INTRODUCTION
Commodity Technology Advisory ( ComTech ) has been tracking the rise of ETRM solutions delivered in the cloud over many years 1 . While the potential benefits and cost savings associated with ETRM in the cloud have always appeared to be robust , uptake across the industry has proven to be quite slow until relatively recently . Although many other industries migrated to the cost efficiencies of the cloud , the energy industry lagged behind . The key concern quoted by the industry was usually data security 2 , despite companies often having back-up and recovery procedures in place that result in trade and position data being stored off-site . Then , commodity prices collapsed generally , led by energy , and costs began to rise inexorably as new regulations progressively came into force . Margins were squeezed and structural changes have occurred across the industry so that profitable trades are a good deal harder to find .
While ETRM and other IT initiatives were put on hold or scaled back to reduce costs , rapid market changes necessitated ETRM functional changes – compelling energy companies to seek more cost effective ways to procure the right ETRM platform . As their ETRM and related solutions have quickly become outdated , these systems are effectively deadweight - holding those businesses back from responding to change and streamlining business processes . In this environment , ETRM in the cloud 3 has become a popular alternative to “ traditional ” on-premises software given its low cost of entry , potential lower total cost of ownership and promise of cheaper maintenance and upgrades . Confirming this trend , a recent survey conducted by ComTech looking at trends in a lower energy price environment 3 found that around 30 % of surveyed European energy traders had an increased urgency to upgrade or replace their current ETRM , and that almost 50 % would consider ETRM in the cloud as a way forward .
1 . CTRM In The Cloud , Commodity Technology Report , January 2014 and other research reports 2 . As above 3 . ETRM in a Low Commodity Price Environment , Commodity Technology Advisory Report , 2016
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