more than 30 years

market presence of the WMS vendors

Distribution of the WMS Vendor Types

WMS vendors can be categorized into three types:

  • Pure WMS vendors
  • Suite vendors
  • Warehouse technology vendors

The statements about the three categories of vendors apply to the average vendors in each group. There are exceptions of course: The warehouse technology vendor who markets their WMS as an independent product, the suite vendor who considers their core competencies to be in the value-added area of warehousing, and the “pure” WMS vendor who sells a WMS that is only suitable for a simple, manual warehouse.

distribution of the WMS vendor types on the WMS market

"Pure" WMS Vendors

The “pure” WMS vendor only offers WMS and other storage-relevant software (for example, forklift control systems, Pick by Voice, and so on). Normally they have a – usually informal – cooperation with ERP vendors who do not offer a WMS module and warehouse technology vendors whose WMS does not have enough functionality. The goal of their cooperation with other vendors is to increase their product offering and the synergistic effects of the acquisition of new customers. Potential customers benefit from the tried and tested nature of these vendor relationships.

The core business of the “pure” WMS vendor is software support for the most complex to the simplest processes as well as for fully automated warehouse.

Software Suite Vendors

The WMS is a part of a software suite (for example, an ERP system). Software suites are made up of many large modules: financial accounting, controlling, purchasing, inventory management, and so on. The suite vendor usually comes from the field of business management and added warehouse management later to the products it was offering. They sell and market the entire suite although lately the functionality of the WMS module is starting to take the spotlight. The WMS module is almost never the sole reason for a customer buying the suite. Most purchase the suite because they like the idea that it can do everything they need. From a pure software point of view, the WMS module could be run on its own. This means that it does not need the suite to operate but it usually needs an ERP system. However, this is almost never done and instead the WMS module is almost always installed with the ERP system.

The core business of the suite vendor is manual or semi-automated warehouse with somewhat simpler processes although lately they are starting to focus on complex systems with a high degree of automation. They are also currently investing a lot of development time into the WMS module of their suite and are actively expanding its functionality.

Warehouse Technology Vendors

The warehouse technology vendor originally comes from the metal construction industry. The configuration of electronics became a bigger and bigger part of the automation of a warehouse - especially control electronics such as storage and retrieval equipment. It is out of this development that warehouse management systems emerged from warehouse technology vendors. These systems are usually limited in functionality (more like an IMS than a WMS). The development focusses on the strategies for controlling and optimizing the warehouse technology such as optimizing double cycles in multi-depth storage systems in automated small parts warehouses. The IMS is often not sold as an independent product. The focus of the sales is on the warehouse technology and the IMS is an “accessory”. The IMS is almost never sold without the warehouse technology. Due to the specialization in the area of control and optimization, the IMS is often implemented as a component of another WMS and primarily used as a “Black Box” for controlling warehouse technology. The warehouse itself and the processes in the warehouse are often controlled by the WMS of another vendor.

The core business of the warehouse technology vendors is fully automated warehouses with complex processes whereby the sale of warehouse technology has priority over the sale of the IMS.

If you are interested in learning more we suggest you read the WMS MARKET REPORT COMPACT.

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