The ETRM market is undergoing major changes. We are seeing some of the larger players acquiring independent operators with the aim of gaining market share and creating a market monopoly.
This consolidation is disruptive to both employees of the organisations involved and customers alike.
For customers, who have invested a lot of money buying products and training staff an acquisition is bound to raise concerns. These concerns often center around the future of acquired products and upgrades, potential price rises, the costs of new licenses/adding functionality, upgrade charges, and available support.. For many customers involved in acquisitions there is the additional feeling that they have little option but to stick with existing product investments and so stay with the consolidated company.
A wide choice of products and new entrants in the ETRM space despite widespread acquisitions
Interestingly for the ETRM market the recent spate of acquisitions doesn’t appear to have reduced buyer choice. There are a number of reasons for this:
Firstly, the market is undergoing changes in technology. Cloud technology is revolutionizing product development. The traditional software model of buying product licenses is changing to subscription-based product purchases. It saves upfront investment freeing up capital for other activities. The introduction of cloud technologies has created new products and we are seeing a growing number of new entrants competing with the established players. CTRM Centre estimates the number of players in the growing $1.72bn market to be over 100.
Secondly, many of the organizations that have acquired products will need to undergo restructuring in order to absorb these companies into their operations. This creates market disruption, short term operational inefficiencies, product uncertainty especially around future development, investment, technology platforms, roadmaps etc., all resulting in potential customer dissatisfaction and a desire by some customers to change systems/switch suppliers.
Along the same vein, as the market has evolved so have the needs of buyers. Many of the products currently offered in the ETRM space are multi-commodity supporting a wide range of different commodities but not offering the specialist functionality buyers are now requiring. This was recently highlighted in an Inatech sponsored CTRM Centre white paper ‘multi-commodity ETRMs are becoming too expensive to implement and maintain.[
Seize the opportunities ETRM market consolidation offers
With consolidation also comes opportunity. As the larger players in the ETRM market acquire some of the independent operators, this change in circumstances offers organizations the chance to reassess existing systems and look at the new technologies and new emerging products.
In our follow-up blog ‘navigate your way through the changing ETRM marketplace’ we discuss more about our latest ETRM entrant Techoil that’s helping companies reorganize their systems to handle the current complexities in the oil market .
Click here for booking a free ETRM assessment.