London, 25 March 2011

CommodityPoint: In the run up to starting CommodityPoint's new CTRM Global Market Sizing study and report, we've complied a listing of every license deal for CTRM applications announced in 2010. Plainly, most deals do not get announced and some vendors never announce anything, so we will be the first to say that the data does not necessarily reflect a truly accurate picture of the events in 2010. Nonetheless, it is interesting to do a little analysis on the data and see what light can be shed on the wider market from that analysis.

CommodityPoint is tracking around 80 CTRM vendors and products, but only about one third of these vendors made any announcements in 2010. We tabulated some 76 license deals across the space globally, and it should be noted that the majority of these were new license deals for a fully-fledged CTRM solution. Of those 76 deals, some 47 (62 percent) were for energy commodities only (either a single commodity such as natural gas, or multiple commodities such as natural gas and power) and 22 deals were for multiple Commodity Groups (i.e., they included energy, agriculturals, and/or metals).

The distribution of the deals is quite interesting. Figure 1 shows a graphical representation of where the licenses were located, though it should also be understood that many deals were actually for implementation in multiple geographical regions. Firstly, the number of license deals announced for Europe was actually higher than for North America and secondly, the number of deals announced in Asia-Pacific was also significant. Whether this data is proportionally representative of the true market is certainly up for discussion, but the trends do fall in line with our previous observations that the European CTRM software markets do appear to be growing faster than their more mature North American counterparts, and the Asia-Pacific region has begun show a more year-to-year consistency in terms of software acquisition and is becoming a more important market for vendors.

Figure 1: Geographical Location of Announced Deals

Another interesting way to look at the data is by commodity coverage. Figure 2 shows the commodities covered by the announced license deal (Note: a single deal can cover multiple commodities and would be reflected multiple times—one for each commodity). Energy deals remain the majority, but there was also quite a bit of activity in the shipping and freight market in 2010 while announced deals in Ags and Metals were actually very low.

Figure 2: Deals by Commodity

Figure 3 shows announced deals by commodity and geographic location, suggesting that energy remains a major part of the CTRM software market in North America and Europe, while deals for metals applications were common in Asia.

Figure 3: Deals by Geography and Commodity

But does this data really tell us very much? Taken on its own merits, no. "Announced deals" are not, in themselves, a good indicator from which to derive market metrics. However, we do know from our conversations with most of the CTRM product vendors that the trends expressed by these announcements are reasonably accurate. In particular, we are seeing quite clearly that energy remains the largest CTRM market by quite a distance and that Europe is fast catching up with North America in market maturity terms. We have also seen the emergence of Asia-Pacific region as more reliable and fairly significant market for CTRM software; whereas South America and Africa remain highly immature and very lumpy in terms of annual license deals.

Reviewing announced CTRM deals can be somewhat informative, and while that information can factor into creating as accurate a picture as possible of the size of the global CTRM market place, the effort to complete a market size report is far greater and more involved; and if all goes as expected, we should have that exercise complete within the next few weeks.

Ends --

By Gary M. Vasey, Ph.D., Managing Director, Europe and AsiaPac, and Patrick Reames, Managing Director, The Americas

http://commodity-point.com