Reports Disruptive Technologies in Commodity Trading | Page 10

Disruptive Technologies in Commodity Trading Markets
A ComTechAdvisory Report
Cloud and Software as a Service
Despite initial resistance in the industry to the cloud
and cloud deployment, we now see cloud and soft-
ware as a service (SaaS) adoption growing rapidly
in all geographies and across all segments of the in-
dustry - though perhaps led by the Asia-Pacific and
European regions. A few vendors such as Aspect and
OATI for example, have championed cloud-delivered
CTRM for more than a decade, only to have been
joined by a host of newer solution providers over the
last 5-years or so, seeking to take advantage of the
low and lower mid-tiers of the market - the 1-20 user
customers that have typically comprised the bulk of
the cloud-based CTRM market. However, with the
announcement by industry leader OpenLink in the
spring of 2017 3 that they were re-architecting their
Endur product to run in the public cloud, cloud deliv-
ered CTRM has now reached the top tiers of the mar-
ket as well. Now, virtually all vendors offer a ‘cloud’
variant of their software as well, though many are
“hosted in the cloud”.
The term “hosted in the cloud” does point to an is-
sue with cloud with respect to its definition. A recent
CTRMRadio podcast 4 examined this issue in some
depth and it did seem as if there were a level of agree-
ment amongst the panelists we spoke with that cloud
ought to mean cloud native software delivered in a
multi-tenanted manner…essentially SaaS; however,
much of the current ‘cloud’ CTRM deployments are
in fact single tenanted hosted in the cloud solutions.
While there are plainly advantages to each approach
3
4
(multi-tenanted vs. single), the highest level of bene-
fits of cloud (lower costs and seamless upgrades for
example) can likely only be gained from a cloud-na-
tive solution delivered via multi-tenanted software.
Despite this somewhat technical discussion, the fact
is that the cloud deployment of CTRM solutions has
forever changed the licensing models of the software
- and the vendor’s revenue models - as most new
deals are based on periodic usage fees as opposed
to perpetual license fees that were once the rule.
ComTech expects licensing revenues from all types
of cloud deployments of CTRM and related software
to grow at a rate of 10-15% over the next several
years, outpacing the overall growth rate of spending
for the category at 3-4%. This movement to the cloud
is, in itself, a disruptive impact on the CTRM software
space as it provides an entry point for smaller firms
to procure a commercial CTRM solution for the first
time on a relatively cost-effective basis. As these
smaller firms will seek out the lowest price options
available, we anticipate, at least in the short-term,
some erosion of market share from the top vendors
to the cloud-native solutions from younger, smaller
vendors that have developed their solutions as cloud
capable from the ground-up.
Again, the survey data unsurprisingly shows that
cloud/SaaS is an important investment area in the
short-term and is regarded as having the most impact
(Figure 1 & 2) by the respondents.
https://www.ctrmcenter.com/blog/vendor-news-blog/openlink-rolls-cloud-strategy/
https://www.ctrmcenter.com/media/podcasts/ctrmradio-edition-2-ctrm-in-the-cloud/
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