September 2014, IDC #251539e

MARKET ANALYSIS

Worldwide Treasury and Risk Management Applications 20142018 Forecast and 2013 Vendor Shares

Christine Dover Michael Versace

IN THIS EXCERPT

The content for this excerpt was taken directly from IDC Market Analysis: Worldwide Treasury and

Risk Management Applications 20142018 Forecast and 2013 Vendor Shares (Doc #251539). All or

parts of the following sections are included in this excerpt: IDC Opinion, Situation Overview, Future

Outlook, Essential Guidance, and Learn More sections that relate specifically to Kyriba, and any

figures and or tables relevant to Kyriba.

IDC OPINION

The corporate treasury and risk management applications market has been growing modestly over the

past few years, but it is expected to pick up steam over the next five-year forecast period of 20142018.

For the past few years, enterprises have looked to contain costs and minimize head count in treasury

departments as they look for efficiencies, but they have neglected to invest in more modern treasury

solutions that deliver the 3rd Platform value propositions of cloud, social, mobile, and big data that are

being recognized in other enterprise applications. It's doubtful that treasury departments can continue

to improve their performance without some much-needed technology investment in the coming years.

IDC finds that technology and business process investments are needed in corporate operations as

the risk and treasury management function is being transformed by market demands from an

operational process into a strategic function within corporations in all vertical markets, as it has done

over the past six years in financial services. The corporate market recognizes this need as treasury

and risk applications market growth rates accelerate through the balance of the decade. In detail:

Worldwide revenue for the treasury and risk applications market was $2.1 billion in 2013, representing growth of 4.3% over the $2.0 billion reported in 2012.

The treasury and risk applications market is forecast to increase to a total of $2.7 billion by 2018, representing a 4.8% compound annual growth rate (CAGR) for the 20132018 period.

The top 5 vendors in 2013 based on worldwide revenue were SAP, OpenLink, Oracle, Murex, and Bottomline Technologies, together accounting for 48.6% of the market total.

The top 5 vendors in 2013 based on revenue growth were Kyriba (35.7%), Reval (22%), Wall Street Systems (13.5%), Bottomline Technologies (7.9%), and OpenLink (6.9%).

2014 IDC #251539e 2

IN THIS STUDY

This study examines the corporate treasury and risk management applications market (a subset of the

overall financial accounting market) for the period from 2011 to 2018, with vendor revenue trends and

market growth forecasts. Worldwide market sizing is provided for 2013, with trends from 2012. A five-

year growth forecast for this market is shown for 20142018. Revenue and market share of the leading

vendors are provided for 2013.

Methodology

See the Methodology in the Learn More section for a description of the forecasting and analysis

methodology employed in this study.

In addition, please note the following:

The information contained in this study was derived from IDC's Worldwide Semiannual Software Tracker database as of May 9, 2014.

All numbers in this document may not be exact due to rounding.

For more information on IDC's software definitions and methodology, see IDC's Software Taxonomy, 2013 (IDC #241527, June 2013).

Please be aware that IDC's software forecast is built from a bottom-up approach in which our country

analysts develop the values in local currencies. These local currency values are then converted into

U.S. dollars (USD) to produce our forecast in one consistent currency. The latest quarterly exchange

rate (termed "current") is used to better reflect the impact of the most recent known economic situation

in each country. As an example, the USD-to-euro exchange rate showed a difference of -4.1%

between the current 2Q13 exchange rate and the current 4Q13 exchange rate. In addition, major

countries such as Japan and the United Kingdom showed differences of 1.6% and -5.1%, respectively,

in their USD-to-local currency exchange rates over the same period.

As a result of the different exchange rates used, our 2014 forecast growth rate for the total software

market has been revised to 5.9% year on year (see Figure 1). If we disregard the impact of exchange

rate fluctuation, our 2014 forecast growth rate for the total software market is set at 5.7% year on year,

which is closer to the rate forecast in November 2013 (6.2%) under the constant exchange rate.

2014 IDC #251539e 3

FIGURE 1

Worldwide Software Revenue Growth, 20102018: Comparison of November 2013

and May 2014 Forecasts

Source: IDC, May 2014

Treasury and Risk Management Applications Market Definition

The treasury and risk management applications market is a submarket of the financial accounting

application market.

Treasury and Risk Management

Treasury and risk management applications support corporate treasury operations (including the

treasuries of financial services enterprises) with the corresponding financial institution functionality and

optimize related cash management, deal management, and risk management functions, as follows:

Cash management automation includes several treasury processes involving electronic payment authorization, bank relationship management, and cash forecasting.

Deal management automation includes processes for the implementation of trading controls, the creation of new instruments, and market data interface from manual or third-party sources.

Risk management automation includes performance analysis, Financial Accounting Standard (FAS) 133 compliance, calculation of various metrics used in fixed-income portfolio analysis,

and market-to-market valuations.

2014 IDC #251539e 4

SITUATION OVERVIEW

Worldwide revenue for the treasury and risk applications market was $2.1 billion in 2013, representing

growth of 4.3% over the $2.0 billion reported in 2012.

Performance of Leading Vendors in 2013

Table 1 displays 20112013 worldwide revenue and 2013 growth and market share for treasury and

risk management applications vendors. The top 5 vendors in 2013 based on worldwide revenue were

SAP, OpenLink, Oracle, Murex, and Bottomline Technologies, together accounting for 48.6% of the

market total. Some of the factors driving growth in the treasury and risk applications market are:

Demand for cloud-based treasury and risk management solutions driving double-digit growth at vendors such as Kyriba and Reval, while legacy vendors adjust to the changing economics

of subscriptions over on-premise licensing

Unrelenting mandate to optimize corporate and banking cash flows for funding day-to-day operations and to support business expansion

The need to improve controls and be responsive to regulatory change in volatile markets

Corporate strategies to establish enterprise financial management and the enabling analytical applications to effectively adapt to shifts in financial accounting regulations including the

adoption of international financial reporting standards defined in IFRS, the convergence of

U.S. GAAP financial reporting, and the implementation of other financial reforms; the growing

importance of treasury data in all cash management, expenditure, investment, pricing, and

M&A activities, and the recognition of the need to eliminate treasury, risk, and finance barriers

as a pathway to timely and defensible data for risk decision making

The last forecast for the worldwide treasury and risk management applications market was published

in Worldwide Treasury and Risk Management Applications Forecast and Vendor Shares (IDC

#219189, July 2009). Since that time, there have been significant changes in the market, primarily due

to vendor consolidation and platform development strategies. Those changes include the following:

Reval acquired FXpress in 2009.

Wolters Kluwer acquired FRSGlobal/IRIS in 2010.

IBM acquired Algorithmics in 2011.

Infor acquired Lawson in 2011.

Wall Street Systems acquired Thomson Reuters' Treasura in 2011 and IT2 Treasury Solutions in January 2013.

Other vendors include Bellin, GTreasury, Inatech, and Treasury Dynamics.

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TABLE 1

Worldwide Treasury and Risk Management Applications Revenue by Vendor,

20112013 ($M)

2011 2012 2013

2013

Share (%)

20122013

Growth (%)

SAP 401 397 387 18.4 -2.5

OpenLink 182 201 215 10.2 6.9

Oracle 153 166 156 7.4 -6.2

Murex 147 141 142 6.8 1.0

Bottomline Technologies 91 112 121 5.8 7.9

Sage 107 111 118 5.6 6.6

Wallstreet Systems 100 93 105 5.0 13.5

Infor 63 68 72 3.4 5.9

Reval 37 41 50 2.4 22.0

Kyriba 22 28 38 1.8 35.7

SunGard 31 30 30 1.4 NA

ACI Worldwide 37 36 30 1.4 -17.5

FIS 22 22 22 1.1 1.8

Fiserv 16 16 16 0.8 2.6

Wolters Kluwer 13 13 12 0.6 -7.7

IBM 4 4 4 0.2 2.6

Financial Sciences Corporation 1 1 1 0.0 NA

Thomson Reuters 1 1 1 0.0 NA

Infosys 0 0 0 0.0 NA

Subtotal 1,426 1,479 1,519 72.2 2.7

Other 571 536 584 27.8 9.0

Total 1,997 2,015 2,103 100.0 4.4

Source: IDC, July 2014

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Performance by Geographic Region in 2013

Figure 2 displays worldwide treasury and risk management applications revenue share by region in

2013. The Americas, with revenue of $922 million (43.8% share), is the largest market. Following very

closely behind is Europe, the Middle East, and Africa, with revenue of $887 million (42.2% share).

Asia/Pacific (including Japan) is the smallest market, with $294 million in revenue and 14.0% market

share.

FIGURE 2

Worldwide Treasury and Risk Management Applications Revenue Share by

Region, 2013

Source: IDC, July 2014

Vendor Profiles

The sections that follow profile a few of the treasury and risk vendors that IDC spoke with during 2014.

Kyriba

Kyriba, founded in 2000 and headquartered in San Diego, California, and with its roots in Western

Europe, serves large enterprises with Kyriba Enterprise and midsize enterprises with Kyriba Pro. In

addition, Kyriba Mobile is available at no cost to Kyriba clients. Over 850 clients worldwide are

currently using Kyriba products, and 90 of those clients were added during the first half of 2014, which

is a good indicator of client momentum. Kyriba's clients include name brand companies across a

variety of industries including retail, manufacturing, energy, services, transportation, healthcare, and

technology. Kyriba reports that it has achieved a 98% client loyalty rate, while many cloud providers

report loyalty rates in excess of 90%. IDC views a 98% rate as excellent and speaks well for Kyriba's

focus on customers and their concerns including security, service, and scalability.

Kyriba's SaaS multitenant architecture includes connectivity to banks, trades and market solutions,

and ERP systems, including a certified integration to NetSuite. The products include functionality for

cash and liquidity management, bank relationship management, payment management, financial

2014 IDC #251539e 7

transactions, risk management, and trading solutions. In August 2014, Kyriba released 14.2, its third

product release in 2014. The 14.2 release included expanded global capabilities, improved user

experience, and improved payment coverage and control. Kyriba invests 22% of its revenue in R&D.

The level of R&D investment is an important consideration for buyers of any application solution.

Kyriba is privately held and has over 300 employees in 8 offices worldwide.

FUTURE OUTLOOK

Forecast and Assumptions

Worldwide Treasury and Risk Management Applications Forecast, 20142018

The importance of treasury, risk, and liquidity platforms to the CFO function will only increase as

enterprises of all types experience market changes and pressures to efficiently use cash and other

liquidity options at key points in their supply chains. To meet these needs, the themes of speed,

decision-making intelligence, instantaneous response, mobility, and personalization will become table

stakes for winners in the treasury services market as service providers and vendors face growing

customer demands and opportunities enabled by 3rd Platform technical innovation.

IDC's estimate of growth of the treasury and risk management applications market for 20132018 is

presented by region in Table 2. The overall CAGR for the treasury and risk management applications

market is expected to be 4.8% for the 20132018 period.

IDC analysts around the globe supplied regional input and insight into the treasury and risk

management application market forecast. The worldwide forecast is the aggregation of this regional

data (see Table 2). Revenue by geographic region for 2013 and 2018 is shown graphically in Figure 3.

The Americas makes up close to one-half of the overall treasury and risk management applications

market, with $922 million (43.8% share) in 2013 and forecast to reach $1.2 billion (44.6% share) in

2018. Following closely is Europe, the Middle East, and Africa, with $887 million (42.2% share) in 2013

and forecast to reach $1.1 (39.8% share) billion in 2018. Asia/Pacific (including Japan) remains the

smallest market, with $294 million (14.0% share) in 2013 and forecast to grow to $413 million (15.5%

share) in 2018.

TABLE 2

Worldwide Treasury and Risk Management Applications Revenue by Region,

20132018 ($M)

2013 2014 2015 2016 2017 2018

2013

Share (%)

20132018

CAGR (%)

2018

Share (%)

Americas 922 960 1,002 1,060 1,124 1,189 43.8 5.2 44.6

EMEA 887 901 949 969 1,004 1,061 42.2 3.6 39.8

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TABLE 2

Worldwide Treasury and Risk Management Applications Revenue by Region,

20132018 ($M)

2013 2014 2015 2016 2017 2018

2013

Share (%)

20132018

CAGR (%)

2018

Share (%)

APJ 294 309 317 352 384 413 14.0 7.0 15.5

Total 2,103 2,170 2,268 2,381 2,512 2,663 100.0 4.8 100.0

Growth (%) 4.3 3.2 4.5 5.0 5.5 6.0

FIGURE 3

Worldwide Treasury and Risk Management Applications Revenue by Region,

2013 and 2018

Source: IDC, July 2014

Market Context

A five-year forecast (20082013) was last published for the treasury and risk management applications

market in Worldwide Treasury and Risk Management Applications 20092013 Forecast and 2008

Vendor Shares (IDC #219189, July 2009). Since it has been more than five years this data was

published, a comparison with the current forecast is incomplete and not deemed to be relevant.

2014 IDC #251539e 9

ESSENTIAL GUIDANCE

For End Users

There are eight strategic capability sets that corporate treasures, financial accounting, and risk

managers should seek out from vendors in evaluating vendors and product capabilities in next-

generation risk and treasury management systems:

Analytics as core. Beyond simple transaction platforms that traditionally included cash management automation, deal automation, and compliance reporting, end users should set

their expectations high and seek out cash platforms that combine powerful transacting with

cross-bank decision tools, ERP-enabled analytic analysis, multientity and real-time reporting,

and more intuitive information aggregation.

Tools for improved customer engagement. While treasury offerings mature and become increasingly commoditized, customer experience becomes a more important differentiator.

Users should favor solution providers that are investing in advanced corporate customer-

centric functions such as seamless onboarding, collaboration, single sign-on, and mobility.

This set of tools serves as a counterpart to the user-friendliness mandates in retail channels

actively being delivered to the end customer. Furthermore, to help improve operational

turnaround time, look for market data and workflow tools that seamlessly integrate with

enterprise platforms and devices.

Financial data aggregation. The complexity of the financial performance management for account valuations and performance reporting is fueled by the challenge of capturing and

preserving data at the most fine-grained level from multiple sources. Look for solutions that

simplify the ability to acquire data from internal systems and external providers, including

banks and that provide aggregated data in a consistent, normalized industry format for loading

into internal databases and other applications (financial and regulatory reporting) while

eliminating inefficiencies of manual data gathering and processing.

Information centralization. In transaction banking areas, look for banks and solution providers that have enhanced their treasury tools across payments, collections, liquidity management,

clearing, and settlement. One common characteristic of such enhancements is the ability to

seamlessly centralize information through consolidated account balances across multiple

institutions to aid in cash forecasting, trade financing, escrow management, currency trading,

and other functions across the liquidity risk supply chain.

Support of global and regional hubs. Many large corporates have seen substantial benefits when centralizing their payments operations into regional centers. These payment factories

give the customer more control, reduce operating costs, and provide them the buying power to

negotiate better terms with their banks. Look for TMS providers that have expanded payment

factories to include a broader set of treasury functions, including intercompany netting and

virtual accounts to exploit liquidity and reduce treasury risk across operating units.

Corporate connectivity. After over a decade of stated demand, corporate connectivity continues to make steady progress regionally, using a business process integration approach

to optimize the multistep process of service integration for payment instructions and entity

collaboration. Investigate corporate-to-bank integration closely. It's a potential game changer

as it serves as a platform for corporates to link directly with liquidity providers (and vice versa),

extending and automating many hops in financial workflows.

2014 IDC #251539e 10

Trusted, seamless security. As cybercrime spreads and shifts from consumer to B2B interactions, identity and access management, user and transaction authentication, digital

signatures, and end-to-end data protection must be delivered seamlessly as a personalized

convenience to corporate users and cover all transaction, collaboration, and data interactions.

Ensure that these "trusted" environments can adapt to changes in risk profiles and appetites.

Other 3rd Platform value creation. Other aspects of the 3rd Platform of IT will continue to disrupt legacy transaction platforms offered to treasurers. For example, corporate treasurers

can now go to the cloud for complete, SaaS-based TMS solutions that offer complete ERP and

bank functions' connectivity. At the other end, banks are expanding on the ability to provide

offerings to untapped customer segments through cloud-based billing preparation and data

aggregation as a bank-agnostic service. This offers an opportunity for corporates and bankers

to extend services and reach new business relationships. Look for data analytics and social

collaboration to become an increasingly important differentiating factor as providers look to

surround CFOs, treasurers, and accountants with actionable decision-making information for

receivables, payables, FX options, exposure management, and a host of transaction-based

interactions.

LEARN MORE

Related Research

Worldwide Financial Accounting Applications 20142018 Forecast and 2013 Vendor Shares (IDC #249818, July 2014)

Pivot Table: Worldwide IT Spending 20132018 Worldwide Risk IT Spending Guide, 1H14 (IDC Financial Insights #FI248401, May 2014)

Regulators, Banks Struggle with Risk Information Management (IDC #lcUS24738914, March 2014)

8 Essentials of Next-Generation Corporate Treasury Solutions (IDC #lcUS24600214, January 2014)

2014 IDC #251539e 11

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