Product Service Management Market Will Near $2 Billion by 2008 Per ARC Advisory Group's New Market Research Study.

Business Editors

DEDHAM, Mass.--(BUSINESS WIRE)--Feb. 20, 2003

The Product Service Management (PSM) market, which encompasses a broad range of enterprise solutions for product service organizations and which totaled more than $650 million in 2002, will more than triple to almost $2 billion by the end of 2007, representing a Cumulative Annual Growth Rate (CAGR) of almost 25 percent over this forecast period, according to a new study by the ARC Advisory Group.

Growth Despite the Economy

"With worldwide economies struggling, manufacturers are facing increasingly challenging markets for their products," according to ARC Vice President Sid Snitkin ([e-mail]), the author of ARC's Product Service Management Software & Services Worldwide Outlook. "After-market service and parts is rapidly becoming the focus for both revenue growth and for gaining competitive advantage in product sales. Technology is vital to these strategies and companies are recognizing that their prior lack of investment in this sector has left them unable to effectively execute expanded aftermarket programs."

"The PSM market is poised for a 'perfect storm'," says Snitkin. "The combination of real pent up needs, manufacturer shifts to product service-based growth strategies, and increased outsourcing by asset owners/operators will create an imperative for these solutions. Global economic malaise, lack of confidence in the future, and lack of funds for new projects continue to be key factors inhibiting adoption of many enterprise solutions. But we believe that the power of the 'perfect storm' driving PSM adoption will be strong enough to burst the purse strings of even the most miserly CFO."

The study addresses the PSM market as the integration of a broad range of software solutions to manage the full spectrum of aftermarket service activities. In particular, six solution segments are identified and analyzed, including Customer Support Management, Field Service Management, Depot & Repair Center Management, Field Workforce Optimization, Parts Inventory Optimization, and Service Information Optimization.

After-sales service is sold in a multitude of ways such as extended warranties, guaranteed response service agreements, and on an as-needed, pay-per-call basis. After-sales service also covers a broad range of activities including installation support, support for product use and maintenance, spare parts, field service, and repair center/depot management. Managing these processes is complex and requires the integration of technology from several different enterprise software arenas including:

-- Customer Relationship Management (CRM)

-- Enterprise Resource Planning (ERP)

-- Product Lifecycle Management (PLM)

-- Supply Chain Management (SCM)

-- Supply Chain Execution (SCE)

-- Enterprise Asset Management (EAM)

Note to Editors: This document can be used with attribution to ARC Advisory Group. For a graphic containing 'PSM Software & Services Market in Millions of $", please contact Maryanne Flynn at mailto:[e-mail].

ARC Advisory Group provides strategic planning and technology assessment services to leading manufacturing companies, utilities, and global logistics providers, as well as to software and solution suppliers world-wide. From Global 1000 companies to small start-up firms, ARC has the strategic knowledge needed to succeed in today's technology driven economy. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax [phone], E-mail [e-mail], Web ARCweb.com.