SAAS Model Boosts TMS Market

Despite a severe worldwide recession that caused most enterprise software markets to shrink by double digits, the impact on the transportation management systems (TMS) market was much less substantial because of the increasing prevalence of software as a service options (SaaS), according to Steve Banker, service director for supply chain management and the primary author of ARC Advisory Group’s Transportation Management Systems Worldwide Outlook.

“Between 2007 and 2009, TMS sold on a traditional software model declined at a double digit rate. If it had not been for solutions sold in a SaaS model, which continued to have good growth, the market would be in far worse shape,” said Banker.

ARC defines TMS as software solutions that facilitate the procurement of transportation services; the short-term planning and optimization of transportation activities, assets, and resources; and the execution of transportation plans on a regional or global basis. They address all modes of transportation, including ocean, air, rail, full truckload, less-than-truckload, parcel, and private Fleet.

The SaaS sales model consists of solutions sold in a leasing model. These revenues can be associated with one instance of software being used by multiple customers; traditional hosting where each customer has their own instance of software that is hosted by the vendor; or it may involve the customer leasing software they host on their own servers.