Mixed Signals?

With so many strands of activity and so many changes taking place in commodity technology markets, trying to spot and understand trends is akin to reading tea leafs at times. However, in recent weeks, conversations with various people in the industry seems to be suggesting that at least here in Europe, a picture is now emerging.

I spoke to and reported recently on Contigo seeing an uptick in activity in the power side of things with a large cloud component to that and just this week, I spoke to an ags and softs CTRM vendor who told me activity had really picked up since August with RFP’s on the street in commodities like Coffee, Cocoa, Sugar and even Grains. While nothing had yet resulted in a contract, these did appear to be processes that would complete in a selection and implementation.

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This morning I spoke to Carl Vellenoweth of Commoditas Partners. It’s been a while since I had discussed employment trends with Carl but I always find these insightful and another way to look at the market. Carl pointed out that many end user companies right now are focusing on getting things like data management, compliance and security, and technology stacks right before engaging on an ETRM or CTRM selection or upgrade. He points to other areas of activity as being those plus procurement and treasury – something we also have observed. While there are lots of RFPs around, his opinion is that not much is actually closing as these projects are put on hold to address data management and other issues such as upgrading the technology stack. Consequently, one area of recruitment he sees is in DevOps recruitment into end user business. He too sees cloud vendors like Aspect and Contigo, winning deals but for his business, these do not create much of a job market in their wake. He describes it as a ‘messy’ market right now.

Demand for consultants with skills in products like allegro, OLF and so on is down while strangely, he sees an uptick in people seeking Triple Point skills – could it be that Triple Point/ION is now convincing clients to upgrade? We don’t know as ION don’t talk to us and seem to lack any marketing function whatsoever but we have heard from others that Triple Point is again competing for business. Carl told us the consulting market has also gone quiet and pointed to a number of firms that were very visible in the space two years ago that are now more or less gone. Recruitment for consulting around ETRM products has fallen off dramatically it seems but he has seen more activity in the treasury and procurement spaces and over the last 5-6 months, it has been in the data management and content management areas, he told us. He sees many firms needing to undertake some housekeeping in order to upgrade ETRM/CTRM products and that, he thinks, is taking precedence currently in terms of spend.

Many of these observations tend to support and supplement the emerging picture we have of European CTRM markets which are giving mixed signals and when you add in disruptive technologies, it really is difficult to read. However, we see the following – and these observations have all been made in other blog articles;

  1. The market has shifted in terms of make up with a significantly smaller top tier, squeezed middle tier and a much larger bottom tier,
  2. The top tier is trending towards buy and build solutions as opposed to build completely and is seeking partners on the technology side that gives them a head start,
  3. The bottom tier is looking for cost effective, off the shelf, rapidly implemented solutions and hence is buying cloud and this is benefitting smaller vendors however, these smaller deals don’t create much of a wake,
  4. The middle tier is more concerned about infrastructure, security, compliance and preparing for the next phase of activity and this is where its development and procurement dollars are going in the large part so the traditional E/CTRM package market is sort of stalled out by and large,
  5. Smaller vendors are taking market share from the top 3-5 vendors right now – its a slow process but many of the larger vendors have been caught a bit off guard by changes in the market and in particular the migration to cloud.

Plainly, thats a high-level summary view but it is interesting talking to recruitment specialists and seeing support for such conclusions in the job market.

We also touched on traders and the trading area in the light of the interest in automated trading and various recent article like the Bloomberg one on ags & softs. Carl pointed out that trading floors have already changed dramatically with fewer traders and more screens and IT people – employment trends were heavily in favor of technical people including analysts, programmers and so on. The trading floor is set to change and to change quickly and dramatically it would seem.

One other point I found interesting was how the larger vendors are hiring sales people. In Carl’s opinion, the sale people at the larger vendors are not the same calibre as they were a few years ago. He said that sales management was now more often than not people from peripheral industries and that those with long track records of C/ETRM sales were often overlooked in the hiring process. I have seen this trend before actually – it is where management wants to increase the ‘professionalism’ of its sales force by bringing in seasoned people from other more ‘mature’ industries. It doesn’t work. These people actually don’t know how to sell in a commodity world – they don’t have the contacts or the knowledge and eventually end up protecting their territory and driving out those that do…. So, if Carl is right about this trend, I’d see this as another area of concern in terms of vendors creating urgency and demand for solutions….

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