MERCHANDISER
Results of Non-Energy CTRM Study
PERIODICALLY, COMMODITYPOINT undertakes vendor perception studies to assess the current nature of the Commodity Trading & Risk Management (CTRM) software landscape and user perceptions of the vendors and products. The last such study was released in 2009 for the energy CTRM software space. This year, we undertook a similar study with an important difference – we sought input on CTRM software vendors and products serving the broader commodities space excluding energy. The study was kindly sponsored by Allegro Development, Brady PLC, Navita, Tradepaq and SolArc. The study report is now complete and will be released shortly.
Comparison of Unprompted & Prompted Name Recognition
between commodities have also been created. Most traders now trade a greater number of commodities and have more diverse portfolios. The vendor landscape has been impacted by these same
trends as vendors have sought to cross from commodity to commodity, either through platform extension or M&A. Some vendors have been successful at developing this multi- commodity capability, while others have remained somewhat statically focused on their traditional market; meaning that there are in fact numerous vendors serving the space.
Summary of Some Results Our survey suggests that two vendors, OpenLink Financial
(OLF) and Triple Point Technology, are reasonably well known and lead in many of the categories that we measured. However, neither has yet made a total breakthrough in terms of being a “household” name across the CTRM space. A second group of vendors, including Allegro, Brady PLC, Eka, Tradepaq and others, are reasonably to strongly well known in certain segments and niches of the CTRM space. They are emerging brands that could challenge OLF and Triple Point for leadership in the next year or so. Other vendors appear to be known only in particular niches and/or locations. As the sample is almost wholly reflective of the replacement
Source: CommodityPoint
Background The non-energy CTRM vendor perception study proved to
be an arduous undertaking with very low initial response rates which meant that the surveying component took considerably longer than anticipated. In the end, the survey comprised of 49 valid responses from a geographically diverse group of respondents. The sample has a bias towards physical traders of agricultural products and also a bias towards companies already using CTRM software (the replacement market). Nonetheless, it provides some important data about the CTRM software market outside of energy. Among our findings is that the CTRM software space outside of energy remains broadly immature and very heterogeneous. The study report discusses these findings in detail and provides much evidence to support the conclusion that, historically, the CTRM software space has evolved from a set of commodity-specific and often geographically constrained markets with a number of specialist suppliers providing commercial software in each niche and geography. In recent years, a plethora of changes in commodity
markets including increased ease of access for new traders, the entrance of speculators, evolving supply/demand dynamics and so on, have created significantly more interest in trading commodities. Indeed, new commodities have emerged such as CO2 and freight rates while many new relationships
18 December 2010
market, very low future procurement rates are indicated. However, buying activity is strong and can be observed in our historical procurement trend data presented in the study results. Installed bases overall in the sample are dominated by OLF and Triple Point, but the study also shows segmentation with different vendors having some installed base dominance in different industry segments. Finally, the report provides some information about buying
criteria, where buyers go to learn about vendors and their commercial software offerings.
... the CTRM software space
outside of energy remains broadly immature and very heterogeneous
In conclusion, the study suggests a heterogeneous and
somewhat immature set of software markets that are moving rapidly towards increased homogeneity as software providers aggressively pursue additional footholds in those markets through increased M&A activities or internal development of additional capabilities. CommodityPoint suggests that, unless there is some market disruption due to unforeseen events, this emergent homogeneous market for CTRM software will, in the short to medium term, be served by 3-4 dominant vendors and a number of niche, local specialists.
By Gary M. Vasey, Ph.D., MD, Europe and AsiaPac, and Patrick Reames, MD, The Americas
The final study report will be released shortly and will be available as a free download from
UtiliPoint.com and
www.CTRMblog.com
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