CommodityPoint has just completed its TRM Vendor Perceptions Study and issued the final study report. The study, kindly sponsored by Navita Systems AG and Solarc Inc., measured market participants'
perceptions of the vendors in the TRM space using an online survey instrument backed up by independent secondary research and analysis across a broad set of different criteria. For the first time, CommodityPoint asked for perceptions of market leadership by functionality, commodity coverage and industry segment as well as looking at unprompted and prompted vendor brand recognition.

The TRM Vendor Perception study was undertaken primarily via a web delivered survey instrument developed specifically for the study. The survey received 72 responses but 10 were eliminated due to incompleteness, invalid email addresses and contact names or they originated from a vendor in the space. The survey was conducted between mid-January and the end of April, 2009 using both HTML email pushes along with researcher calls to likely candidates.

Demographics

Of the 62 responses considered in our analysis, 65 percent originated with respondents based in North America, 27 percent with respondents based in Europe and 8 percent from respondents based in other regions (Figure 1). For that reason, the results are often presented in total as well as for North America and Europe separately.

The respondents represented a good mix of industry sectors with utilities being the most represented segment (Figure 2). The survey allowed consultants and systems integrators to participate as their experiences provide them broad view of multiple vendors and systems.
This group was the second most represented among the respondents. Energy merchants, producers, retailers, financial funds, banks and generators were also well represented along with refiner/marketers and agricultural trading firms. In general there was a more diverse mix of respondents based in North America (Figures 3 & 4) than Europe where utilities and consultants dominated; however, there were proportionally more hedge funds represented in Europe and the agricultural traders were all based in Europe.

border=0>

border=0>

Findings Summary

The survey indicates that the TRM software market landscape is becoming increasingly dominated by a group of transnational vendors and products that includes OpenLink Financial (OLF), Triple Point Technology, SunGard Energy, Allegro Development, SolArc and Ventyx. Other vendors have a high degree of importance in particular geographies (for example Navita in Europe and OATI in North America) or in particular industry segments (e.g., TradeCapture in Crude Oil and other segments, Abacus Solutions in the Generation segment and so on). In terms of brand recognition, this smaller group of more dominant vendors is increasingly well known.

In general, the survey indicates that the market for TRM systems has matured over the last several years as users and prospective buyers are familiar with a broader range of vendors than at any time in the past.
At the same time, there appears to be broader consensus about which vendors lead the market overall as the group of vendors mentioned by respondents as overall market leader has grown smaller and those vendors mentioned have mostly increased their perception as overall market leader. Despite that, for many segments of the industry or for specific areas of functional coverage there is remains some confusion and disagreement over market leadership.

CommodityPoint, having conducted similar studies over the last several years, has utilized the results from those efforts to place the current results in a historical perspective. This analysis provides insight into movement amongst vendors in terms of both overall brand recognition and perceptions around market leadership—particularly in Europe. OLF and Triple Point have both made gains while others, like SunGard Energy, have seen some erosion by comparison. Other vendors such as SolArc, Navita, OATI and others continue to emerge with greater brand strength and awareness. Ventyx, which has made several acquisitions over the last year or so, appears to suffer from some brand confusion as a result, but may well emerge as a market leader, particularly in the utility segment, as its acquisitions are consolidated.

In general, this survey shows continued maturing of the software category and consolidation of market perceptions of leadership around the major vendors; however, it also continues to demonstrate that the various flavors of TRM solutions required across the commodities space means that there is still a demand for regional and segment specialist solutions.

Are Users Entirely Happy With Their Current Installed Solutions?

As has been observed in many similar surveys that CommodityPoint has undertaken, while some 16 percent of respondents indicate that they are “very satisfied” with their installed solutions, the response distribution indicates that many users are less than fully satisfied with their current system (Figure 5), including a minority who declare themselves to be unsatisfied with their current solutions.

border=0>

This significant level of less than satisfied users is reflected in the fact that 34 percent of the respondents stated that they would procure new TRM software over the next 24-months.

Summary

The results of the survey as analyzed and interpreted by CommodityPoint, and taking into account previous research studies, suggest the following;

1. The top four-to-six vendors (who tend to be broad transnational
   players) have continued to consolidate their position in terms of brand awareness. While there continues to be movement between these vendors (with perhaps Triple Point and Solarc improving their overall brand awareness at the expense of other vendors), they continue to enjoy widespread brand recognition.

2. At the same time, the perception of OLF as overall market leader appears to have strengthened.
3. Despite that, when it comes to views on market leadership across particular functions, features and industry segments, there is much less clarity. While the same top four-to-six are still commonly mentioned in certain, more mature industry segments and functions, these vendors also seem to be benefiting from brand loyalty in other segments.
4. OLF's strength remains tied to its brand recognition and reputation in Europe where it appears to continue to enjoy a significant lead on its competitors. In North America, a broader set of vendors are viewed as equally important. OLF's European brand strength may be in part due to its success at widely known large European energy firms but it could also be due to the relative importance of third party experts in the selection process. Past surveys have shown that European buyers place more importance on consultants and systems integrators in the procurement process.
5. Below the top four-to-six vendors, others enjoy perceptions of market leadership in certain geographies or industry segments, such as OATI in the North American power markets, demonstrating the sheer complexity of the industry and its requirements.

To us, these findings suggest increased maturity of TRM software markets while continuing to highlight the difference in relative maturity between North America and Europe (with the European markets are less mature).

It should also be noted that vendor perceptions are simply that—perceptions. As such they can and do change through time and they are lagging rather than leading indicators. Buyers should always conduct a thorough and comprehensive review of potential solutions providers, including the newer and emerging suppliers.

Finally, the survey also appears to indicate that the TRM software category remains vibrant with a higher than usual replacement rate.
Despite a global recession induced lull over the last six to nine months, demand for new solutions is increasing as commodities prices start to firm-up and some level of confidence returns to the global TRM markets.

Note: The report, 2009 TRM Vendor Perceptions Study may be purchased at the CommodityPoint online store at www.commoditypointstore.com >.