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Beacon is Growing Rapidly with a New Technology Approach in CTRM

As we’ve noted often in the last couple of years, there is clearly a growing demand for new CTRM capabilities that don’t rely on the traditional monolithic solutions.  Many of these traditional software products, though functionally rich, are not necessarily rightsized for the needs of many market players. With a broad range of functionality and commodity coverage, support costs for these monolithic solutions can be very high and upgrades often difficult.  Though there clearly continues to be a market for “soup to nuts” monolithic CTRM solutions, ComTech is seeing increasing market interest and need for a more modular or extendable platform approach.

Beacon, though a relatively new entrant into the CTRM space, is one of a handful of vendors that address this growing need for a new technology approach. Using the cloud-based Beacon Platform, their customers can build out or deploy only the capabilities they require, and as their businesses grow or their markets change, they can keep pace by adding additional functionality.

I recently spoke with Mark Ayzenberg, Beacon’s senior sales representative, who told me they are seeing steadily increasing interest in their product, and their approach, to addressing the complex energy and commodity markets. “Since the fourth quarter of last year, we’ve closed several new clients, including a major North American bank in which we displaced one of the largest CTRM vendors, and a global scale energy company who have licensed the platform for managing their hedging activities for their global LNG business. Additionally, we added several tier 1 hedge funds in the US and Europe who are deploying our platform to improve their capabilities in the commodity OTC derivatives, options, future and forwards markets.”  With these successes, he noted that Beacon is growing rapidly, having added 60 employees since the first of this year and expecting to almost double in size by the end of 2021.

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When asked what he saw as the primary drivers of the rapidly increasing interest in their product, he noted a couple of important trends. The first being the previously mentioned desire by companies that want to move from monolithic solutions and a willingness to adopt new approaches like that offered by the Beacon platform. “Companies need a single source of transactional data like that offered by traditional CTRM products, but they also need the ability to add and deploy new or enhanced microservices as their companies grow.” He also mentioned the increasing adoption of cloud solutions is driving growing interest in their “platform as a service” offering.  “With our elastic cloud native solution, the system can quickly scale in the cloud and bring on potentially hundreds or even thousands of servers for complex analytics and risk metrics calculations, vastly improving processing times versus traditional software. It can then just as quickly return to a more conservative state for the day-to-day data capture and processing.”

In fact, he noted a particular use in case in which one of their clients integrated their existing data libraries with Beacon’s cloud solution to improve their analytics capabilities. Once implemented, the Beacon cloud platform was able to reduce the time needed to run their cash flow projections from 8 hours to 3 minutes, with costs reduced from $200k for dedicated hardware plus installation to $5/hour for on-demand processing.

With their start in the high volume/analytics driven financial markets, Beacon has been able to leverage that experience as they moved into the energy and commodity hedging space, and now their roster of clients includes energy producers, renewables firms, integrated energy companies and energy traders. Given the obvious and quantifiable benefits offered by their cloud capabilities and the extendibility of their platform to address changing client and market needs, we do expect them to continue to find success and grow both their presence in, and their breadth of capabilities for servicing, the broader ETRM/CTRM markets.