2013 CTRM Global Market Size

CommodityTechnologyAdvisory llc

19901 Southwest FreewaySugar Land TX 77479281 207 5412

Prague, Czech Republic+420 775 718 112

ComTechAdvisory.comEmail: [email protected]

ComTech Advisory estimatesthe value of the globalmarket for vendor-suppliedCTRM applications in 2012was $938 million.

We believe the market in2013 will show only a slightincrease over 2012, with totalestimated vendor revenuesof $976 million.

Including the value ofassociated 3rd party servicesrevenues, ComTech believesthe global market for CTRMproducts was $1.56 billion in2012 and we estimate theresults in 2013 will be $1.6billion.

1

© 2013 Commodity Technology Advisory LLC Houston TX and Prague CZ

modity nology llc2013 CTRM GlobalMarket Sizing Report

Introduction and ScopeCommodity Technology Advisory (ComTech), the leading analyst firm covering commodity trading and riskmanagement (CTRM) technology markets, has recently completed an in-depth review of the CTRM market space inorder to compile an estimate of the size of the global CTRM technology markets, and the results of this analysis andreview are included in this report.

Readers of this report should be aware that in the development of this data, we have had to necessarily delineateboundaries for the companies/applications that are reflected in this scope of the analysis.

‘CTRM’ is a term that has been widely adopted by many technology companies. “Traditional” CTRM vendors havebeen expanding their reach outside of what has been widely accepted as core CTRM through acquisition ofapplications what would commonly viewed as tools for managing and optimizing supply chains.

As such, for this report, ComTech has utilized a fairly rigid view of what capabilities are encompassed within thebounds of CTRM. The included capabilities (and associated services) for this report are:

1) Physical and financial commodity deal capture and contract management,

2) Position management and valuation and,

3) Tracking/managing of commodities logistics as they apply to functionality commonly deployed as afunctional component of large scale CTRM solutions servicing gas, power, crude and bulk productmovements,

4) Settlement and accounting of deals/transactions, and

5) Trader analytics and trading optimization tools.

2


Products, functionality, and application modules excluded from this market sizing analysis include:

1) Logistical management capabilities not associated with core trading requirements, such as truck, rail orship tracking software,

2) Production modeling or optimization software for industries such as oil and gas production, mining oragriculture,

3) Applications for managing physical facilities, such as power generation, mines, gas plants, pipelines,refineries, mills or other processing plants, and

4) The modules or functional components of ERP applications (such as JDE, SAP and Oracle Financials) thatare not directly related to trading or commodity marketing activities,

5) Applications intended only to manage financial products (which may or may not include financialcommodities) and provide no capabilities for capturing, valuing or tracking physical commodities, and

6) Supply chain management and optimization applications that cannot capture, manage or value tradedcommodities based upon their unique physical characteristics.

This CTRM market sizing study includes the following commodity classes: natural gas, power, oil and oil products,coal, industrial metals, precious metals, agricultural commodities, softs, and others (including freight, RECs, andother minor commodities).

Establishing a definitive size for any market, particularly one as complex as commodity trading and risk management,is a difficult exercise and is impossible to complete with absolute certainty. Market sizing, being a forward lookingexercise, must be based upon numerous factors and assumptions, including overall economic conditions, forcesencouraging new market entrants, historical buying patterns of existing market participants, technology driversencouraging new purchases, and the number and capabilities of the product vendors available to meet the needs ofthe market.

Despite these difficulties, we believe that our organization’s unique position in the market, that of highly experiencedanalysts and market researchers focused exclusively on the intersection of the commodity trading markets and thetechnologies that service those markets, provides us the market vision and insight necessary to compile a reliableand accurate estimate of this unique and dynamic technology market.

Note: The market sizing figures presented in this study are our best estimates based on the methodology andapproach documented herein. They should be treated as estimates and are subject to change should additional

information become available.

3


Summary of Results – 2012/2013ComTech estimates the value of the global market for vendor-supplied CTRM applications in 2012 was approximately$938 million, comprised of $235 million in license sales, $455 million in services, $214 million in support andmaintenance, and $33 million in revenues associated withSaaS deployed or hosted software. Based upon currentmarket conditions and estimated vendor results to date, webelieve the market in 2013 will show only a slight increase over2012, at total estimated vendor revenues of $976 million, withmost of the year-over-year increase associated with vendorsupplied services.

While vendor supplied software makes up the majority (in terms of available technology revenues) of the market forCTRM applications, there still exists a not insubstantial number of companies that continue utilizing third partyconsultants or internal IT staff, to develop and support their own custom solutions. ComTech estimates that thesebespoke solutions accountedfor approximately $269 millionspent on the services of thirdparty consultants in 2012, witha majority of those dollarsbeing spent on continuingsupport and maintenance,with the remaining beingexpended on development ofnew applications. Theseestimates do not include costsassociated with customer resources assigned to the development or support of these bespoke applications (internalcosts).

Though adoption rates for vendor supported solutions will vary by industry segment and geography, ComTech doesforecast that vendor-supplied solutions will continue to see additional adoption and we believe the market forcustom developed or bespoke solutions will not show any appreciable growth from year-to-year for the foreseeablefuture.

In addition to 3rd party consulting revenues associated with the development and support of bespoke functionality,consultants and integrators also maintain a significant role in the implementation and support of vendor deployedsolutions. For purposes of this market sizing analysis, ComTech includes these dollars as part of the global CTRMmarket size. For 2012, we believe some $355 million was spent by customers of vendor-supplied CTRM solutionsfor the services of these 3rd party consultants to provide assistance during the selection, implementation andintegration of the newly acquired technologies. This estimate reflects a substantial increase in the last several yearsas more customers of vendor supplied CTRM solutions are engaging with third parties to assist in their acquisitionand implementation projects. Additionally, with a number of very large projects having initiated over the last threeyears (including several with licenses sales exceeding $30 million) which employ dozens of third party consultants,we believe the expenditures for these consultants to be, on average, as much as 3 times the amount spent on vendorsupplied consulting resources.

Including these associated services revenues, ComTech believes the global market for CTRM products to be $1.56billion in 2012 and are forecasting the results in 2013 to be $1.6 billion.

Total CTRM Market 2012 2013Vendor License 235$ 237$Vendor Services 455$ 483$Vendor S&M 214$ 219$SaaS/Hosted 33$ 38$Third Party Implementation 355$ 358$Non-Vendor Solution 269$ 267$

Total CTRM Market Value 1,562$ 1,602$

NorthAmerica

SouthAmerica Europe

Middle East& Africa Asia/Pacific

Total byCommodity

Natural Gas 186$ 2$ 134$ 1$ 11$ 334$Power 172 2 155 1 15 345Oil and Products 85 20 75 17 49 246NGLs 93 1 - 5 5 105Coal 10 1 10 - 5 26Precious Metals 15 3 21 6 9 54Other Metals and Ores 39 9 34 9 41 131Ags/Softs 90 14 88 22 84 298Other (Freight, Emissions, Etc) 5 - 11 2 6 24

Totals 696$ 53$ 527$ 61$ 226$ 1,563$

Total CTRM Market by Commodity by Geography - 2012

4


Market by GeographyGeographically, North America continues to be the largest market region for CTRM software solutions, with a maturecommodity trading market, particularly in power, natural gas, oil, coal, agricultural products and metals. While therecontinues to be a number of companies that maintain non-vendor systems, a large majority of the market for CTRMtechnology in North America is serviced by vendor-supplied and supported solutions.

Europe has also a mature market in commodity trading, though less than North America in terms of natural gas andpower. Western Europe, particularly the UK and Germany have established liquid markets for gas and power tradingand are relatively penetrated by commercial CTRM solutions. Eastern Europe is a rapidly emerging energy tradingmarket, though without full and consistent liberalization across the continent, the markets in individual countriesare relatively isolated in terms of trading activities and business practices. Given the relatively small size of thesemarkets, this localization has limited the adoption of vendor-supported CTRM applications as few vendors have beenwilling or able to make the necessary investments in developing capabilities to address the unique localrequirements in each country; therefore, bespoke or internally developed CTRM is more common in the region.Elsewhere in Europe, established global trading centers in other commodities, particularly in the UK, Switzerland,and the Netherlands have a long history in tradingagricultural products, softs, and oil; and penetrationby commercially supported CTRM systems isrelatively high.

The Asia-Pacific region, driven by high demand forcommodities to meet rapidly expanding economieshas become an increasingly active market for CTRMvendors, particularly those for managing oil and oilproducts, agriculturals, softs and industrial metalsand ores. Within the last several years, CTRMvendors have found success selling products intothe Singapore and Hong Kong markets, withnational oil companies and large metals andagricultural trading companies being particularly active buyers of vendor systems. However, given cultural andlanguage differences outside of the major trading centers in the region, western-oriented CTRM vendors have haddifficulties selling their products within the borders of the largest economies in the region, particularly China andJapan, and these markets are still dominated by custom developed solutions.

45%

3%

34%

4%14%

2012 CTRM Market Share by Geography

North America South AmericaEurope Middle East & AfricaAsia/Pacific

Advertisement

5


Market Outlook and Study AssumptionsThe following assumptions were utilized in the development of the forward looking market analysis:

Growth estimates reflects current consensus outlook for global economic growth of 2-3% per year for theforeseeable future.All data 2012 dollars – there has been no adjustments for inflation or currency exchange rate changes overthe period 2013 to 2018.ComTech currently believes the global market for CTRM licenses (including ASP/SaaS) will grow, on average,approximately 5% per year from 2013 to 2018

o Traditionally installed software license sales will grow by approximately four percent per yearduring that period.

o Growth in ASP/SaaS will be approximately 13-15% over the study, exceeding that of traditionallicense growth.

Growth from 2012 to 2013 primarily reflects backlog of services associated with several exceptional sizeddeals done in late 2012. Based on 2013 results compiled at the time of this analysis, we anticipate 2013license sales to show little or no growth vs. 2012.

Despite our current forecast assumptions, there exist a number of potential market developments that couldimpact the outlook for the CTRM market in the coming years. Should global market growth exceed current forecastassumptions, the following market segments could show higher than forecast growth.

Agricultural markets and Consumer Package Goods (CPG) – Increasing price volatility and growingawareness of the value of trading-centric solutions (driven in part by CTRM vendors) for direct, indirect andcross-commodity hedging could accelerate adoption of CTRM capabilities/solutions.Trading companies and fuels intensive industries, including transportation and logistics companies,processing companies – Increased demand for oil and products could lead to higher prices/volatilities andcould increase demand for CTRM technology solutions as new entrants enter the markets and existingparticipants seek to improve risk visibility and/or grow via increasing trading volumes or by entering newmarkets.Mining – Mining has been in decline since mid-year 2012. However a strong increase in demand for metals,ores and coal could lead to increased mine development and a subsequent increase in demand for CTRMsolutions in this segment, particularly in Australia, South America and Africa.Base metals and concentrates – economic upturn will increase demand and increase price volatilities innon-precious metals trading/processing, attracting new market participants particularly in the traditionalmarket trading centers in Europe and in the import centric markets in the Asia Pacific region.Should full market liberalization in the European Union energy markets occur prior to 2017, growth indemand for CTRM products in that market could exceed 10%/year post liberalization; however the currentoutlook does not support full opening of the EUR energy markets prior to 2018.

6


5-Year Market OutlookIn developing our outlook for the global CTRM markets, we reviewed the current and perspective market bycommodities, geographies and industrial market segments; developing our topside outlook of the market basedupon this more granular review. Overall, we anticipate the total global CTRM market will grow by 4-6%, with ourestimates reflecting a midrangevalue of 5%. Within the revenuecomponents that comprise thismarket, we anticipate thattraditional installed softwarelicense sales will grow at modestrate of 3-4%, while increasingadoption of SaaS or “Cloud” basedsolutions will see growth ratesfrom 13-15%. Despite this highgrowth rate, traditionally installedsolutions will continue todominate the market for theforeseeable future.

Regional ReviewThe “Energy Renaissance” in North America is having a significant impact on prices and volatilities for both naturalgas and power, reducing trading activities across virtually all industry segments and limiting the entrance of newmarket participants.Given that thefuture outlook fornatural gas prices isflat to today’smarket, it is veryunlikely that thismarket will seemuch in the way ofincreased demandfor CTRM solutionsfor natural gas orpower during thestudy period. Mostsales of new licensesfor the energycentric market (including oil, products and coal) in North America will be for replacement of existing vendorsupported systems that have been in production for five or more years, and for expansion licenses due to organicbusiness growth. Non-energy CTRM license sales do show more promise for growth as we are seeing increasingadoption of CTRM for managing price and operational risks in the supply chains of agricultural, CPG and metalsintensive industries. We expect growth in these markets will continue, contributing to an overall growth rate in theNorth American market on par with the global average of approximately 5%.

$-

$20 $40

$60

$80 $100

$120

$140 $160

$180 $200

North America South America Europe Middle East & Africa Asia/Pacific

$Mill

ions

Total CTRM Market by Commodity by Geography - 2012

Natural Gas Power Oil and Products

NGLs Coal Precious Metals

Other Metals and Ores Ags/Softs Other (Freight, Emissions, Etc)

7


Europe is continuing to face difficulties in their banking markets and much of the continent has been battlingeconomic recession since the global financial crisis of 2008. While there are indications that there may be aneconomic recovery in the offing, a number of factors (including continuing debt issues in several countries,insufficient capital for trade finance, delayed opening of the liberalized energy markets, and a regulatoryenvironment that is still unsettled) are creating headwinds that we believe will limit the growth of the EuropeanCTRM markets to less than 5% through 2018.

Despite indications that Chinese economic growth may be slowing, economic growth in the Asia-Pacific region isexpected to remain high in comparison to the rest of the world, and the region will continue to see increasingdemand for all commodities. This demand growth, coupled with Increasing adoption of solutions for managingmarket and operational risks, will result in increasing demand for CTRM technologies, particularly those for managingexposures along the global supply chains in agriculturals, metals and oil products. We believe the growth rate forCTRM in the region will average 7-10% during the next 5 years, exceeding that in other areas.

While CTRM deals will continue to occur in South America, it has not yet matured into a predictable and reliablemarket place for CTRM technologies. As much of the regions commodities markets are export oriented, and limitedand very uneven economic growth (relative to other global economic regions) does not indicate an expansion oftrading activities within the continent, we do not see significant prospects for growth in the CTRM markets in theregion for the next several years.

Advertisement

8


Market by SegmentIn terms of market segments, we anticipate the prospects for growth in any individual segment will be dependentupon their location and commodity requirements.

Banks and financial institutions,particularly in North Americaand Europe, have beenimpacted by new regulationsand will show little or no growthin CTRM demand over theperiod; and though hedgefunds have returned to themarkets in limited numbersafter the financial crash of2008, few are buying vendorsupported systems and we seelittle indications that they willsoon be buying in any largenumber.

Energy merchants and traders,despite the lackluster gas andpower markets in NorthAmerica, are continuing to make investments in new CTRM technology solutions, including replacement systemsand expansion of existing solutions. Continuing volatility in oil and oil products prices have also brought new tradersinto the markets and this market has been fairly robust over the last several years, particularly in the Asia-Pacificregion. Smaller oil trading companies have also been active buyers of CTRM solutions over the last couple of years,particularly SaaS deployed solutions.

Despite low prices of natural gas in North America, both regional and global scale oil and gas producers havecontinued to invest in CTRM solutions, though potentially at a reduced pace as compared to previous years. Asproducers have moved their focus from gas to more lucrative liquids (oil and NGLs), these companies have had tospend to improve their trading and management systems as their market exposures in these commodities has

$-

$50

$100

$150

$200

$250

$300

$Mill

ions

Total CTRM Market Value by Industry Segment by Year

2012 2013 2014 2015 2016 2017 2018

Advertisement

9


grown. Additionally, midstream operators, those providing production gathering, processing and sometimesmarketing services to producers are making substantial investments in new facilities and infrastructure asexploration and production has expanded into new areas.

Utilities, including both power and natural gas, will continue to spend dollars to upgrade and maintain their tradingcapabilities, though the rate of growth for those expenditures is expected to small.

Several large Agricultural and CPG companies have committed to very large CTRM deals (with licenses value of morethan $10 million) in the last three years; however, as previously noted, ComTech believes these size of deals are anexception and we do not believe deals of this scale will become the norm in this market. Results through YTD 2013indicate that while the number of deals done in these market segments will increase (increased penetration) it isunlikely that deals with a license value of greater than $10 million of deals will be signed at a pace that we’ve seenin the last few years. Nonetheless, we believe the number of deals in these market segments will increase and thevalue of those deals will offset the reduced per deal value, resulting in year-over-year increases greater than the 5%average for the broader CTRM category.

The global metals markets began slowing in 2012 as demand declined in part to a slowing of the Chinese economicgrowth. Through most of 2013 the market had not fully revered, though most market analysts believe the outlookfor an improved metals market is strong. ComTech believe the metals trading markets will perform on average withthe global CTRM markets, at about 5% per year.

Within the last decade, the market has increasing seen the rise of trading companies that have expanded their focusfrom a single commodity or single class of commodities (such as energy, ags, softs, metals) and are now trading abroader portfolios of commodities. These companies, most global in the scale of their trading, may be most identifiedwith a particular class of commodity, (such as Cargill in agricultural commodities), they are in fact also trading a muchbroader array of commodities. For this “multi-class” market segment, we anticipate the growth rate will be on parwith the market average, approximately 5% per year through 2018.

10


Market by CommodityBoth natural gas and power-centric CTRM markets are primarily focused in North America and Europe, where activetrading of the commodities is fairly widespread. Within the last couple of years, there have been sales of power andgas capable systems in the Asia-Pacific region, primarily to utilities and producers; however these sales have beenthe exception forthese types ofsystems. Given thatthe North Americannatural gas prices areanticipated to remainlow for theforeseeable future andthat power(increasingly fueled bynatural gas) prices arealso expected toremain low, theoutlook for growth inCTRM for these twocommodities is forgrowth to be less than3% over the next 5years.

Oil and oil products are widely traded around the globe and the overall demand and supply balance continues to berelatively tight, yielding prices consistently above $100/bbl amid moderate volatility. These conditions, combinedwith increasing demand for products in Asia-Pacific continue to support active trading in the commodity and supporta continuing market outlook for growth of slightly more than 5% for CTRM technology serving that commoditysegment.

CTRM for NGL trading, which is almost entirely centric to the North American market, has seen an strong increasein the last three to four years as massive increases in natural gas product has led to a boom in infrastructuredevelopment and strong growth in the midstream of the market. With the development of new gas processing plantsand strong growth by producers holding liquids rich gas assets, the demand for NGL capable systems has increasedsignificantly during the last couple of year. However, as infrastructure been developed in the new producing regions,and natural gas prices are anticipated to remain low, the outlook for continued growth in NGLs is limited and webelieve beyond 2013, the market will see less than a 5% increase year over year.

Coal producers and traders are feeling the effects of a declining market for coal for power generation, particularlyin the US and Europe where environmental regulations are accelerating the closing of coal fired facilities and areeffectively killing new construction. Though large coal fired projects continue to be developed in China and otherareas of Asia Pacific, the global demand for steam coal is declining. Given these conditions we anticipate that therewill be no increase in demand for coal centric CTRM products for some time.

CTRM for precious metals is a highly variable market from year to year, driven primarily by both the price andvolatility of the gold markets. With higher prices and increasing volatility of gold, we would expect to see strong

$- $50

$100 $150 $200 $250 $300 $350 $400 $450 $500

NaturalGas

Power Oil andProducts

NGLs Coal PreciousMetals

OtherMetals and

Ores

Ags/Softs Other(Freight,

Emissions,Etc)

$Mill

ions

Total CTRM Market by CommodityInc. Vendor Revs, 3rd Party Implementation and Unaddressed

Market

2012 2013 2014 2015 2016 2017 2018

11


growth in CTRM for precious metals; however, as gold prices are driven by a number of influences outside of physicalsupply and demand, it is difficult to forecast future performance of this market. Nonetheless we do believe, basedon past performance, that this commodity segment will produce a slight increase in demand (less than 3%) through2018.

As previously noted, demand for industrial metals has softened over the last 18 months. We are however forecastinggrowth in CTRM for metals and ores to increase by about 5% per year as market conditions for industrialconsumption of iron, steel, and alloys improves.

Continuing demand for agricultural products, including many softs, will help maintain prices and volatilities.Additionally, increasing adoption of CTRM products by agricultural and CPG market players will drive provide goodmarket growth rates for technology. We anticipate that sales of CTRM capable systems will remain high asagricultural centric market participants continue to adopt to these systems to better manage price, currency, creditand operational risk associated with their long, global supply chains. In all, we anticipate growth in this commoditysegment will average 7-8% over the next 5 years.

12


Discussion of Report MethodologyTo arrive at this market sizing estimate, ComTech utilized “a bottom-up” review of all known vendors of productionsolutions and tools that meet the previously discussed criteria of CTRM technologies. While there are numerousvendors around the globe that do provide qualified (as it relates to this analysis) CTRM solutions, many of thosecompanies also provide products and associated services that fall outside the established criteria, and thoserevenues have be excluded from this analysis.

In developing the bottom up estimate related to CTRM vendor revenues, more than 90 companies were reviewedand most had some or all of their revenues included in the final CTRM Vendor Market Size Estimate. The companiesreviewed included (but are not necessarily limited to) the following:

AbacusAgibooAgrosiriusAlbedo Energy ConsultingAllegroAmphoraAscend AnalyticsAspectBradyC Square InternationalCalvusCalypsoCDACMSComFinContigoCulturaDelta EnergyDMSEgarEGAREKAEMK3EnCompassEnergeyaEnergy Solutions InternationalEnsiteEnsyte Energy SolutionsEnteroEntrion

EnuitE-OptEximwareFEAFinLogikFortechGen10GMSLHighSoftwareHivedomeHouse of CodeImagine SoftwareInfiniteInvenSoft TechnologiesIPESoft Spol sroIPSystems LtdiRelyiRiskJustCommodityKiodynosKistersKlafka & HinzKyos energy ConsultingLacimaLatitudeLloret Data SolutionsLogavivMolecule SoftwareMurexNexant

OATIOpen LinkPCIPioneerProgress SoftwareProgressiveQuantRiskQuorum Business SolutionsSAPSASRiskAdvisorySisuSoftSmithsSpectrum PrimeSquare FourSquareFour saSunGardSuperderivativesSystem AdvisorsTegosTemenosTradePaqTransgraphTransition TechnologiesTriple PointUtiligroupVentyxVesionWaterfield Energy SoftwareWellpoint SystemsWoodlands Solutions

For each known vendor of CTRM systems, research was conducted (including direct contact with many of thevendors) to obtain:

An estimate of vendor revenues and license revenues for 2012. A very small number of E/CTRM vendorsare public companies and disclose some information as part of their regulatory reporting requirements.Additionally, several E/CTRM vendors, though private, have provided this information to our companyunder terms of confidentially or, more rarely, do occasionally disclose the information publically via pressrelease or other announcements. Utilizing these actual and estimated revenues, along with known and

13


estimated headcount numbers, ComTech then generated a number of reliable reference points and ratiosfor analyzing other vendors for which we had less visibility.One of the primary ratios utilized in estimating any particular vendor’s revenues was the "revenue perheadcount" estimate. In our analysis of metrics provided by vendors or garnered through other sources,the actual revenue per headcount figure ranged from $50,000 to $230,000 per employee. This variances inthis metric was correlated to a number of factors, though the primary influences were geographic locationof the employees and level of specialization of the vendor.

Based on an analysis of the entirety of this data, revenueestimates can be accurately established for all vendorsknown to provide qualified solutions in the market.

Assumptions were then made for each vendor regardingthe allocations of those revenues amongst 4 categories:1) traditional license revenues, 2) SaaS/Hosted licenserevenues, 2) services revenues, and 4) revenuesassociated with support and maintenance agreements.

In addition to the identified and known vendors of CTRM products, we have made the assumption that there existssome number of vendors that are unknown to us. While ComTech Advisory analysts are highly experienced in thismarket, we cannot assume that every vendor, particularly those that operate in very localized markets (particularlyin the Asia Pacific and Eastern European/Russian markets), will be known outside their local areas. Therefore, we

have included a relatively smallamount of revenue (less than 5% ofthe global total) to account for theseentities.

In order to determine a total marketspend for CTRM technologies, it isalso important to account for thedollars spent with consultants andsystem integrators outside thoseprovided by the vendors of thetechnologies. We have observed aclear trend by most marketparticipants to engage such 3rd partyservices in almost all new product

implementations, and an increasing number of upgrade and other support-related projects. Utilizing the results ofa number of different research paths, we have established the value of these 3rd party services related to the initialimplementation of CTRM solutions as $355 million in 2012.

Additionally, we have established a value of custom developed or bespoke solutions (non-vendor) produced anddelivered by third party consultants at $269 million for 2012. This value represents the portion of the market thathas chosen to deploy custom developed solutions despite there being commercially available software that couldmeet many or most of their requirements. While this portion of the market is sizeable, representing about 17% of

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

2012 2013 2014 2015 2016 2017 2018

$Mill

ions

Global CTRM Market Revenue - Vendor Only

License Saas/Hosted Vendor Services Support & Maintenance

Total CTRM Market 2012 2013Vendor License 235$ 237$Vendor Services 455$ 483$Vendor S&M 214$ 219$SaaS/Hosted 33$ 38$Third Party Implementation 355$ 358$Non-Vendor Solution 269$ 267$

Total CTRM Market Value 1,562$ 1,602$

14


the total market, andthere will certainlyalways be companiesthat feel they haveunique requirementsthat cannot beadequately addressedby vendors solutions,the increasingpenetration ofcommercial CTRMsolutions will result inno appreciable growthin this market.

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

2012 2013 2014 2015 2016 2017 2018

$Mill

ions

CTRM Vendor Revenue by Commodity

Natural Gas Power Oil and Products

NGLs Coal Precious Metals

Other Metals and Ores Ags/Softs Other (Freight, Emissions, Etc)

15


AppendixMarket Size Detail – 2012 thru 2018Note: Differences in annual market size totals amongst the following data is related to rounding errorsand/or “model noise”.

2012 2013 2014 2015 2016 2017 2018Vendor License 235$ 237$ 244$ 251$ 259$ 266$ 274$Vendor Services 455$ 483$ 507$ 532$ 559$ 587$ 616$Vendor S&M 214$ 219$ 229$ 240$ 250$ 262$ 273$SaaS/Hosted 33$ 38$ 45$ 54$ 63$ 75$ 88$Third Party Implementation 355$ 358$ 369$ 380$ 392$ 404$ 419$Non-Vendor Solution 269$ 267$ 268$ 268$ 270$ 270$ 270$

Total 1,562$ 1,602$ 1,662$ 1,725$ 1,792$ 1,864$ 1,941$

Total CTRM Market Value by Revenue Component

2012 2013 2014 2015 2016 2017 2018Financial Cos. 93$ 93$ 93$ 93$ 93$ 93$ 93$Energy Merchants/ Traders 209$ 214$ 224$ 231$ 241$ 250$ 258$O&G Producers 181$ 184$ 186$ 185$ 187$ 191$ 199$O&G Midstream 98$ 101$ 100$ 103$ 106$ 106$ 110$Power Utilities 193$ 190$ 188$ 190$ 193$ 195$ 197$Refiners, Distributors, Processors 113$ 119$ 125$ 131$ 137$ 142$ 147$Gas Utilities/ LDC 35$ 35$ 36$ 37$ 37$ 38$ 39$Energy Retailers 25$ 25$ 26$ 27$ 27$ 28$ 29$C&I Energy Consumers 54$ 56$ 59$ 62$ 66$ 70$ 75$Ag Traders 152$ 163$ 172$ 182$ 194$ 206$ 216$Food and Bev (inc. Processors) 139$ 145$ 145$ 157$ 162$ 172$ 187$Ag Producers 64$ 63$ 76$ 80$ 86$ 93$ 92$Mining 44$ 46$ 48$ 49$ 51$ 53$ 55$Metals Traders 79$ 76$ 81$ 86$ 91$ 97$ 102$Multi-Class Traders 85$ 95$ 106$ 115$ 125$ 133$ 144$

Total 1,564$ 1,603$ 1,663$ 1,726$ 1,795$ 1,866$ 1,943$

Total Market Value by Segment - Vendor Revs, Third Party Implimentation, Unaddressed Market

2012 2013 2014 2015 2016 2017 2018Natural Gas 335$ 329$ 332$ 334$ 337$ 341$ 345$Power 346$ 344$ 347$ 349$ 353$ 355$ 357$Oil and Products 252$ 267$ 283$ 300$ 318$ 337$ 357$NGLs 106$ 112$ 115$ 118$ 120$ 122$ 125$Coal 26$ 26$ 25$ 25$ 25$ 25$ 25$Precious Metals 52$ 54$ 57$ 59$ 62$ 65$ 68$Other Metals and Ores 129$ 136$ 145$ 155$ 166$ 179$ 191$Ags/Softs 291$ 307$ 329$ 353$ 380$ 408$ 438$Other (Freight, Emissions, Etc) 26$ 27$ 29$ 31$ 33$ 34$ 37$

Total 1,562$ 1,602$ 1,662$ 1,725$ 1,793$ 1,866$ 1,944$

Total Market Value by Commodity - Vendor Revs, Third Party Implimentation, Unaddressed Market

16


Commodity Technology AdvisoryCommodity Technology Advisory is the leading analyst organization covering the Energy and Commodity Trading and RiskManagement (E/CTRM) technology markets. We provide invaluable insights, backed by primary research and years of experience,into the issues and trends affecting both the users and providers of the applications and services that are crucial for success inmarkets constantly roiled by globalization, regulation and innovation.

Patrick Reames – Managing Director and Founder

Mr. Reames possess a deep understanding of the energyand commodities markets, developed through hands-onexperience and managerial oversight of energy andcommodity operations, including exploration, production,gathering, plant and pipeline operations. Additionally, hehas 5 years of energy commodity trading, transportation,and risk management experience with Hess Corp. (formallyknown as Amerada Hess), a Fortune 100 integrated energy-marketing company.

Over the last fifteen years, he has been focused primarilyon information technology serving energy and commoditytrading, marketing, and risk management. Prior to foundingCommodity Technology Advisory, he led theCommodityPoint division of UtiliPoint International,providing expert CTRM market analysis and advisoryservices to dozens of clients in North America, Europe andthe Asia/Pacific region. Prior to joining UtiliPointInternational in 2005, he held senior executive positionswith several technology companies (including TransEnergyManagement, Altra Energy, and TradeWell Systems)servicing the energy and commodity markets.

An acknowledged expert in market analysis and advisory,he is a frequent speaker at industry conferences and events,has published numerous articles in industry publicationsand is an often quoted expert in news stories. He is the co-author (with Dr. Gary Vasey) of the books “Selecting andImplementing Energy Trading, Transaction and RiskManagement Software – A Primer” and “Trends in EnergyTrading, Transaction and Risk Management Software –Second Edition”.

Mr. Reames holds a B.S. in Business Administration –Finance from Oklahoma State University.

Dr. Gary M. Vasey – Managing Director and Partner

Dr. Vasey is an industry expert noted for his analysis,consulting, marketing, and branding skills. With over 29-years’ experience in the energy and commodities tradingindustry, Gary has experienced the industry’s volatility as anexecutive of a trading firm, geologist, consultant, softwaredeveloper, analyst, and marketing practitioner, providinghim with unique insights, not just into the entire valuechain, but also into how to position, brand, and deliverproducts and services to the industry.

Gary was most recently Executive Director of a Pan-European power trading firm. Prior to that, he ledCommodityPoint as co-Managing Director and is a notedexpert on the commodity trading, transaction and riskmanagement software industry and an accomplishedindustry analyst and thought leader.

Gary has published more than 200 articles on energy andcommodities industry trends in a variety of publications, isa regular speaker at industry conferences, and is the co-author of the books Trends in Energy Trading, Transactionand Risk Management Software – A Primer and Selectingand Implementing ETRM Software – A Primer (with PatrickReames). He also contributed two chapters to TheProfessional Risk Managers‘ Guide to Energy andEnvironmental Markets published by PRMIA and twochapters, co-written with Peter C. Fusaro, to Weather,Energy and Environmental Hedging – An Introduction (ICFAIUniversity Press, 2007) edited by Amando F C Da Silva.

Gary is also the co-author of Energy & Environmental HedgeFunds – The New Investment Paradigm (Wiley, 2006) withPeter C. Fusaro, and of many trade press articles on hedgefunds in the energy, commodities and environmentalindustry.

__________________________________________________________________________________________

19901 Southwest FreewaySugar Land TX 77479281 207 5412

Prague, Czech Republic+420 775 718 112

ComTechAdvisory.comEmail: [email protected]

Documents

2013 CTRM Global Market Size