Commodity Technology Advisory llc June 2014 1

Aspect Enterprise Solutions Ltd

Overview
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 web-
based 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 companys top line revenues. According to Steve Hughes, Aspects
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
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.
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
ComTech Analyst
Briefing Note
Company Background
Founded: 1999 as OILSpace
President & CEO: Steve Hughes
Offices: London UK
New York NY
Houston TX
Moscow RU
Singapore
Employees: 100 (Est.)
Website: 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 15%
South America 5%
Europe 35%
Africa 25%
AsiaPac including Aust. 20%
Customers by Market Segment (CTRM)
Oil/Products Traders 75%
Ag Traders 5%
Energy Producers 10%
Metal Producers 10%
Financial Results
Aspect is a privately held company
and does not disclose financials.
ComTech estimates the companys
annual revenues to be in the range of
$15-20 Million USD.
At a Glance
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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, Aspects 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 platformto 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.
Aspects 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 products scalability and the companys 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 products 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 companys 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 on-
premises software, giving the company an advantage versus its peer group in the mid and lower-tiers of the market. Additionally, given the companys
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 Notesare 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 companys management
cooperated in the preparation of this ComTech Analyst Briefing Note.
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