Research ETRM / CTRM in the Cloud | Page 7

CTRM in the Cloud Finally, the study also suggested that most of the respondents (and perhaps reflective of the industry at large) were largely unaware of which software vendors actually offered SaaS solutions, hinting perhaps that lack of familiarity with those vendors and the SaaS model in general was also dampening broader demand. However, since 2010, much has changed in energy and commodities trading industries. There has been a general and pervasive increase in rules and regulations - so much so that some banks have exited the business altogether, significantly curtailed their commodity trading activities or have shifted the emphasis of those trading activities to Asia. There has been a more or less continual global recession, with Europe being particularly hard it, which has had an impact on technology expenditures and budgets across the board, at the very time when regulatory compliance costs have increased. On the other hand, there has been something of a boom in Asia, and in agricultural and soft commodities markets in terms of trading and supply chain management, necessitating increased investment in CTRM and CTRM-related solutions. Overall, increased cost pressures and declining margins; combined with a continual need to add and improve functionality (particularly in the areas of risk management and regulatory compliance) has exerted downward pressure on software license and implementation costs in some markets. Meanwhile, the general popularity of SaaS software, and the lower total cost of ownership (TCO) of such solutions, has caught the attention of many IT leaders in the commodities trading industry. Numerous vendors have progressively worked to migrate their software architecture to service oriented architectures with webenabled user interfaces; while a number of start-up vendors have adopted these newer technologies and the SaaS model from inception. Though almost every vendor of CTRM software will provide either non-traditional or on premises licensing of its E/CTRM software if asked, few, can actually deliver a true SaaS s