A new study predicts that the market for transportation management system (TMS) technology will grow to $1.7 billion annually by 2006, up from $804 million in 2001.
Consulting firm ARC Advisory Group, which conducted the study, said about 20% of TMS market revenues are derived from recurring charges, such as subscription, transaction, and hosting fees.
ARC defines TMS as "software solutions that facilitate the procurement of transportation services, the short-term planning and optimization of transportation activities, and the execution of transportation plans."
Adrian Gonzalez, a senior analyst with Dedham, MA-based ARC and author of the study, said companies are now beginning to take a "holistic" view of transportation, thereby driving software vendors to expand the scope of their TMS systems.
"Transportation activities do not occur in a vacuum. They impact and are affected by other business functions. Not surprising, software vendors are incorporating complementary capabilities into their solutions, such as order collaboration and inventory management," he said.