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Six Reasons to Think There Will be More CTRM Replacements in the Future

As I have stated before, replacing a CTRM has never been an easy thing. That is why, the CTRM replacement market has been smaller historically than perhaps many might expect. But things have really changed in the last couple of years and replacement is set to become a growing trend in the industry we think. Here is why.

Technology

Many older solutions were developed on what are now exceedingly dated technologies and architectures like client/server and/or Power builder. In some instances, support for these technologies is no longer available or the skill sets required to perform support are rare and hard to find. Meanwhile, cloud and SaaS are rapidly emerging as the model of choice for CTRM. Bt, to get the real benefits from cloud or SaaS, the CTRM needs to be cloud-native and not an older solution readied for implementation hosted in the cloud using a screen scraper or similar technology. As many firms are going through a migration to the cloud, they need to re-implement anyway and why not seek a more modern, cloud-native solution in the process?

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M&A activity

M&A activity is nothing new to the CTRM software space. We have seen many waves of acquisitions like those of Caminus and then SunGard or even by Brady, for example. Yet significant M&A activity has occurred in the space over the last couple of years with the acquisition of most of the larger and more dominant vendors.  If the past is any predictor of the future, we can expect that the acquiring vendors will probably try to move clients to newer and more expensive versions of the acquired software or, move them to another product that they prefer ending support for the acquired vendor’s software at some point in time, or fail to retain the key staff with expertise in the acquired product resulting in a sharp drop in support capabilities and the delivery of buggy code and so on. These have all been issues with M&A activity over the last 25-years and one can expect some mixture of these sorts of issues today no matter how hard the acquiring vendor tries. This takes place against the backdrop of a broader set of choices than ever before – there are over 100 solutions out there and we find new ones on a monthly basis!

Experience

After 20+ years, the CTRM software category is now larger and more mature than ever before. Many users and consultants have experienced suboptimal implementations and have a much better grip on how to select and implement a solution successfully – they have learned from past mistakes.

Cost

In the past, an upfront perpetual license fee and large implementation costs were off putting to anyone thinking about a replacement. Now, most vendors will charge recurring usage fees making it simply much more affordable to get into a new solution. OK – there may still be implementation costs but they too may prove lower than in the past because the vendors and consultants have got better at implementations.

Choice

Today, there are many more choices than there were in the past and the more modern solutions have equal functional capabilities to the larger and older vendor products in many cases. Buyers are spoilt for choice.

Volatile and shifting businesses

The nature of the business is significantly more volatile and changeable than in the past with smaller margins to boot. Buyers want more agile platforms where they can mix and match applications or components including even home grown applications to provide the business with more agility in its IT platforms.

In short, there are a whole host of compelling reasons to think replacements may be a far larger part of CTRM markets in the future than they have been in the past.