An ETRM vendor you may not know – EMK3
As you may know, at ComTech we track more than 80 vendors of ETRM / CTRM technology around the globe. While many are well-known names in the industry, those serving the top global commodity traders, there are a number that have established themselves in a niche and have, for a number of reasons, remained there despite being in business for 10 or more years. One such company is Dallas-based EMK3, who despite having an enviable list of mid and large-sized E&P and midstream customers, is probably an unfamiliar name to most outside of the US producer and midstream markets. I meet with Terry Coulter, EMK3’s VP of biz dev and sales, and director of sales, Alex Montez, this afternoon to catch-up with the company and the market.
As noted by Terry, in the more than a decade that they’ve been in business, they have forged a very nice business by maintaining a laser focus on their chosen markets (marketing, transportation, and midstream operations for exploration and production companies, marketers, first purchasers, gathering and pipeline operators, and gas plant operators), and have avoided the lure of what might be transient opportunities outside of that core business. For example, Terry notes that while they continually see opportunity in growing a larger consulting staff to provide additional services outside of the initial implementation of their products, they have been steadfast in maintaining their current business model…implementations of their flagship product, EMK3 Senergy, are purposely limited to installation, connections of standard interfaces, data loading and data configuration; all in partnership with their customers…anything outside of that, such as non-standard interfaces, is done either by the customers themselves or 3rd party consultants brought in by that customer.
Though they may leave money on the table, Terry notes that having that kind of discipline ensures their business remains focused on the product and their client’s successful use of that product; and ensures EMK3 is not forced into pursuing non-core business opportunities whenever their primary markets slow down. Additionally, being a closely held company, with no plans to ever sell the business, they can modulate their growth as necessary to meet market demand, without the pressure of shareholders expecting double-digit annual growth.
Terry also notes that they have been able to deliver a high degree of customer support (all 30 or so of their customers are referenceable), without significantly growing their support and development staff. They will not do custom development and every enhancement that their customers request are shared across their entire user base; and all enhancements are paid-for by the company from the support and maintenance revenues they receive from those customers. Additionally, all customers are on the same same code base, and all but one is on the same version (with that one in the process of upgrading to the latest product). This ensures that they are supporting only a single code stream and do not have to maintain a larger staff of developers that split their time between multiple versions of their product.
Terry also notes that they have been able to maintain their commercial discipline by ensuring their functional foot-print is focused in the common and core capabilities of their markets. EMK3 is not going to be the company to sell you a system if you are a gas, oil or NGL trading shop. Their product is purpose-built to manage the marketing and operational transactions of their clients, and is not intended to address the needs of a energy trader or a risk manager. EMK3 is a company knows what they do; but just as important, they clearly know what they don’t do.
I did ask Terry and Alex how $40 oil is affecting their sales prospects; and unsurprisingly, they indicated their sales pipeline is being impacted. While a number of their prospects have put new system purchases on hold for now, Alex did say that some (and perhaps more that you might expect) are continuing to move forward to a purchase decision. But again, as Terry noted, they are a business built to live through the ups and downs of the market; so, however this year shakes out, they will continue to be around for the long-haul.
