ComTech Analyst Briefing Note Aspect Enterprise Solutions Ltd Overview
At a Glance
Aspect Enterprise Solutions (Aspect) was founded as OILspace in 1999 and delivers commodity trading and risk management (CTRM) and trading operations solutions to a global base of users across multiple categories, including petroleum products, crude oil, metals/steel, coal, petrochemicals and agricultural commodities. Incorporated in the USA and headquartered in London, UK, the company launched with fully webbased solutions, and is recognized as one of the first to employ a truly multi-tenanted cloud delivery model for its products. In addition to its CTRM solution, the company also provides real-time and historical data feeds and trade decision tools for traders via its AspectDSC (Decision Support Center) product line. AspectPM is its price manager solution, providing consolidation and support for the global oil price forecasting process and forward curve management. The company sells its products globally, with clients located in all geographies. Aspect has been particularly successful in selling its solutions into the mid and lower tiers of the market and to those companies that have adopted the solution as their first commercially supplied and supported trading solution. Geographically, Aspect has become the leader in vendor-supported solutions for Africa.
Financial Results Aspect is privately held and does not publically disclose financial information. However, management has indicated that the company is profitable and has grown consistently over the last seven years. The company derives revenues from three distinct offerings: AspectCTRM products sales/subscriptions, AspectDSC data subscriptions, and services related to supporting AspectCTRM customers. Aspect has noted that while revenue growth related to the AspectDSC line has be flat to slightly up over the last several years, their revenue growth in AspectCTRM has been above industry norms for organic growth and customer acquisition. Services revenues have also been growing, however at a slower pace than AspectCTRM product revenues, reducing the overall contribution of services to the company’s top line revenues. According to Steve Hughes, Aspect’s president & CEO, this lower growth rate is related to improved services and implementation capabilities, resulting in lower implementation times and reduced demand for services assistance by their new customers. According to the company, AspectCTRM can be deployed in as little as two weeks to a few months, depending on integration and data complexities.
Technology Base & Business Practices
Company Background Founded: President & CEO: Offices:
Employees: Website:
1999 as OILSpace Steve Hughes London UK New York NY Houston TX Moscow RU Singapore 100 (Est.) AspectEnterprise.com
Products AspectCTRM - Lite, Standard & Enterprise Editions AspectDSC - Market Data Portal AspectPM - Price Manager & Forward Curves
Market Profile (ComTech Est) Customers by Geography North America South America Europe Africa AsiaPac including Aust.
15% 5% 35% 25% 20%
Customers by Market Segment (CTRM) Oil/Products Traders Ag Traders Energy Producers Metal Producers
75% 5% 10% 10%
Financial Results
Aspect's technology and business practices have been relatively unique in the CTRM technology space, beginning with its web-based Software-as-a-Service (SaaS) solutions in 1999; to publishing its fees and bringing transparency to software pricing in 2011; to its strategy of targeting small to medium size businesses. While Aspect does serve several of the largest trading companies in the world, its cloud solutions and delivery advantages afford smaller companies professional trading and supply chain tools.
Aspect is a privately held company and does not disclose financials. ComTech estimates the company’s annual revenues to be in the range of $15-20 Million USD.
In 2012, Aspect began rolling out a development initiative called AESthetics which would allow companies and partners to deploy and configure their own solution, reducing reliance on consulting services and, according to the company, saving tens of thousands in professional services fees. AESthetics is an underlying framework that is built into AspectCTRM to create standardization and tools that expedite the installation, implementation and data configuration effort. Additionally, Aspect is launching a new Partner Program, partnering with a number of consulting organizations © Commodity Technology Advisory llc
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and providing access and instruction on how to leverage the AESthetics framework. As a result of these efforts, Aspects’ clients will have access to a larger number and more varied selection of consulting resources, reducing reliance on a handful of specialist CTRM resources, effectively deskilling the process and reducing project costs.
Products In summary, Aspect’s products include: AspectCTRM - A web deployed trading and risk management solution for commodity traders, risk managers, operations staff and back-office personnel. The product is built around four components: Trade Management, Risk Management, Physical Operations and Financial Operations; and is customizable around specific market segments or industries via the Aspect Multi-Commodity Framework. The solution expands to budget requirements, via what the company calls Lite, Standard and Enterprise Editions. According to the company, AspectCTRM is recognized for its advanced reporting functionality and ability to calculate P&L in real time with trading markets. The Aspect processing engine uses an in-memory database for powerful performance, instant analysis and daily, monthly and year-end closing reports that can be rolled up quickly. AspectDSC - A multi-commodity market data and analytics platform to track real-time and historical price data and news. Products include oil, refined products, petrochemicals, natural gas, metals, steel, agriculture, forex and financial indicators. It is a cloud-based portal with user selected price and information feeds from a variety of exchanges, and includes news and price services, including ICE, NYMEX, LME, Shanghai Futures Exchange, Platts, Argus, OPIS, TFS, Dow Jones, BBC and others. It's recognized for its advanced charting functionality, ease-of-use and modern intuitive interface, and mobile device functions. AspectPM - A forward curve management solution and framework for calculating, consolidating, archiving and re-distributing forward prices.
A key differentiator for Aspect is that all of its products were developed to be web-delivered applications, making the company one of the pioneers of SaaS in the commodity trading technology space. As a result, Aspect has been at the forefront of promoting the value proposition of cloud solutions since 1999. Given its technology genesis, Aspect can deliver its software in a variety of configurations including true multi-tenanted in the cloud, hosted in the cloud or, if desired, “traditional” on-premises. Aspect cites, as a result of its deployment model, benefits including fast delivery/implementation and a lower total cost of ownership; and utilizes the web-delivery mechanism to offer and deliver free trials of its software products. Aspect’s technology stack includes SUN Java platform and an Oracle RDBMS for all of its products. Integration with other software and data is achieved using web services in a Service Oriented Architecture (SOA) environment.
Company Strategy Aspect has grown out of its original OILSpace branding (since 2007) and its focus on data products, expanding into the broader global CTRM software market. Here, its innovative early adoption of web-enabled technologies has allowed it to pursue cost-conscious segments of the market that traditionally have relied on spreadsheets or light-weight home-built solutions; however, given the product’s scalability and the company’s market success, AspectCTRM is increasingly finding adoption in larger trading and trading-related firms as well. As the company has continually broadened the coverage of its AspectDSC data platform, moving from its traditional oil market data to agriculture, softs and metals, it has been able to often leverage the AspectDSC client base to cross sell its CTRM products, cooperating with those clients to increase AspectCTRM product’s commodity scope and capabilities. In addition, the company has been uniquely successful in non-traditional geographies like Africa where, once it had established a foot-hold, has managed to grow its market presence more or less unchallenged. Overall, the company has been successful executing its strategy and has experienced solid growth rates in recurring revenues, with a decreasing reliance on one-time perpetual license fees. Though the company's software had previously been solidly focused on oil and petroleum products, it has, via the cross selling of its AspectDSC client base, started to target metals and ags/softs prospects with some early success, enabling the company to invest in becoming a multi-commodity solution provider. While the company’s CTRM products do not target all commodities (such as power trading), Aspect does continue to broaden its functionality and cross-commodity coverage while leveraging its footprint, clients and expertise on the data side.
Outlook and Analysis The early focus on, and experience in, the cloud and web-enabled software means that the company is adept at creating the value proposition and answering the sales objections when it comes to cloud-based deployment and benefits from the accelerating interest in CTRM in the cloud. Current ComTech Advisory estimates indicate that growth rates in cloud-delivered solutions could reach 15% per annum, versus 3-5% for traditional onpremises software, giving the company an advantage versus its peer group in the mid and lower-tiers of the market. Additionally, given the company’s leading position with many niche or geographically isolated customers, it should be well positioned to continue to dominate those segments. In its traditional and current markets, Aspect has the product, support and positioning necessary to succeed and continue to grow at solid rates.
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While global markets for CTRM products prior to 2014 were relatively soft and some vendors in the space have seen year-over-year declines in revenue, Aspect has continued to grow and at a rate that places them in the upper echelons of their peer group in the vendor market. This above market performance is due, in part, to their origins and market gravity in the oil and oil products markets, one of the few bright spots in the CTRM markets over the last 2 years. Their cloud delivery model also provides access to various segments of the market (geographic - Africa, bottom tier, niche vertical markets, startups) that are less competitive and served by fewer vendors, but that are still growing as a result of new regulations and greater emphasis on risk management.
Opportunities Growing adoption of the SaaS and hosted CTRM solutions market Data product clients present an opportunity for future sales of CTRM solutions New regulatory and more risk averse business environment driving demand for move to vendor solutions Focused on commodities and industry segments that are currently experiencing higher growth rates
Risks Inability to execute on global growth and commodity coverage strategies, although the Aspect Partnership Program should help to mitigate this Success in opportunistically selling to top tiers of the market may not be sustainable Rapid growth could overstress organization, particularly in support and services delivery As with any privately held firm, funding to support future growth could be problematic
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About ComTech Analyst Briefing Notes Commodity Technology Advisory (ComTech) is the leading analyst organization covering the Energy and Commodity Trading and Risk Management (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 in markets constantly roiled by globalization, regulation and innovation. ComTech Analyst Briefing Notes are intended only to provide an overview of a technology, vendor or product of interest in the Commodity Trading and Risk Management market space. These Notes are not an endorsement of any product or vendor and should be viewed only as an additional source of information or data relating to the covered topic. Disclosures: At the time of this writing, Aspect Enterprise Solutions is a customer of Commodity Technology Advisory and the company’s management cooperated in the preparation of this ComTech Analyst Briefing Note.
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