Periodically, we are asked why there hasn’t been more consolidation in CTRM. Why are there over 100 CTRM software solutions still? (See our directory). It’s a good question because in most software categories, especially 20 odd years in, there will be just a handful of remaining solutions probably led by one dominant vendor. Why isn’t CTRM the same?
Well, firstly, there are some similarities. Plainly, there a couple of large vendors in the space like ION and arguably SAP. There are a few additional vendors that compete generally with ION or SAP often and are well known long-lived vendors like FIS, Eka, Amphora, and others. That is true.
But where CTRM differs as a software category and why there is still room for over 100 additional solutions is largely a result of the following,
CTRM is a very broad term even if tightly defined (ComTech offers a tight definition required to perform our annual market sizing – see that report). However, the software category covers all commodities both physical and financial, all industry segments with significant commodity exposure (which can include segments as diverse as food and beverage, automotive, airlines, manufacturing and more), and all geographies. That is a tall order and so it follows that certain commodity/location/segment combinations will be better served by certain products over others. It is also true that in each case of commodity, segment and geography, there will exist vendors offering target CTRM software.
Another facet of the CTRM landscape is historical. Some vendors got started twenty years ago and have weathered all of the change to emerge today. Others were not so lucky. Perhaps they were acquired and subsumed. Perhaps they fell back to service a specific niche market as one of the targeted offerings mentioned above. Meanwhile, the constant change in commodities through time meant that barriers to entry were often lowered to vendors in FinTech, Mining and production, Risk Analytics, Supply Chain Management, Utility Operations and more, allowing them to enter the mix with solutions again tailored towards specific use cases. Finally, there are always 5 guys in a garage with a good idea who develop and bring to market something innovative and technologically advanced.
And while there are other reasons as well, those two essentially help to explain why in 2023, twenty plus years after FERC636 helped create the CTRM software category, there are still so many suppliers.