The True Distinction Among Top WMS Vendors

Competition within the Warehouse Management System (WMS) environment continues to intensify. Senior supply chain analyst at ARC Advisory Group, Steve Banker, claims, “There are a lot of players in WMS, and the result is a fragmented market. The top WMS vendors own about 33% of the market (based on worldwide software and service sales in 1998).The remaining market share is divided among nearly 100 other vendors.” In such a landscape, it can be difficult to distinguish between top WMS vendors. 

Recognize Vendor Quality Before Implementation

Warehouse Management System providers are typically categorized into three levels. Inevitably, top WMS vendors acquire the largest amount of profit, workers, and overall company size. Second tier enterprises are slightly smaller than top WMS vendors. Finally, bottom tier providers are often the smallest of both tiers, allocating only a regional sales staff and resources.

Top WMS vendors typically tend to attract clients with revenues as high as $1 billion and greater. Second tier vendors are usually landing clients with moderately high revenue below $1 billion but significantly greater than $50 million. Despite the slight economical difference, top WMS vendors and second tier vendors may occasionally dip into the same customer pool in the marketplace. The main distinction between top WMS vendors and second tier vendors is in product functionality. Before deciding on a system, high revenue clientele should carefully assess the support services offered, which include implementation knowledge and classroom-based training.

Examining the difference between top WMS vendors and second tier vendors is an essential, yet tedious process. One example is considering top WMS vendors (in terms of revenue) as tier one vendors (in terms of quality). What are the distinctions among lower ranked ranked providers? President of McHugh Software International, Ritch Durheim, claims, “There are differences between tier one and tier two companies. But, on the boundary of those tiers, the differences become somewhat blurred.”

President of Uniteq Application Systems, Owen Shea, argues that the only distinction between top WMS vendors and second tier vendors is the $20 million budget investment. Shea states, “”Once you get above $20 million in revenue, you are investing a minimum of $2 million to $3 million back into your product. A $3 million company might only reinvest $200,000.This is the real difference.”

As you look at top WMS vendors, take a look at your own company, its revenues, and its needs to determine which vendor can provide the solution suited to your business needs.


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