The CTRM Blog

Recently, I learned about the so-called “Flex Contract” now offered in the United Kingdom (UK) energy industry by energy retailers and reached out to Simon Piercy, Commercial Director at UK-based Energy Trading and Risk Management (ETRM) software vendor, Contigo, to try to find out a bit more about this particular contract type, and what is required in an ETRM solution to cater for these contracts. Flex Contracts provide the ability to procure energy in a more flexible and informed way, and offer an alternative to a one-off contract price. The benefit of the contracts are seen to be greater choice over when to buy energy and the opportunity to make the most of market conditions.

As an analyst who has watched and participated in the E/CTRM Software space for 19-years, I am fascinated by the changes in the vendor landscape as the software category matures¹. Our published sizing of the Commodity Trading & Risk Management (CTRM) software market² recently helped us to establish estimated revenues attributable to CTRM software sales and associated services for all vendors in the broader CTRM space. It confirmed that two vendors; OpenLink and Triple Point, have opened a “gap” between themselves and the rest of the field. Today, we would estimate that OpenLink is the largest vendor on a revenue basis, but that both OpenLink and Triple Point have now grown into sizable global software companies with CTRM revenues in excess of $100 million and look set to fight it out for industry leadership over the next few years.

Eldon Klaassen, CEO of Allegro Development, is one of a select group of entrepreneurs who can be credited with creating the ETRM and, broader CTRM, class of software. That group would also include the likes of Mike Montgomery (TransGas/TransEnergy), Dick Couron (DC Systems), Michael Smith (Ensyte Energy Software), Peter Armstrong (Triple Point), Rusty Braziel (Altra), Brad Anderson (SolArc) and perhaps one or two others. Only Eldon and two others on that list are still actively involved in steering the software category to maturity at the helm of their companies.

Aspect Enterprise Solutions was incorporated in 2000 as OILSpace and now has some 11+ years under its belt as a vendor in the E/CTRM software space. Aspect is, however, somewhat unique from the other vendors in the space in two respects:

The acquisition of VIZ Risk Management at the tail end of 2010 by UK-based Brady PLC almost certainly catapulted the company into the top six in E/CTRM software on a global revenue basis creating around about a $30 million annual revenue company operating across almost all commodities. Perhaps even more interesting is that Brady PLC represents the first vendor to enter the top six by revenue globally that actually didn’t get its start in energy commodities. Brady PLC started in the metals commodity trading side of the business and has grown out from there both through acquisition and organically. It has also become the top indigenous European vendor in revenue terms, as well.