The report from analyst firm Gartner shows that the top five vendors in the supply chain market all increased revenue.
But, Gartner research director Balaji Abbabatulla says that only two vendors – JDA and Infor grew their market share by outperforming the total market growth.
"The 'other vendors' category is growing significantly faster than the top five market incumbents, but the top five rankings remained the same in 2017," Abbabatulla says.
"SCM technologies create digital value by optimising the flow of products, services and related information from source to customer and from customer to source.
"Smaller cloud-native vendors enjoyed an average revenue growth of 41.4% in 2017. The top five vendors are defending their market share by pivoting toward cloud-first strategies and quickly introducing new products through development, acquisition or partnerships on their cloud platform."
And according to Abbabatulla cloud offerings are driving growth in the market partly because more midsize organisations are adopting SCM solutions to drive digital business models.
He says midsize organisations help bolster revenue growth because they are net new customers of SCM products and are not bound by replacement and upgrade cycles from legacy investment.
"Cloud solutions typically have lower barriers to entry and are more easily scalable, and are therefore a better fit for midsize organisations looking at SCM for competitive advantage.
"We expect that offering a well-defined, vertical-industry-oriented strategy for midsize organisations will grow rapidly over the next five years."
Abbabatulla says another source of competitive advantage for SCM vendors has been effective incorporation of artificial intelligence (AI) into their products.
"While adoption levels of AI vary across sub market segments, we expect it to drive revenue growth as AI technologies and tools mature. This is because AI can bring productivity and user experience improvements by automating routine tasks and providing more effective support to complex decisions."