IHL sees order management software spend doubling to $4.3 billion by 2029

IHL Group says global order management software spending will rise from $2.2 billion in 2024 to $4.3 billion by 2029, led by SaaS and cloud. The study also gives retailers a 10-question vendor checklist as AI, modular architecture and ethics become bigger selection factors.

Why it matters: - Order management systems are becoming a core retail operating system as AI, omnichannel fulfillment and inventory decisions get harder. - IHL Group says retailers that lack a strong OMS risk making faster bad decisions because AI depends on clean, centralized data. - The market shift favors SaaS and cloud models, while on-premise software and maintenance continue to shrink.

What happened: - IHL Group released its 2026 Order Management Systems Market Study as part of the IHL Retail Executive Advisory Program. - The study projects worldwide order management software spend will grow from $2.2 billion in 2024 to $4.3 billion by 2029. - SaaS and cloud spend is projected to rise from $1.4 billion in 2024 to $4.0 billion by 2029. - On-premise software spend is forecast to fall from $416 million in 2024 to $180 million in 2029. - On-premise maintenance is forecast to fall from $358 million to $170 million over the same period. - The report evaluates 18 enterprise vendors: Aptos, Blue Yonder, Deck Commerce, Deposco, Fluent Commerce, Fujitsu, IBM, Infios, Jesta IS, KBRW, Kibo Commerce, OneStock, OneView Commerce, Oracle, Planet, Salesforce, SAP and Teamwork Commerce. - Insight Market View positioning maps cover the overall market, general merchandise and softlines, and food, drug, convenience and mass retail.

The details: - The spend figures come from IHL's WorldView IT sizing and forecast model. - Greg Buzek, president of IHL Group, said the OMS is the "single version of the truth" for top-performing retailers. - The executive summary identifies five market trends: AI-driven operational intelligence, modular API-first architectures, business user empowerment and low/no-code configuration, support for complex commerce models spanning B2B, B2C and hybrid B2B2C, and ethical and transparent AI. - The study says AI has moved from experimental use to mainstream deployment and is now part of competitive differentiation in fulfillment, predictive scenarios, tariff and cost modeling, inventory segmentation and related operating decisions. - The study includes Retailer Key OMS Selection Questions, a 10-question checklist for vendor shortlists. - The checklist covers shipping optimization explainability, AI/ML roadmap maturity, business-user adaptability, omnichannel journey depth, peak-scale performance, roadmap commitments, integration speed, sustainability and AI ethics, tariff impact on fulfillment and returns, and recent client-proven results. - Jerry Sheldon, vice president of technology, and Lee Holman, lead retail analyst, authored the study. - IHL says the source manuscript is dated September 2025 in its research vault, while the public product title for this release is the 2026 Order Management Systems Market Study.

Between the lines: - The report is not just sizing the market; it is signaling what buyers will likely value most in vendor selection. - The emphasis on API-first design, low-code tools and business-user control suggests OMS buying decisions are shifting beyond technical fit. - Ethical AI, sustainability and tariff impact point to retail technology procurement becoming more operational and compliance-focused. - The vendor list shows a crowded field with both legacy enterprise software players and newer commerce specialists competing for the same budgets.

What's next: - Retailers are likely to use the study's selection questions as a screening tool for OMS shortlists. - Vendors will need to show AI readiness, integration speed and proven results to stand out as spending shifts toward cloud-based systems. - IHL's market view will continue to serve as a benchmark for tracking which OMS capabilities matter most as AI adoption expands.

The bottom line: - IHL's latest forecast points to a growing OMS market, a shrinking on-premise segment and a more demanding buying process centered on AI, flexibility and proof of performance. - The full report is available here.