ComTech Analyst Briefing Note of EKA

Though a relatively new entrant into Commodity Trading and Risk Management (CTRM) markets, Eka has found considerable success in selling products to a global base of users across multiple categories, including agriculturals, softs, metals, consumer products and most recently, energy. Founded in 2004, its’ initial successes were primarily in the Asia-Pacific markets; however, with success in servicing a growing roster of global-scale clients, its’ market reach now extends to include Europe, Africa, and North America.

In 2008, Eka established its’ Americas headquarters in Norwalk CT and has continued to add executive, product management, sales and delivery staff in that location. The company maintains their primary software development center in Bangalore and has development centers in Canada, the US and Australia.

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ETRM / CTRM in the Cloud – Research Report

The data generated by our survey of the industry suggests that, in general, Energy and/or Commodity Trading and Risk Management (E/CTRM) buyers are increasingly open to considering alternatives to traditional “on- premises” implementation models including both SaaS and hosted in the cloud delivery. While a small, but committed, minority continue to resist anything but the traditional on-premises implementation approach, the overwhelming majority of respondents will consider SaaS/hosted in the cloud for a variety of vertical application areas in and around commodity trading.

Despite that finding, only 16% of those who responded to the survey actually utilize a SaaS or hosted in the cloud E/CTRM solution, and while the data strongly suggests a great deal of interest in the cloud for E/CTRM, it does indicate that the final procurement decision isn’t necessarily a slam-dunk in favor of the cloud. Though 54% of our respondents would consider a SaaS/hosted in the cloud alternative, there are indications that the final decision is still more likely to lean toward a traditional installation on-premises – at least for now. ComTech’s forecast growth rates of 15% per year for SaaS/hosted in the cloud solutions do seem to be reasonable but may accelerate in the future if a sufficient numbers of trading firms adopt the model, are successful with it and are willing to advocate the approach to their peers in the industry. Overall, this finding is in agreement with broader studies such as those conducted by Gartner that found that interest in cloud-based solutions is primarily in horizontal applications such as accounting, HR or billing; and that as a result of buyer concerns around integration and ability to customize, the uptake of cloud-based vertical applications like CTRM lags somewhat.

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Consumer Product Companies Smart Commodity Management

Rapid global population growth combined with increasing urbanization is driving demand for raw materials of all kinds. By 2030, it is estimated that there will be 1.4 billion middle class consumers in China compared to 365 million in the US and 414 million in Europe1, placing increasing strains on the supply and distribution of raw materials and finished products. For the last five or more years, commodity and raw material prices have been extremely volatile, in part due to supply/demand tightness, and this paradigm is one that is set to continue in to the future. For consumer product companies, these facts represent a significant challenge and risk to their businesses.

Consumer product companies, faced with volatile raw material and energy costs on one side, and price conscious customers willing to shop around on the other, have sought ways to minimize these risks. They have stripped costs and inefficiencies from their supply chains and businesses and, in some instances, radically overhauled the way in which they manage the procurement and planning functions in favor of a commodity management approach. Commodity management means approaching price exposure more like a trader tracking price movements, utilizing hedging and other risk mitigation tools and measuring performance against market as opposed to budget or forecast. Some companies have deployed commodity management software, fully integrated with their ERP and other systems, to manage supply chain price exposure.

Download it here Consumer Product Companies Smart Commodity Management

2013 CTRM Global Market Size

ComTech Advisory estimates the value of the global market for vendor-supplied CTRM applications in 2012 was $938 million. We believe the market in 2013 will show only a slight increase over 2012, with total estimated vendor revenues of $976 million. Including the value of associated 3rd party services revenues, ComTech believes the global market for CTRM products was $1.56 billion in 2012 and we estimate the results in 2013 will be $1.6 billion.

Download it here 2013 CTRM Global Market Size

Next Generation CTRM

Commodity markets may well now be at an important crossroads in their evolution. Always risky and intricate, trading, procuring and/or selling commodities, is increasingly more complex and becoming even riskier. For those engaged in commodity markets, there has always been a need for flexible and configurable CTRM software to cater for the rapidly changing nature of the business. Unfortunately, most traditionally implemented on premise CTRM software solutions are suboptimal in terms of keeping current with new business challenges. Often the solution also carries a high cost of ownership as this traditional development model can mean months, if not years, between the emergence of a new requirement and the delivery of the matching functionality. New models are now emerging that utilizes the Cloud from new vendors who, familiar with such issues, have innovated different approaches that hold much promise for users.

Download it here Next Generation CTRM

CTRM Value Survey and Anaysis

The environment of physical energy and non-energy commodity trading and marketing has grown increasingly complex, marked by globalization bringing about rapid changes in supply and demand patterns, increased regulatory scrutiny and evolving trading and reporting rules, volatility along the entirety of the physical supply chain, and increasing uncertainty as to future price movements.

Download it here CTRM Value Survey and Anaysis

European Commodity Market Regulations part 2

A component of the European Regulatory study conducted by ComTech advisory and ETR Advisory was to survey the market regarding overall preparedness for the regulations. The following report outlines the results of that survey providing analysis and discussion of those results. It should be read in conjunction with Part 1 of our study

Download it here European Commodity Market Regulations part 2