Interestingly, the company noted that their flagship solution, PowerSimm, has been enhanced to perform “one million simulations per calendar year in 10 minutes”, a benchmark that enables multiple runs of intra-day market simulations. This capability, as the company notes in their press release, is one that is in growing demand by asset-heavy power market participants and it should position the company well for increased opportunity in that segment.

They also noted new capabilities in their PowerSimm product suite, including generation dispatch optimization, day ahead generation dispatch and ISO bidding. They also highlighted the release of their PowerSimm OPS solution, which provides analytics for short-term (real-time) dispatch optimization and supply management.

I recently spoke with Gary Dorris and he noted that the company saw growing momentum through out the year in 2011 and he fully expects it to continue. “The momentum that we’ve built in terms of new client signings, new product capabilities, and increased staff has positioned us well to continue to execute on all fronts and we fully expect that 2012 will be another record year for Ascend.”

In this episode, we meet up with Dr. Markus Seiser, CEO of IRM and a managing director with OpenLink. Dr. Seiser discusses IRM’s role in the market, both as a CTRM offering and as an optimization platform. He also offers his insights into the market evolution in central/eastern Europe and in Russia, where his company has been very active over the last year or so.

As those familiar with the company know, Aspect is one of a very few companies in this space that deploy their solutions almost exclusively via Software-as-a-Service (SaaS), a model that allows them to reach buyers in the mid and lower tiers of the market that could not otherwise afford an enterprise scale ETRM/CTRM solution. In addition to the their CTRM products, the company also offers their “multi-commodity market information and decision support portal” AspectDSC, which delivers commodity market information to hand held devices like the iPhone and iPad.

According to the press release, in 2011 the company increased their customer base for their CTRM product, ApectCTRM, by 30%, selling not only to their traditional mid-tier players, but also finding success in larger accounts such as “a state-owned gas company, a key UK road fuels supplier and an $8.5Bn petrochemicals group”. Aspect also noted that sales of AspectDSC grew by 12% year over year and that the company had signed their first customer for the new metals trading product, AspectCTRM Metals.

These larger wins for Aspect would seem to indicate that the SaaS delivery model may be finding increasing acceptance outside of smaller companies merely seeking low cost solutions. It certainly does appear from these results, and anecdotal information from the market, that more and more companies are starting to give serious consideration to moving at least parts of their trading systems infrastructures onto the “cloud”, which clearly bodes well for vendors such as Aspect.

For many vendors, the post-2008 market has been challenging – with energy and commodity trading market participants pulling back from investments and new technology spend, leading to variable annual results for the E/CTRM vendors, particularly in the years from 2008 to 2010. However, as with Allegro’s results described above, many vendors have seen an uptick in market activity and more reliable spending across the major geographies (NAM, EUR, and Asia/Pac) and many market segments, including utilities and asset centric trading companies; though the speculative traders, such as hedge funds, continue to struggle and remain mostly sidelined.

All that being said, Allegro’s improved year-over-year results clearly outpace the overall improvement in market conditions and indicate solid organic growth for the company.

This conversation was recorded at E-World in Essen Germany on February 7, 2012.

The talk of the CTRM sector continues to be focused on Brady’s acquisition of Navita and Syseca and that deal’s impact on the European CTRM landscape. Though little time has elapsed since the announcement, the consensus opinion is positive – with most in agreement that the acquisitions will be a net positive not only for the respective companies, but also for the customers of each.

I spoke Brady’s CEO, Gavin Lavelle, yesterday and he indicated that the transactions should close within a few weeks and the work to integrate organizations and products could begin in earnest. In anticipation of the finalization of the transactions, he said that Knut Johansen, currently CEO of Navita, would assume responsibility for heading up the combined organization’s energy business.

We did interview Mr. Lavelle yesterday and we will have that video posted to the blog within the next few days.

A few images from the event…

While the details are still emerging, this is clearly a significant market move by Brady and one that greatly strengthens their postion in energy CTRM.  We’ll be speaking with Gavin Lavelle, CEO of Brady later in the day and will bring additional details as they become available.

Patrick Reames, Managing Director

Service providers and system integrators are a vital part of the CTRM landscape, providing unique skills or supplementing resources for companies that are working to improve their CTRM system capabilities. In fact, a recent CommodityPoint study, Consultants and Systems Integrators in Trading and Risk Management, notes that about 80% of the companies utilizing commercial CTRM systems have employed the services of one or more of these consulting organizations.

The companies that provide these services around CTRM software can be generally described as one of four types of providers:

1. Global well-known firms (including what is known as “The Big 4″) for which E/CTRM is but a component of their overall business
2. Relatively large firms that employ one hundred or more consultants and specialize in few markets, such as E/CTRM and Financials
3. Firms who service a local market only, employing a few dozen or less consultants and who specialize in a particular industry (in this case E/CTRM)
4. Boutique specialist firms, who employ few consultants, but have specific capabilities in some aspect of E/CTRM, such as risk management.

Additionally, not all of the larger Service Provider firms have capabilities (practices) around CTRM software in all geographies or locations, or they may focus in on particular aspects of Trading & Risk Management such as business consulting, strategy consulting or software selection.

capSpire, founded in early 2009 and with clients in the US and Europe, is blazing a bit of a different trail in this industry. While they had been essentially a boutique consulting firm, they have recently begun pursuing a growth strategy that leverages their deep domain knowledge around specific CTRM solutions, such as Solarc’s RightAngle product, and coupling those skills with leading edge technical resources in order to create an organization that is capable of providing unique solutions to difficult business issues. As Lance Laubach, capSpires CEO notes, “We’re always looking ways to improve our value proposition to our customers and differentiate ourselves from the competition. You can’t do that by merely providing an hour’s effort for an hour’s wage – you have to look for ways to utilize technology as a lever with which to create multiples of return for that hour’s effort.”

Having seen solid success with this model, the company has been filling their growing staffing need through the recruitment of highly experienced industry veterans and new university graduates that possess unique technical skills. The combination of resources enables capSpire to:

• Deliver expert level consulting support for industry standard CTRM applications
• Mentor and train new resources in the company’s methodologies
• Create high value, blended teams capable of consulting around industry specific issues, yet also able to deliver leading edge technical solutions at a cost below the industry average.

As Jeff Hardcastle, capSpire co-founder puts it, “We invest considerable time and resources in the area of recruiting and employee development. We have a very strict discipline on the skillsets we recruit and have grown very effective at identifying those traits, especially in college hires. All of our new hires, including those from the universities, undergo a comprehensive three month program of education in our methodologies, the CTRM market as a whole, and our unique technical “toolbox” that we’ve developed around our CTRM practice that allows us to provide holistic “engineering quality” solutions that contrast stereotypical consulting methodologies.”

The “toolbox” that Mr. Hardcastle references is being leveraged as the company has also been purposefully evolving from a “pure” consulting business to one that is more of a full service CTRM company – that is an organization that provides both services and products that support, but are essentially agnostic, to the underlying CTRM product(s). capSpire has taken a few of the technical solutions within that “toolbox” and are evolving those into products that can create significant value and accelerate the delivery of solutions to complex business issues.

Their first such product offering, Gravitate, is a CTRM “portal” and is currently in use by wholesale petroleum marketers, providing a valued added service to their customers. This newly delivered product enables a marketer’s customers to access their information contained within the marketer’s CTRM system, such as prices, trade performance, and invoices. The system, via the use of its own data structures, is independent of the underlying CTRM software, yet has been designed to easily integrate with all leading products, providing a highly configurable platform for web-enabling those products.

According to Mike Scharf, the other capSpire co-founder, “We recognize traditional consulting is all about reinventing the wheel on each project. Our approach is recognition that for most clients, they don’t need a new wheel; they need a services partner who can quickly provide them with the solutions they need coupled with the reassurance of an “always available” partnership. The Gravitate CTRM Portal is just another example of our own innovation and investment in creating solutions that don’t require our clients to reinvent the wheel.”

capSpire has been able to create a bit of a unique animal in this market. Their deep domain knowledge and roster of talented people and specialized technical solutions has enabled them to grow quickly and has provided a solid base of referential customers. Their challenge will be in maintaining what for some has proven a difficult balance between growing rapidly and maintaining a consistently high quality of service on the consulting side. capSpire’s recruiting and training model, combined with their ability to leverage proprietary technical solutions would seem to position them well for meeting that challenge.