Magic Quadrant for Warehouse

Research
Publication Date: 6 April 2009 ID Number: G00162718

Magic Quadrant for Warehouse Management Systems
C. Dwight Klappich

Although the WMS market is mature, technology modernization strategies and increasing demand in emerging markets is fueling modest growth. Leading WMS vendors continue to broaden and deepen their offerings, supporting architectural strategies better-suited to the demands of agile enterprises.

© 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

WHAT YOU NEED TO KNOW
During 2009, the warehouse management system (WMS) market will weaken due to deteriorating world economic conditions. This is leading WMS buyers to place more emphasis on vendor and product viability and total cost of ownership (TCO). Cost containment is a dominant objective for supply chain organizations, and the need to lower costs will force buyers to scrutinize the business cases for all new supply chain management (SCM) application investments (especially WMS that are normally replacements of legacy systems) more thoroughly in 2009. This strong inclination of users to focus on minimizing SCM investment costs will make TCO a more important consideration in new WMS purchases. During 2008, the WMS market was led by Manhattan Associates' WM for Open Systems and RedPrairie's WM/D because these offerings best-address the abovementioned requirements, and both vendors have a compelling vision for how WMSs and, more broadly, how supply chain execution (SCE) will evolve during the next five years. Both these vendors leverage the depth and breadth of their WMS offerings, and their extensive experience in the WMS market, to support customers with basic requirements and many of the most complex and sophisticated users of WMS. SAP and Oracle have WMS offerings in the Visionaries quadrant because they continue to make progress in delivering deeper WMS capabilities, but they are not leaders yet. HighJump Software and Manhattan Associates WM for Windows each has a unique vision for simplifying the WMS experience, from application administration and implementation through to end-user ease of use. Sterling Commerce remains a visionary, due to its market-leading, service-oriented architecture (SOA) and model-driven application. Infor has updated its WMS and, because of the company's size, as well as its modern architecture, one of its offerings is in the Visionary quadrant. Several vendors are positioned in the Niche Players and Challengers quadrants because they lack the WMS depth or breadth of leaders or visionaries. They primarily focus in one industry or one geography (in the case of this research, Europe), and their solutions operate on a single proprietary hardware platform, such as the IBM iSeries. Also, the solutions are not the vendors' products of the future, or they lack the adaptable technical architectures required by the most demanding and innovative WMS buyers. These vendors are often functionally adequate or, in some cases, are a good choice for many users, but their offerings lack the full depth, breadth or robustness of functionality demanded by the most complex and sophisticated users, and these vendors might not have a broad vision for next-generation WMS. These vendors might also lack the experience, numbers of clients, customer references or business viability of the leading vendors in the market. This is not to say that they are not viable or, in some cases, preferable for many WMS buyers. In cases such as Europe-only warehouse operations, vendors such as Aldata, Infolog or Consafe could be acceptable, if not preferable, choices.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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MAGIC QUADRANT
Figure 1. Magic Quadrant for Warehouse Management Systems

Source: Gartner (April 2009)

Market Overview
The core WMS market is mature and dates back nearly 30 years, when commercially packaged WMS applications emerged. From its inception, core WMS functionality has remained fundamentally the same (receiving, put-away, inventory management, cycle counting, rule-based locator, picking, replenishment, packing and shipping), although there have been notable improvements in the depth of core WMS capabilities, the expanded breadth of the WMS application footprint (with more value-added capabilities surrounding the core WMS) and, recently, significant improvements in application architecture, enabling more user-tailoring of the WMS during and after implementation. As a mature market, most organizations in North America and Western Europe with warehouse operations have some form of WMS supporting those operations. Consequently, WMS market growth comes from several areas. In established, mature markets, new WMS sales are replacements of outdated WMS applications or WMS license purchases for additional sites. Additionally, new WMS purchases will grow in two emerging markets: first, in small and midsize businesses (SMBs) in North America and Western Europe, and, second, in international expansion into Eastern Europe, Latin America and the Asia/Pacific region. Today, the WMS market is heavily weighted toward midsize to large warehouse operators in North America and Western Europe, with these regions representing more than 80% of WMS licenses and maintenance revenue, and 55% and 28% of market revenue, respectively. However,

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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projected growth rates through 2012 are expected to be higher for emerging markets than for established markets, where more than 50% of WMS revenue is from maintenance. Given the state of the WMS marketplace, a few themes dominate when evaluating vendors. Although functionality remains important, there is near-functional parity for basic WMS capabilities across WMS providers. However, there remain significant differences in the overall depth of core WMS packaged functionality, in the overall breath of value-added WMS capabilities offered by the vendors and in the abilities of vendors to support the most-complex warehouse environments. Likewise, technical architecture is a more important evaluation criterion for buyers in this market evaluation, because users' needs for business agility and, thus, application adaptability require architectures that enable zero- or low-modification implementations and that allow users to adapt their WMSs as business changes occur. Additionally, because there is nearfunctional parity for core (basic) WMS capabilities, vendor domain expertise and customer experience, with relevant referenceable customers, are important considerations. Lastly, given growing WMS demand in emerging markets (such as Asia, Latin America and Eastern Europe), the ability of vendors to provide WMS sales, implementations, and customer support beyond North America and Western Europe are of growing importance.

Technology Modernization
Gartner continues to see momentum for application modernization across the enterprise application landscape, and WMS applications are not exempt from this trend. Two primary factors drive the importance of WMS technology modernization. First, the maturity of the WMS market means that many enterprises use aging WMSs, with obsolete or soon-to-be-obsolete technical architectures. If the vendor providing the underlying technical building blocks plans to stop supporting those technologies, then this alone is justification to modernize, although the business case for doing so will be difficult. The second primary reason for modernization is to invest in applications built on technologies that are better-suited to the needs of the business and end users. In this case, we find the need for agility is leading new buyers to place more emphasis on WMS technology platforms that enable users to better-control and manage application changes, because business conditions warrant always protecting the ability to remain current with application version upgrades. Likewise, user interface (UI) modernization is focused on the enduser experience, and on providing more and better information in a consumable format to both power and casual users. One of the distinguishing differences between vendors on the left side of the WMS Magic Quadrant and those on the right side is technical architecture — most notably, application adaptability and user experience. Although technical architecture was less of an issue in past evaluations, it should now be one of the top issues for several reasons. First, the long life span and high switching cost of WMS applications demands that any new purchase have as long a useful life span as possible. When buying a new WMS application, buyers should gravitate to the most contemporary technology, offering the longest usable life for their WMSs. Second, in the past, WMSs were heavily customized and it was difficult to remain on a vendor's upgrade path, because customization had to be ported each time the application was upgraded. Modern technical architectures first help reduce the amount of customization needed, but also, as importantly, provide tools that enable a high percentage of, if not all, customization to be done without modifying the underlying code, thus protecting the upgrade path. Finally, supply chain operations are more volatile than they were years ago, and change is continuous, demanding that applications be adaptable. The key components for users to evaluate as part of their WMS technology modernization initiatives include: • Service-Oriented Architecture (SOA) — SOA continues to be a compelling topic for IT organizations considering application replacement and modernization. Most WMS

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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vendors have not rewritten their applications to be SOA-compliant, but instead have wrapped their application programming interfaces in SOA-style technologies for syntactic compliance with the demand for SOA. Although this approach will reduce some integration costs, it will not deliver the capabilities required for increased agility (see "Most Benefits of Service-Oriented Architecture for Business Applications Are Longer Term"). Users should evaluate the depth of SOA offered by WMS vendors under consideration and their abilities to deliver dynamic process composition, in addition to SOA's ability to facilitate integration. • Model-Driven Business Process Applications — Model-driven business process applications refer to business applications that support explicit graphical models of supported processes and generate output that configures commercial runtime components based on the process model (see "Model-Driven Packaged Applications: Using SOA and BPM to Modernize Packaged Applications"). Many WMS products have an implicit representation of processes, but they are not intuitive, explicit or graphical. Model-driven business process (WMS) applications will enable better process alignment between end users and the IT organization in warehousing applications, and will provide better tools for supporting continuous innovation and adaptation. Rich User Interface — As WMSs move beyond the warehouse operator and offer more management capabilities to decision makers and nonoperators, we find that the UI becomes increasingly important. We find notable UI capability and strategy differences across WMS vendors and WMS offerings. Users should evaluate the ability of the WMS to support Ajax or Flash-based UIs, and the degree to which these interface technologies fit with their next-generation application portfolios. Integration with socialsoftware environments will become increasingly important. Performance Management and Analytics Capabilities — As a mature market, most WMSs cover the basic execution tasks needed to operate a warehouse; however, since their inception, there hasn't been much "management" support in WMS, except for some simple reporting capabilities. One of the fundamental trends in WMS is the need to provide managerial users more and richer information to allow them to "manage" their warehouses better. Vendors have offered or have been adding analytical reporting for some time, but the new trend is to provide performance management capabilities in which users can define the metrics and key performance indicators (KPIs) to monitor, and have these presented in multiple ways, such as via user portals and dashboards.

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WMS Functional Evolution
Core WMS functionality is approaching parity across WMS vendors, and there are marginal differences in core functionality across WMS applications. Indeed, leaders will have more and deeper functional options for each capability, such as one solution offering six standard picking methods another 10. However, for many less complex or sophisticated WMS operations, the shear number of options is not of paramount importance. Nonetheless, the products remain differentiated from a functional breadth, richness and usability perspective — all-important components of success for a WMS in a high-volume, complex and sophisticated warehouse. One of the distinguishing characteristics of all WMS vendors is the overall breadth of their WMS application footprints, considering the core and extended warehouse management capabilities they offer. For example, Gartner evaluates extended capabilities such as integrated labor and yard management, task interleaving, dock scheduling, value-added services, and support for automation, radio frequency identification (RFID) and voice-picking operations as part of the decision criteria for a WMS, because so many users are incorporating these functional requirements in their WMS selections, although these would have previously been considered separate markets.
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SCE Convergence
SCE convergence refers to the need for supply chain organizations to do a better job of orchestrating and synchronizing processes across functional domains. More precisely, these organizations want to support end-to-end processes such as order-to-cash, in which the end-toend process spans traditional functional boundaries such as warehousing, transportation or manufacturing. For example, warehousing and transportation were, historically, independent application silos bought at different times, to solve separate problems, and were selected using different criteria and intended to function as stand-alone applications. The problem remains that a fulfillment process spans the warehouse and transportation areas, and, as functional silos, it is hard to coordinate activities across both domains; thus, these groups have conflicting objectives. Although warehousing and transportation are the most obvious points of convergence, they are not the only ones. In fact, we see more innovative convergence emerging that links warehousing and manufacturing processes than more traditional logistics integration. We also see several vendors with strong SOAs that have much broader visions for SCE convergence, where end-toend processes can be assembled by connecting processes and services that span a variety of previously independent functional areas. For example, if an enterprise ships hazardous materials across country borders, then the fulfillment process to support this end-to-end process might touch warehousing, transportation, environmental health and safety, and global trade compliance. Vendors are just beginning to support rudimentary SCE convergence and leading vendors' initiatives remain nascent, with some simple cross-functional process integrations (such as dock scheduling partially linking warehousing and transportation), but with minimal, if any, crossfunctional process orchestration. Early adopters are beginning the process of making the transition to SCE convergence, starting with defining consistent business objectives across SCE functions. As the early adopters look for solutions to support their efforts, we expect WMS vendors to pursue SCE convergence more aggressively, delivering more-robust capabilities.

Zero-Modification Implementations
In the past, WMSs tended to be heavily modified. One reason for this is that the closer an application gets to the actual operational level, the more important it is that the application support the most-efficient execution of an activity, and if modification is needed, so be it. Although modifications were not always necessary, quite often they were due to the fact that the efficiency of a particular task would be improved with the modification. Users could justify the cost of the modification based on the number of times that a particular function was performed. The problem is that, while justifying the change was easy, the extent of the modification made WMSs among the least-updated systems and, often, this inhibited the ability of WMSs to adapt to future process needs. Users are increasingly focused on the painful costs of modifications to their WMS systems. Users can spend more than 50% of postimplementation TCO supporting these modifications, and many are looking for ways out of this situation. Vendors are beginning to meet these requirements with scripting languages and process management capabilities. Users are beginning to demand that vendors have a coherent strategy for delivering a zero-modification implementation, and we view this as a critical component to a vendor's success in this market.

Person-Centric Warehouse Processing
The core WMS functions of receiving, put-away, locating, picking and shipping have changed little since packaged WMSs emerged more than two decades ago. Logistics operations continuously strive for improvements in productivity, efficiency and performance. However, for organizations that have a legacy WMS in place, these improvements increasingly will come through empowering individual workers with the right combination of technologies to exploit their skills and knowledge, and not from further attempts to tightly engineer all processes. The ability to address the fundamentally chaotic nature of the individual work process must be embedded in WMSs.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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The chaotic nature of process will only be exacerbated as organizations begin to explore how individuals interact with broader business processes. Critical to exploiting this trend toward person-centric processes is the support of worker empowerment with the right technologies and application logic, or empowerment could devolve into anarchy. For example, use of technologies such as voice or pick-to-light should be supported with functional capabilities such as task interleaving or resource management, to ensure that workers are provided the best information to make the right decisions when needed. There are many areas in which person-centric processes are being exploited in WMSs, such as improvements in personalization of mobile devices, expanded use of voice and enhancements in labor and resource management tools, to move beyond simply tracking activities toward using these tools to support individual development programs.

Market Definition/Description
We define a WMS as an application that manages the operations of a warehouse or distribution center. Application functionality includes receiving, put-away, inventory management, cycle counting, task interleaving, wave planning, order allocation, order picking, replenishment, packing, shipping, labor management and automated material-handling equipment interfaces. Radio frequency systems, used in conjunction with bar codes and, increasingly, RFID, provide the foundation of a WMS, delivering accurate information in real time. We include integrated functionality, such as voice picking, parcel manifesting and labor management functionality, as components of a WMS evaluation. This is because, although these components are available in stand-alone form, they have become components in a large number of WMS deals. Additionally, as the WMS market evolves from conventional packaged applications to modeldriven componentized applications, we will continue to view it as commercial vendor offerings of business service bundles, as well as process compositions, that form the basis for equivalent application functionality to what is offered in traditional, parameter-driven packaged applications.

Inclusion and Exclusion Criteria
To be included in the WMS Magic Quadrant, a vendor must offer a credible WMS product and vision for WMS in, at least, moderately complex warehouse environments. Additionally, the vendors' WMS product(s) must be active in the market, which means the vendor must be actively marketing, selling, implementing and supporting new customers in addition to current users, and that the vendor must be continuing to develop functionality for the WMS solution. The vendor must have live customer references holistically using the version of the WMS solution being evaluated. Solutions must meet at least one of the following criteria for inclusion: • Significant WMS market presence — The vendor must have annual WMS license revenue of at least $15 million, with combined annual WMS licenses and services revenue of greater than $25 million (license and services associated with packaged WMS implementations). Significant enterprise software presence — The vendor must have more than $500 million in annual enterprise application software license revenue (including non-WMS). This is because many end users are interested in the WMS offerings of major suite vendors. The WMS component must be part of a suite that is active in the market. Major SCM suite vendor — The vendor must have at least $50 million in annual SCM software license revenue. This is because many customers with significant investments in SCM suites would like to evaluate the capabilities of an integrated WMS product. Significant level of Gartner inquiry — A vendor or product may be included if Gartner receives a significant number of inquiries on a particular solution.
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Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Significant European presence — Because a number of users in Europe prefer to include at least one local vendor in their evaluations, we have included vendors that we've determined have a significant European presence. We do this specifically for Europe, the Middle East and Africa (EMEA) because several clients have requested local providers for EMEA projects, but we do not typically see the same requests for the Asia/Pacific region. Unique vision or presence — The vendor must have a unique and compelling vision for differentiation in the WMS software market that Gartner believes needs to be highlighted to end users.

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We have not included stand-alone, specialist, component providers of yard management, slotting, labor management, parcel manifesting, radio frequency, RFID or warehouse automation. We also do not cover materials-handling and engineering firms that focus primarily on building complex, customized, automated warehouses, whether or not they offer a packaged WMS application, because these firms do not typically offer their WMSs to the market. There are a number of other WMS vendors in the market, some of which Gartner has covered in previous Magic Quadrants. We have not included these vendors again, due to their overall size and influence on the market, but many of their products remain relevant options for targeted markets.

Added
• We have added Generix Group (Infolog WMS), because it has a notable presence and list of customers in Europe, especially in France, and the vendor has recently opened operations in Canada, focused on the North American WMS market.

Dropped
• We have removed the RedPrairie Marc WMS product, because it is no longer being offered to new customers in the market, and it no longer represents the strategic vision or direction for RedPrairie. RedPrairie will continue to support this product. We have removed Infor WM/Provia, because this product is no longer being actively offered in the market, although Infor will continue to maintain and enhance the product and might elect to offer it in certain situations where it believes the solution fits the user's needs better. However, users should recognize that this is not the strategic WMS product for Infor. We have removed the Kewill WMS offering, because it did not meet our inclusion criteria for European WMS vendors for this WMS Magic Quadrant. Kewill has been replaced by Generix Group. We have removed SwisLog because, although the vendor does offer a packaged WMS, it is primarily a materials handling and engineering firm, focused on building complex, customized, automated warehouses, and its WMS product is not generally offered to the market.

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Evaluation Criteria
Ability to Execute
The WMS market is mature and remains highly competitive. Because of the intense transactional nature of warehousing systems, Gartner places a high value on the offerings' depth and breadth

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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of functionality. We evaluate the WMS products across a range of criteria, including technology, receiving, put-away, picking, shipping, replenishment, quality assurance (including value-add and light manufacturing), labor management, reporting, automation interfaces and voice technology, labeling and retail compliance (including RFID functionality), multitenant and multisite functionality, and returns functionality. Additionally, because there is considerable disparity in company size and the ability to deliver solutions on an ongoing basis, Gartner places a high importance on the overall viability of the business. Because of the complex nature of a WMS, we give a high rating to customer experience. We don't fully believe that a vendor has functionality, and that it is usable, until the functionality is demonstrated to Gartner, and until users can verify that the functionality is usable in the real world and is of high design quality. Market responsiveness and track record also serve as good indicators of the ability of a vendor to deliver value to users. Because of the lower number of new deals in the WMS market, sales execution and pricing, although important to a company's performance, don't represent the same indicators of ability to execute as they would in other markets; therefore, this factor has been given a low weighting. Pricing in the WMS market is inconsistent across deals and is, to a large degree, arbitrary and based on the specific circumstances of an individual initiative. Marketing execution has a low weighting because of the relatively small effect that it has on vendor performance in this market. Operations are important, but are not a differentiated part of the offerings in the WMS market, so it is given a low rating (see Table 1). Table 1. Ability to Execute Evaluation Criteria
Evaluation Criteria Product/Service Overall Viability (Business Unit, Financial, Strategy, Organization) Sales Execution/Pricing Market Responsiveness and Track Record Marketing Execution Customer Experience Operations
Source: Gartner

Weighting high high low standard low high low

Completeness of Vision
Although the WMS market is mature, we anticipate considerable changes, particularly related to the technology and enhanced decision support capabilities in areas such as performance management, event management and work planning. The dramatic changes embodied in these market shifts will require considerable skill for vendors to navigate; therefore, we place our highest emphasis in the market evaluation on the vendors' understanding of these market dynamics and their product strategies to support these offerings. The vertical-industry strategy remains a relevant factor in determining how well an offering is aligned with where the market is going. This is because the industry is moving toward requiring more vertical-specific functionality. Geographic strategy is also important for maintaining a strong presence throughout the market, especially because market growth is expected to be greater in emerging international markets.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Innovation remains a very important factor in the industry, even though core warehousing best practices have been well-established. Gartner continues to evaluate innovations in these practices; however, we also evaluate how a vendor is innovating with respect to SCE convergence, especially regarding the expanded role of integration and process orchestration with yard, dock, transportation management system (TMS) and mobile assets, as well as vendor extensions into other SCE or supply chain planning functional areas. Most WMS vendors have similar sales strategies, but how vendors intend to address international expansion and pursue growth in the lower end of the WMS market are important considerations; therefore, although there are strategic differences, we have rated sales strategy as standard (see Table 2). Table 2. Completeness of Vision Evaluation Criteria
Evaluation Criteria Market Understanding Marketing Strategy Sales Strategy Offering (Product) Strategy Business Model Vertical/Industry Strategy Innovation Geographic Strategy
Source: Gartner

Weighting high low standard high low standard high standard

Leaders
Leaders in the WMS market are present in almost all major WMS deals, and they win a significant number of these deals. Their offerings must be able to meet most mainstream warehousing requirements in complex warehouses without significant modifications, and a substantial number of high-quality implementations must be available to validate this. However, it is not a requirement that every project performed by the vendor be executed flawlessly. Selecting a leader does not guarantee that your project will be successful. Leading offerings are also not immune from takeover in this market. Every vendor, except possibly the largest multisuite vendors, is vulnerable to takeover, although, given the current credit markets, this is less likely now than in the past. Leaders' offerings must anticipate where customer demands are moving and have strategies to support these emerging requirements ahead of actual customer demand for them. Leading vendors should have a coherent strategy to support users' business process platforms (BPPs) and SCE convergence. Leaders also invest in and have processes to exploit innovation, and they are normally the first to introduce new things.

Challengers
Challengers' offerings are often running some very large and complex warehousing facilities, and these solutions are often in use by a large number of individual enterprises supporting multiple warehouse operations worldwide. However, because of technology issues or business strategy issues, we don't perceive these offerings as a strategic component of the market going forward. It is unlikely that vendors will "force" users to migrate off these offerings, but they will become less capable of offering functionality at the leading edge of the market. In this market, as the newer platform products evolve and mature, the challengers' offerings are more appropriate for near-

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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term warehousing requirements, where other factors, such as user desire to deploy on a specific operating platform, such as the IBM iSeries, overshadow other considerations.

Visionaries
To be a visionary, vendors must have a coherent and compelling strategy that seeks to deliver a robust and vibrant product to the market. Visionaries fall into one of two categories: (1) They can be the significant WMS offerings of large vendors that have yet to mature into a leading position in the market. Additionally, these vendors must anticipate user requirements across all functional areas of WMS, must demonstrate a commitment to a BPP strategy and must be able to articulate a strategy for pursuing SCE convergence, and (2) They can be specialist vendors with unique and potentially disruptive views of where the market is going. In both cases, however, these offerings have yet to demonstrate an ability to handle a broad range of complex user requirements without modifications. At a minimum, solutions in the Visionaries quadrant have next-generation WMS application architectures that support adaptability and that can approach zero-modification deployment.

Niche Players
The vendors in the Niche Players quadrant could remain viable, stand-alone vendors because they focus on a geographic or vertical component of the market. However, this focus is not a compelling enough differentiator for a vendor to eventually ascend to a leadership position. As the market continues to consolidate, these vendors remain vulnerable to acquisition. Offerings in the Niche Players quadrant, although often solid WMS solutions for a specific industry or geographical region, are not as broad as WMS solutions in other quadrants, and these solutions will likely not evolve to broadly support SCE convergence. All these offerings meet modest warehousing requirements, but they cannot meet more-complex requirements across the WMS market without modification.

Vendor Strengths and Cautions
Aldata
Strengths
• • • • • • • Aldata has good core WMS capabilities for retail execution for moderately complex food and nonfood warehouses. The vendor has a strong retail application suite that provides a good platform for WMS in retail enterprises that want common applications. Aldata's SCE convergence strategy centers on its retail vision of a complete retail suite and single vendor offering. The company has a strong European presence in Western and Eastern Europe, with modest expansion into the Americas and the Asia/Pacific region. It has a vision for person-centric warehouse processing with integrated voice technology. The vendor's WMS solution offers a managerial dashboard for monitoring warehouse activities. Aldata's clean, intuitive WMS UI supports multiple languages on a single instance.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Cautions
• • • • • • • The vendor is still developing a compelling vision for significant differentiation or leadership in the market. Aldata is exclusively focused on retail. This small, focused vendor in the cluttered retail application space might be an acquisition target. The company has not yet developed a strong BPP business or technology strategy. Aldata's WMS offering is not as broad as the leaders', and is lacking in some key areas (such as dock scheduling and yard management, although these are planned). The vendor's technical architecture doesn't provide zero-customization capabilities, and changes are handled conventionally, through consulting and development. The company's financial challenges continue, although profitability improved slightly during 2008

CDC Software
Strengths
• • • • • CDC Software (formerly known as Catalyst) represents a good value for a well-built, functionally broad and deep (although not leading) WMS. The vendor's financial stability and market scope have improved, as compared to when Catalyst was independent. CDC Software makes good use of open and modern technologies, such as an extensive use of rule engine technologies. The company has a strong vertical focus on high-volume distribution and service parts management warehouse operations. CDC Software has strong SAP integration competency, as well as integration with other ERP vendors, through its canonical process model, which is based on the industry standard OAGIS (endorsed by many ERP vendors). The vendor's suite of SCE products, such as labor management, is integrated and has common technology, but related products vary in depth of reference customers and functionality. Integration with CDC Software supply chain products could become a force for WMS and order management consolidation, but this is not yet a complete strategy.

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Cautions
• A collector vendor, CDC Software acquired the WMS specialist vendor formerly known as Catalyst. CDC Software has expanded its product portfolio, largely through acquiring struggling technology companies. Catalyst is now included in the CDC Software division, but integration with other solutions is ongoing, with no "live" customers yet. Although Catalyst had a long tenure in the WMS market, it lost momentum prior to CDC Software's acquisition, and CDC Software has yet to reverse this trend. It has closed deals with a limited number of new customers in the last few years.

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Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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The vendor has not yet articulated, or delivered, a compelling or comprehensive SCE convergence or innovation partner strategy, although it is better-positioned to do so, and now has a broader solution portfolio on which to build.

Consafe Logistics
Strengths
• Consafe Logistics has significant market presence in Northern European markets, as well as local presence (with implementation offices in Sweden, Denmark, the Netherlands and the United Kingdom). The vendor is expanding through acquisitions in Eastern Europe. Consafe Logistics has broad industry coverage in retail/consumer goods, industrial, wholesale, food and beverage, and third-party logistics. Most customers are running on recent versions of the vendor's software, and acquired products are consolidating onto the Astro WMS platform. Consafe Logistics is expanding functional presence with voice and yard management systems. The company offers an attractive and intuitive logistics dashboard for exception- and metric/KPI-based management. There are emerging capabilities for automation interface, mobility and visualization.

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Cautions
• • • • Consafe Logistics is primarily focused on regional deals in Northern and Eastern Europe. This is a small, regionally focused vendor. The company has no strategy for SCE convergence, beyond warehousing and logistics. Consafe Logistics is evolving to SOA, but does not yet have a zero-customization architecture. Tailoring is done through table and parameter setting, and code customization. The vendor has no vision for differentiation, which would likely result in market leadership.

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Generix Group (Infolog WMS)
Strengths
• • Generix Group has a strong European presence, especially in France (where it is headquartered), with 95% of its customers based in Europe. Infolog is a part of Generix Group, which has a very strong presence in consumer goods and retail businesses, offering a portfolio of products that includes WMS, point of sale (POS), electronic data interchange (EDI) and ERP for retail.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Infolog WMS is a mature product with a notable installed base in Europe that is able to handle the core WMS needs of complex warehouse operations, implemented in more than 20 countries. There is solid support for the core WMS capabilities, and the vendor continues to add more extended WMS capabilities, such as warehouse resource management and RFID. The same application is offered on multiple operating environments, including Windows, Unix, iSeries Oracle, DB2 and SQL Server.

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Cautions
• Although the vendor has recently opened operations in North America, based in Canada, it remains primarily a European-centric vendor, with most of its WMS resources in France. Although the product is mature, the technical architecture is dated, with much of the core WMS functionality still built in COBOL, although the vendor is wrapping it with Web technologies and is moving toward Java EE. This is not a zero-modification architecture, and customization, while discouraged, is handled through paid enhancement. Although the vendor's parent offers a portfolio of solutions, there is no vision for SCE convergence.

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HighJump Software
Strengths
• HighJump Software has a flexible and agile WMS product, due to the fourth-generationlanguage (4GL)-like business process composition toolkit that supports modification of core HighJump-delivered WMS capabilities, as well the creation of new WMS business processes. The vendor's WMS is well-suited to customers that want to take on and own support for the WMS product, including functional changes with minimal IT resources. There is a strong Microsoft orientation of product, from a technology and BPP perspective. The company offers a full SCE suite, but related products are less capable and have fewer reference customers. Customer references note the vendor's flexibility and willingness to establish a partnership-type relationship.

• • • •

Cautions
• HighJump Software has not yet systematically integrated a process/workflow modeling tool with its business process composition tools, although it does offer disconnected process models in Visio as documentation. The vendor's WMS offering is limited to the Microsoft operating system and tool deployments, but can use the Oracle database running Unix or Linux architecture.

•

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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In early 2008, 3M divested HighJump to a private equity firm, Battery Ventures. Although it is no longer under the umbrella of a large, diversified organization (which carries some risk), the divestiture provides HighJump Software with access to capital to make additional acquisitions, such as its recent acquisition of Beltek Systems Design, 3M's divestiture affects HighJump Software's ability to expand internationally, because the divestiture requires the vendor to have a more-focused international sales and support structure in major geographies where, under 3M, HighJump Software was able to leverage 3M's international offices, which were more plentiful and geographically distributed.

•

Infor (WM 2000)
Strengths
• • • Infor's WM 2000 has a long-term legacy in high-volume retail environments, particularly in grocery, and it has a modest installed base of users in these environments. This is a mature and proven offering for select vertical industries, notably grocery, but it does not represent the strategic direction for Infor's WMSs. WM 2000 offers integrated labor standards for high-volume retail, voice and slotting, and multilanguage support, including double-byte language.

Cautions
• This is a legacy product that is particularly strong, and it continues to be sold in select vertical industries, such as grocery; however, this product is not Infor's strategic WMS product. It is unlikely that Infor will formally retire this product at any point; however, users should plan on migrating to Infor WM or subsequent products to take full advantage of innovative functionality in the market. The vendor has multiple WMS offerings with competing and overlapping functionality, which will force rationalization, and customers will have to choose to remain on a legacy platform with a minimal future or to migrate to a different WMS platform. We believe that Infor currently carries at least $4.5 billion in debt, used primarily to fund acquisitions (Infor has indicated that this figure is materially overstated but has not provided additional information). This is a highly leveraged company by enterprise application software vendor standards. Gartner suggests that users bear this in mind in discussions with Infor and seek assurance that it has the wherewithal to execute on the components of its strategy that are relevant to their specific strategic requirements.

•

•

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Infor (WM)
Strengths
• • Infor WM (formerly WM 9.0) is a rewrite of the WM4000 product on a modern architecture, with a Web UI. This offering represents the strategic direction for WMS for Infor, and the vendor has an aggressive road map for additional functionality, because this is its centerpiece WMS product and represents a landing pad for WM2000 and ViaWare customers.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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• • •

Strong, global SCM deal performance and a strong global presence give Infor an edge in many emerging market deals, which can be helpful in global rollouts. Infor is committed to delivering a componentized service model that facilitates integration with its ERP products, although this has not yet fully materialized. The vendor offers a lower-TCO version of WM (aimed at the growing SMB market) called "Business Edition." This is a prepackaged version of WM delivered only on SQL Server that significantly reduces the service hours required to implement a basic warehouse. Given the size of Infor's SMB customer base, this could be an important offering for these customers. Infor is well-positioned to benefit from growth in emerging markets, and early success with this product in emerging markets indicates Infor is taking advantage of this trend.

•

Cautions
• • • • WM 9.0 still has a small number of live customers, and should continue to be treated as an early release product at this point. Infor's prebuilt integrations have proved challenging for some customers. Infor has multiple WMS offerings with competing and overlapping functionality, but not functional parity across WMS offerings. Early customers reported some product problems, but Infor has become more proactive in managing customer issues and seems to be delivering fixes in a reasonable amount of time for this new product. We believe that Infor currently carries at least $4.5 billion in debt, used primarily to fund acquisitions (Infor has indicated that this figure is materially overstated but has not provided additional information). This is a highly leveraged company by enterprise application software vendor standards. Gartner suggests that users bear this in mind in discussions with Infor and seek assurance that it has the wherewithal to execute on the components of its strategy that are relevant to their specific strategic requirements.

•

Manhattan Associates (WM for iSeries)
Strengths
• • • • • • Manhattan Associates' WM for iSeries is a mature and proven WMS application. The vendor is stable, and has conservative financial operations. Manhattan Associates' WM for iSeries has functional depth to support complex facilities. This offering is solid, scalable, stable, proven and referenceable. There are integration points with other Manhattan Associates products, such as Labor Management and Slotting. This vendor has the most robust and well-supported RPG (IBM iSeries) WMS available.

Cautions
• Manhattan Associates' WMS offering is limited to deployment in RPG/iSeries environments.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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• •

SOA enablement is primarily limited to the wrapping of integration interfaces to thirdparty applications, as well as to the vendor's other applications, such as TMS. Although stable and capable, WM for iSeries is not the strategic direction for Manhattan Associates.

Manhattan Associates (WM for Open Systems)
Strengths
• • • • • • Manhattan Associates' WM for Open Systems is becoming broadly used in a variety of moderate to highly complex warehouse operations. The vendor is stable, and has conservative financial operations. The company has a compelling vision for the next-generation UI and integration of performance management. This offering is the foundation for Manhattan Associates' SCE convergence vision, which is the most extensive of all SCM suite vendors. BPP capabilities enable strategic supply chain innovation partnerships. A network-based "Flow" offering/strategy and cross-application optimization offer a unique vision of extended supply chain capabilities, and the initial product supports this vision.

Cautions
• Manhattan Associates' WM for Open Systems is not designed to support a zeromodification implementation in complex operations, the offering is not a model-driven application, and it does not yet have market leading tools for functional customization using process modeling, workflow and scripting tools. The product architecture has not been modernized with SOA, but users should expect a coming release to look more like the modern TMS architecture in the Manhattan Associates portfolio. It can be more expensive to do business with this vendor, but many users see this as a justified premium.

•

•

Manhattan Associates (WM for Windows)
Strengths
• • • • This less-expensive offering from Manhattan Associates is focused on moderately complex facilities and logistics service providers (LSP) environments. The vendor is stable, and has conservative financial operations. Manhattan Associates has a robust implementation methodology and consistent implementation support. This WMS offering leverages Microsoft's technology stack for ease of deployment and ease of use.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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•

WM for Windows is the primary Manhattan Associates offering supporting SMBs, and international expansion in emerging markets, where Microsoft-centricity and low TCO are important. This product offers certified integration to Microsoft Dynamics AX.

•

Cautions
• • Although functionality is solid, this product is not targeted at highly complex facilities, and is not as broad or deep as the vendor's WM for Open Systems. WM for Windows represents a different technology and architectural direction (.NET) from the rest of the Manhattan Associates portfolio; therefore, support for SCE convergence, the vendor's BPP strategy or extension products is more challenging than with the flagship WM for Open Systems product. Although this product's .NET architecture nominally supports SOA technology, there is no plan to modernize the product along these lines.

•

Oracle (E-Business Suite WMS)
Strengths
• • • • • • This WMS offering has strong integration with the Oracle E-Business Suite (EBS), because it is part of the core data and process model of the EBS product. Consistent referenceability among moderately complex warehouses and increasingly complex warehouses are being added as references. There is a strong use of current-generation Oracle technology, such as rule engines and flex fields to simplify use. Oracle has a strong SCM vision for information-driven value chains, and this WMS product has strong integration with Oracle Transportation Management (OTM). Oracle has corporate financial strength and global reach. The vendor has a compelling vision for SCE convergence with process integration, and orchestration with transportation, manufacturing and product service, such as depot repair. This is a strong business intelligence offering, exploiting Oracle Business Intelligence Enterprise Edition (OBIEE).

•

Cautions
• Oracle is finalizing its plans and timing for a Fusion Applications version of Oracle WMS, so users may face more of a reimplementation than an upgrade; however, this will likely be several years in the future. The vendor has no market-leading functional depth, but it has an aggressive strategy for functional development. This product is not commonly an alternative for non-EBS users because a key benefit of EBS WMS is seamless integration with EBS ERP.

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Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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•

Oracle's WMS offering is not as broad as those of WMS leaders, and its value-added, "extended" WMS components are not yet mature or as proven, although the vendor is adding extended WMS capabilities, such as task planning, slotting, yard management and an auto-ID platform.

Oracle (Retail WMS)
Strengths
• • • • • Oracle offers a retail-focused WMS offering and development strategy . The product can be integrated with Oracle Retail, for customers that favor integration over specialization. Oracle has corporate financial strength and global reach. Retail WMS has some references in larger, more-complex facilities. This WMS offering leverages core Oracle technologies, such as the move to Oracle Fusion Middleware 10g.

Cautions
• • • This is a nondifferentiated WMS offering, with a small installed base. This WMS product is not a practical alternative for non-Oracle Retail users because a key benefit of Oracle Retail WMS is integration with Oracle Retail. This product lacks the breadth and depth of those of WMS leaders, and there is minimal support for value-added "extended" WMS components; Oracle is unlikely to invest in this area in the future. A difficult choice is presented for Oracle customers that use Oracle Retail and EBS components. This product is a tactical offering for Oracle Retail users that want some integrated WMS capabilities, rather than a strategic product for Oracle. The vendor will continue to support this offering, but users should not expect significant investment in expanding its depth and breadth, in line with EBS WMS. Although Oracle has stated that there are no plans to retire Retail WMS and converge warehouse management functionality with EBS WMS, in the long term (beyond two years), this will likely occur. Consequently, Gartner believes that Oracle Retail WMS customers will be faced with a substantial product migration in the future, and, therefore, we don't believe that this product has the longevity to become a leader in the market.

• •

•

RedPrairie (WM/D)
Strengths
• • WM/D offers functional strength and competitiveness in most major deals for complex warehouses. RedPrairie has a long track record of delivering WMS solutions for some of the mostcomplex warehouse operations, combining strong WMS products and services to support the needs of demanding clients.

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•

The vendor has a strong SCE convergence vision for retail-oriented and consumerpackaged-goods-oriented end-to-end supply chain strategies focused on linking supply chain operations to in-store activities and demand signals, but this remains unconventional and unproven at this point. RedPrairie offers strong delivery of related products, such as labor management, transportation and performance management. Notable support is provided for work order management supporting lightweight manufacturing execution activities. The vendor is making progress in consolidating its legacy DLX/P customer base on the WM/D product, which will yield deeper functionality as these more-complex /P customers migrate to and test the /D platform. Component-based architecture gives the product flexibility, but it is not an SOA stack or a business process management tool. The vendor's new platform strategy is based on Microsoft technologies.

• • •

• •

Cautions
• • The vendor's BPP strategy has not been fully developed, but it is working on it and plans to have a platform product sometime in 2009. RedPrairie has grown through acquisition, and now has a portfolio of products including multiple WMSs, some of which are relegated to a legacy support status, and others that are redundant to WM/D. RedPrairie is controlled by a private equity firm, which makes a change of company structure through an initial public offering or acquisition likely before 2012.

•

RedPrairie (WM/R)
Strengths
• • RedPrairie WM/R (formerly called Dispatcher) is a functionally robust and stable product for moderately complex warehouses. The vendor continues to win meaningful new business with this product, and continues to enhance the product's functional footprint to meet the vertical and geographic needs of the marketplace. For this WMS offering, RedPrairie has strong European presence and sales, implementation, and support, with local product development for Europe. The company continues to invest in adding functionality and updating the technical architecture of this offering.

• •

Cautions
• • This product is redundant to RedPrairie's flagship WM/D product, and likely does not represent the strategic WMS future for the company. Although RedPrairie continues to invest in this product, and it will continue to be an important offering in the vendor's portfolio, WM/R will not be positioned as the strategic foundation for RedPrairie's future; that will most likely be WM/D.
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Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

• •

RedPrairie is controlled by a private equity firm, which makes a change of company structure through an initial public offering or acquisition likely before 2012. During the past year, there have been resource issues and some difficulties staffing engagements, given the strong sales of this product. RedPrairie is working with its partner network and with system integrators to help build up its skills and alleviate some of this resource constraint.

SAP (ERP EWM)
Strengths
• In terms of total number of customers, SAP is the largest WMS vendor, with more than 5,000 SAP-reported live implementations (although most of these are minimally complex operations). ERP EWM (previously called LES and, later, ERP WM) offers seamless integration with SAP Business Suite, because the product is part of the Enterprise Central Component. The product features some use of SOA technologies, but it is not a model-driven application. The product takes advantage of SAP switch architecture to enable users to absorb discrete upgrades more rapidly based on enterprise need. SAP has corporate strength and global reach.

• • • •

Cautions
• Despite having a large user base, most of the customers are uncomplicated warehouses or heavily automated facilities where much of the complexity is controlled by materials handling systems; however, ERP EWM performs well in these situations. The product has limited functional depth and breadth, and offers minimal support for "extended" WMS components. Although SAP has added some extensions, such as cross-docking, yard management and value-added services, they are not yet mature or extensively deployed. The product's technical architecture doesn't provide zero-modification capabilities. The usability and management of this product are cumbersome, and some processes are rigid, which limits the ability to change functionality over time or to implement some core WMS functions. ERP EWM does not represent the strategic direction of WMS functionality for SAP, which is embodied in the stand-alone EWM product. ERP EWM customers will face a complete reimplementation to move to SCM EWM, which will be hard to justify in the current economic climate.

•

• •

• •

SAP (SCM EWM)
Strengths
• • SCM EWM represents the strategic direction of SAP's WMS vision and functionality. This product offers strong integration with SAP Business Suite.

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•

This product has robust functionality for complex warehouses, along with increasingly broad functionality, such as yard management, slotting, materials flow solutions and engineered labor standards. SCM EWM offers strong integration with SAP SCM components, and a strong vision for the future of supply chain and operations technology. The vendor has a compelling vision for SCE convergence, based on its e-SOA architecture that reaches beyond transportation, including process integration with areas such as manufacturing, order management, global trade, and environmental health and safety. SAP has corporate strength and global reach.

• •

•

Cautions
• • The product remains less proven, given the limited number of live customers. However, sales and implementations of this product have improved during the past 12 months. SAP has a very large installed base for its legacy WMS (ERP EWM, formally called "LES") and, although this product represents the future of WMS for SAP, users will face a reimplementation to move to this product, which is not a pressing need for most ERP EWM users. There have been some improvements in design over ERP EWM, but SCM EWM is still complex and is not a user-friendly product. SAP's performance management offering for WMS is nascent, but the vendor has a compelling vision for a broader supply chain performance management product, leveraging, in part, its acquisition of Business Objects.

• •

Sterling Commerce
Strengths
• • Sterling Commerce is a financially stable and viable business, although it has been unable to grow its SCM business. The vendor offers the strongest technology architecture in the WMS market, with implementations of model-driven business applications and Web-oriented architecture to enable agility and clarity of business processes. The vendor has solid references and stable functionality in all but the most complex warehouses. Sterling Commerce has not had bad experiences in complex facilities, but it lacks experience in this area. Sterling Commerce has a compelling vision for fulfillment-centric SCE convergence with complete, but not yet fully integrated, warehousing, transportation and order management suites.

•

•

Cautions
• The company has been unable to leverage its size to generate momentum in WMS, and its WMS sales and implementations lag behind its competitors.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Although its vision for SCE convergence is compelling, Sterling Commerce has yet to offer its solutions on a common platform, and it has no customers that are pursuing this vision. The vendor lacks a master data management strategy to support extensive process composition and dynamic processes. Sterling Commerce has yet to exploit a strategic relationship between its legacy EDI or transaction delivery network businesses and its supply chain software business, which could risk a strategic corporate change in focus. However, the company is crossleveraging some tools, such as a defined EDI interface, to its Gentran Integration Suite and the Sterling Collaborative Network (WebForms) to satisfy trading partner integration. The vendor is primarily focused on North American and U.K. implementations.

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RECOMMENDED READING
"Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market" "Client Issues for Using Business Process Platforms to Enable Business Process Agility, 2H05" "Development of Chaos-Tolerant Processes Is Key to Supply Chain Optimization" "Model-Driven Packaged Applications: Using SOA and BPM to Modernize Packaged Applications"

Vendors Added or Dropped
We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

Evaluation Criteria Definitions
Ability to Execute Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills, etc., whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria. Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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Sales Execution/Pricing: The vendor's capabilities in all pre-sales activities and the structure that supports them. This includes deal management, pricing and negotiation, pre-sales support and the overall effectiveness of the sales channel. Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message in order to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities. Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements, etc. Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Completeness of Vision Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision. Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the Web site, advertising, customer programs and positioning statements. Sales Strategy: The strategy for selling product that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements. Business Model: The soundness and logic of the vendor's underlying business proposition. Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals. Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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REGIONAL HEADQUARTERS
Corporate Headquarters 56 Top Gallant Road Stamford, CT 06902-7700 U.S.A. +1 203 964 0096 European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM +44 1784 431611 Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA +61 2 9459 4600 Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo 153-0042 JAPAN +81 3 3481 3670 Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, 12551 9° andar—World Trade Center 04578-903—São Paulo SP BRAZIL +55 11 3443 1509

Publication Date: 6 April 2009/ID Number: G00162718 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

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