White Papers Evolving CTRM in the Cloud | Page 4

Evolving CTRM in the Cloud

sometimes manage those services will be increasingly mooted. Not only might this help defray IT costs, but it might help
businesses gain more efficiencies too as they procure best of
breed business and/or IT services. Business agility and flexibility may be improved under such models as well.

Integration is also cited as a concern but even there
cloud brokering with standard pluggable adaptors is rapidly
emerging that holds much promising in not just quieting the
criticism but also enabling increased flexibility. Areas such as
analytics, trade confirmation, regulatory reporting, and market
data can be procured as services to build composite solutions
that deliver.

Today, the vast majority of CTRM deployed in the
cloud is almost certainly essentially single-tenanted in the
private cloud. About 80% of the respondents would consider cloud deployment as a viable option. However, the study
strongly suggested that multi-tenanted deployments in the
public cloud were seen as more risky and less acceptable to
management. Despite that, ComTech has observed a small
but growing minority of largely smaller firms opting for such a
model simply due to its relative low cost and ease of entry.

The sheer complexity of many trading operations and
the speed at which the industry changes seemed to ComTech
to continue to work against the true multi-tenanted cloud deployment model for now in the broader context, although over
time, this may change. Several CTRM vendors can and do offer true multi-tenanted SaaS in the cloud options but appear to
have had no or very low uptake to date. Instead, in the short to
medium term, we see strong potential for hosted in the cloud
(public and/or private) deployment approach and flavors of
that model. We see a good future for E/CTRM in the Cloud

A ComTechAdvisory Whitepaper

but still think that true multi-tenanted SaaS will be limited to
lower complexity, smaller, single commodity traders or those
who are predominantly financial commodity traders in the foreseeable future.

In the end, the decision to use CTRM in the cloud will
be based on the balance of speed, risk and cost. For example,
a start up business may find it more cost effective and faster
to start out in a multi-tenanted cloud environment hosted and
serviced by a vendor but, as the business grows and evolves,
migrate to a private cloud solution hosted and serviced primarily by internal IT. In other words, it is not a binary decision in the
same way that implementing on premises can be, but a route
that provides plenty of flexibility and optionality down the road
too.

As ComTech looks into its crystal ball, we do foresee
greater adoption of the cloud in all aspects of trader’s and commodity firm’s businesses simply as a result of the increased
broader acceptance of the model combined with costs and
flexibility. At what point does the cost of everything in house
exceed the risk of cloud deployment? We see those scales tipping quite quickly and while the cloud is not and never will be
a panacea, we see it as the logical next step in the evolution of
CTRM software.

Interestingly enough, we do see the vendors adopting
the same approach and for the same reasons. For the vendor,
the cloud model delivers increased agility, flexibility and reduced costs too but, and perhaps more importantly, it delivers
a predictable revenue stream that allows them to better manage their businesses. It also offers another area for innovation
and differentiation in terms of bundled service and product development that must surely be good for the industry too?

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