What Is CTRM in the Cloud?

The hot trend for 2016 seems to be CTRM deployed in the cloud as ComTech predicted earlier this year.

Almost every vendor in the space now has a cloud strategy of one sort or another and a very small number have begun to offer standard versions for a simple monthly fee. With many companies facing cost or regulatory pressures (or both), the idea of a lower total cost of ownership has become an attractive proposition that is rapidly changing attitudes to CTRM in the cloud according to our research. However, beware of what it says on the box because there are many misconceptions around cloud deployment of CTRM software that we have tried to address in the past.

Firstly, what do we mean by cloud? Private cloud, public cloud? CTRM in the cloud can mean something as simple as using a tool like Cytrix to screen scrape and then deploying the solution in a private cloud. In fact, we refer to this as ‘hosted in the cloud’ for in reality this isn’t SaaS and it is barely cloud if we were to be strict.

What is SaaS? Software as a service means that you pay for a standard set up and it is delivered to you as a service that you pay a usage fee for. The fee includes all aspects of use, support, maintenance and also probably some development hours – something like a Salesforce.com approach however, we aren’t seeing much interest or uptake in multi-tenanted SaaS (where the same instance of the database is utilized by many different parties each in its own protected sandbox). What we do see an active interest in is single-tenanted SaaS in the cloud where the instance is used by me and me alone.

Software designed for SaaS deployment in the cloud actually needs to be designed that way from first principles. It should be architected as a number of discrete services and not just a hunk of monolithic code hosted in the cloud instead of on premises. Many of the newer vendors have built their software this way and almost all vendors are in the process of migrating to such a model.

Our research also suggests that there is a core of commodity trading companies that still resist cloud deployment and probably always will. For them, on premises deployment is the only way to go for a variety of reasons often led by security concerns,a feeling that integration is more difficult in a cloud environment and that they have special needs. Where cloud is gaining favor appears to be in the middle tier where costs are a concern and IT not a core competency and also among much smaller businesses that in the past might have relied on spreadsheets. Suddenly, regulations demand more robust and auditable solutions and SaaS provides a low entry cost and lower total cost of ownership.

There also is a definite geographical factor involved as well. Whereas Asian companies might naturally look to cloud and European companies are more and more willing to, one does get a sense that North America lags a bit. In part, this is probably explainable in that North America is the most mature market and many firms have already invested considerable sums in CTRM software. Conversely, Asian markets tend to be less mature and it’s natural to look for the low cost and most modern solution without the need to consider data conversion, retraining and so on. Europe lies somewhere in between.

This year, I have also listened to two presentations from cloud (not CTRM) companies in which traditional concerns like security and loss of control and so on have been annihilated as arguments against. The sales pitch and the technology is just getting better and better. Of course, many aspects of our daily lives are already in the cloud too so acceptance is growing as a result.

While we see rapid growth in interest and deployment of CTRM in the cloud, we do also believe that buyers need to be careful and test what the vendor actually means and can deliver in terms of services and the cloud. Buyers also need to be cautious about terminology. What is meant by cloud and what is meant by deployment in the cloud? Is it a service level agreement or a perpetual license that you are being offered? ComTech’s last report on CTRM in the Cloud may be a useful guide in that respect.

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