These continued investments in functionality, and a growing acceptance of cloud-based solutions servicing the commodities markets, has provided Eka with a significant number of new clients for the product in 2016 with 11 announced new deals, spanning a number of commodities and industries, but including agricultural commodities and products, energies, and metals. Additionally, ComTech has observed growing interest in a comprehensive risk overlay as an architectural CTRM component across many parts of the industry. Eka’ s timing has been very good, introducing a product into an area of growing interest and demand and without significant competition.
InSight CM Eka’ s 2016 performance was solid especially when taking into consideration the general economic conditions across the commodity sector. It announced a number of new CTRM license sales in the agricultural space in calendar year 2016, including Canadian ag concerns Broadgrain and Providence Grain, CJ International in Asia, Cremer in Germany, and others at a time when demand in ags & softs trailed expectations 1 under difficult market conditions in the sector. Eka does appear to continue to compete well across the agricultural space( and particularly in the grains area), with company management noting that“ four out of the top five agricultural traders are Eka customers, including Bunge, Cargill, Glencore, and Louis Dreyfus.” Additionally, its strong market presence in the agricultural space has allowed it to leverage a large client base in which to cross sell the Commodity Analytics Cloud solution.
Other notable new license sales in 2016 included Progress Energy, a Canadian based energy producer. Following the acquisition of EnCompass in April 2013, Eka has made obvious investments in the product to expand its commodity scope and market reach. According to the company, Eka ' s InSight CM ® platform for energy has seen growing momentum, with additional sales in the US and Canada. Although Eka notes they have added European functionality since the acquisition, the energy solution has not yet been licensed outside of North America.
Corporate Developments Despite a difficult year for technology sales in the commodity space, Eka’ s continues to exhibit growth opening three new offices to accommodate its rapidly expanding business, adding locations in Canada, the United States, and Europe. Headcount grew over 19 percent globally and will continue to grow with another office opening in the Americas in the first quarter.
Importantly, staff additions included four new executive level positions, with Colin Cooper named Eka’ s vice president of EMEA to manage Eka’ s expansion in the EMEA; Sudhir Anandarao was appointed chief operating officer, analytics to oversee development of Eka’ s analytics solutions; Sanjay Singla became Eka’ s general manager, CTRM to manage sales and support of Eka’ s commodity trading and risk management solution; and long-term industry veteran, Sebastian Esposito joined the company in early 2017 to oversee sales for their products in North America. The company continues to strengthen its management team bringing in experienced and knowledgeable staff to support its plans for growth.
Outlook and Analysis
While the global markets for CTRM and CM products have been difficult for more than 2 years, with persistent low commodity prices negatively impacting a broad spectrum of market participants, Eka’ s results in 2016 suggest that the company has momentum across the space. During a period of slower growth generally, Eka’ s results are quite impressive and contrast sharply with those of competitors such as Triple Point, for example. With its InSight CM platform selling well and the rapid market adoption of the Commodity Analytics Cloud product, Eka does appear to be closing new business at a rate that places them in the top tier of the market for CTRM / CM vendors. Eka’ s ability to innovate, as evidenced with its adoption of cloud technologies and models for deploying enterprise-level analytics suites( including“ big data” capabilities) and CM solutions, has positioned Eka strongly for continued success.
With the cloud in mind, ComTech continues to see growing acceptance of cloud delivered product and services across all market regions and segments. While the US markets have traditionally lagged Europe in terms of cloud adoption in CTRM and CM, recent ComTech research indicates this is changing rapidly and we expect the growth in demand for cloud solutions to significantly outstrip that of on-premises installations. Eka is one of the vendors in the space that has truly cloud-enabled products and it will benefit from this trend accordingly. There may well be the beginnings of a major technology shift occurring related to cloud deployment in which, should it occur, Eka will be strongly positioned. In fact, Eka recently announced that“ 75 % of its new customers are choosing the cloud based solution.”
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2016 ComTech CTRM Market Sizing Update © Commodity Technology Advisory llc February 2017 2