Last week, in London, I stopped by BlackLight Systems on the offer of a walkthrough of the system. Sebastian Ferraccu, Co-Founder and CEO, had invited me to take a look at where they were with the solution. Mr. Ferraccu is an ex-trader that having interacted with a variety of ETRM solutions for hydrocarbon liquids, decided that perhaps he could do it better – at least with the trader specifically in mind. Whilst in his prior role, he started work on designing the solution and then using it, in anger, for several years in-house before stepping out to focus seriously on the solution. He is now focused 100% on Blacklight he told me.
He started by explaining his motives. Using a well-known system that proved to be more difficult to set-up than imagined and difficult to implement, it was lacking in what the traders needed, he explained. The Blacklight system ended up being used on every trader’s desk for trade capture and more with an upload to the main ETRM in use. BlackLight was easier and more efficient to extract ‘one-click’ information than the main ETRM.
Over the years, ComTech has met a lot of entrepreneurs who initially worked in the business but decided they could do better from a systems point of view. Contigo, for example, springs to mind as another example where the original founders just decided to build a better solution. It is a common was for new vendors to come to life it seems and speaks to a steady undercurrent of frustration with the ‘legacy’ solutions at any point on the market.
The first thing I noted about the BlackLight system is that it just looks different. In a software category where frankly, most systems look pretty much like one another, this one is quite different. The UI is plainly designed for traders and risk managers with all sorts of short cuts, drill-downs and views on the data. It’s black alright – a black screen lit up by the text and charts it displays which is where I suppose it got its name? Having said that, it is also easy on the eye. The system can take trade feeds or you can enter them manually and features a useful screen to compare system position to exchange position, for example. Through partners, the solution can bring in live outage information (IIR) to it, (automatically translating those to Product Lost), can load and display 10-years of historical forwards price data and settlement data from Platts and Argus. The result is a system rich with exactly what the trader needs.
Trade capture is fairly straightforward and achieved through a combination of defaults, automatic population of things like exchange codes, fees and so on. Spreads are also easy to enter by virtue of some logical design and each deal has a full audit trail and can be copied for a new trade. Useful graphics are used where needed to accentuate the user view.
What struck me was the way in which filters are used – a comprehensive set of filters allow all sorts of views on the data. All screens like price, position, PnL and so on have ways to look at changes from period to period and investigate discrepancies. It may have been built with a trader or risk manager in mind, but accountants may like it too because it is designed to quickly investigate and resolve any issues.
Right now, the solution still misses invoicing (in the pipeline for both physical and paper trading) and there is no connection yet to an accounting system. Plainly, logistics is also missing. Despite that, this is more than an ETRM – it’s a trader tool, risk workbench and fundamental analysis tool all rolled into one and it works as smartly on the mobile phone as it does a screen (controllable by tenant). It is in the cloud and it is cloud native, and multi-tenanted.
BlackLight has chosen a highly competitive part of the ETRM market to focus on. Existing solutions from the likes of ION OpenLink, ION TriplePoint, Amphora and ION Aspect are now competing with a raft of newer solutions such as InaTech, InstaNext, Fendahl, Ignite and others. Despite that, the BlackLight system seems to us to be sufficiently different with features and functionalities that will appeal to certain aspects of the market and certainly to traders and risk managers. Furthermore, it can be used in conjunction with any of those other systems for trade capture and market analysis. BlackLight is now reaching the stage at which it must go to market and compete. We will check back in 2019 to gauge its progress.