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How to Think Like a CTRM Vendor
This page offers insights into what things you would consider when designing a CTRM from the point of view of a CTRM vendor and what things you would think about.
And then invites you to think about what sort of designs and the software landscape would look like in a system designed by CTRM users and for the best interest of those users and market participants.
A more user-centric approach to things would likely include open standards, though not necessarily Open Source, with regards to designs and, especially, interfaces between modules.
Though Experiment – Imagine This…
Part 1: Point Of View: Legacy CTRM Vendor
As a thought experiment:
1) How would you design solutions from the
point of view of a typical CTRM vendor?
1.1) First…you would be very concerned with your intellectual property. So you would keep things hidden/opaque.
1.2) Next… you would be well aware, constantly in your mind, of the tendency of software to drop down to the cost of production. Which for software is practically zero, since is it so each to just make another copy of softeware.
Think about what tricks and techniques you would use to prevent the commoditization, pun intended, of your offering.
1.3) Lastly… think about what you would do to make your software ‘sticky’. ‘Sticky’ is the term used to describe a product or software that is hard for people to switch off. You would want firms to use your one Big Software product for ‘everything’, from trade capture and risk management to confirms, invoices, accounting, etc. That would make it hardest to switch vendors.
In summary, a typical CTRM vendor will employ strategies and techniques to benefit themselves and, especially, to keep their pricing power and their existing clients paying the annual software maintenance.
Part 2: Point Of View: What CTRM User/Market Participants Want
Next up in the Thought Experiment:
2) How would you design a CTRM Ecosystem for the benefit of the users/participants?
2.1) Would much of the software would be open standards, though not necessarily open source? And if you argue that one firm may not have incentive to do this, then consider what benefits there would be if several firms grouped together, a cooperative or consortium approach?
2.2) There would be competition for key features. E.g., if you as a firm just had the ‘Trading’ part… i.e., deal entry screens, feeds from the exchanges, and a database to store the trades… imagine if you, as a firm, were able to choose from multiple vendors for a ‘Risk as a Service’ type offering. That could be fully on the Web as a Web Service, e.g., you send your trade data and get back reports and online viewing or similar functionality could be delivered as software you install locally onsite or in your own private cloud.
With open standards for communicating between modules, e.g., trading and risk or trading and scheduling, competition would drive the prices down and drive the race for new features and enhanced ease of use.
Introduction to CTRM
Click on this link for a great introduction to CTRM software: Introduction to CTRM Software