Why seems TMS market leadership to be a relay race?

| 23-11-2016 | Pieter de Kiewit |

The number of treasury management software brands I read about in resumes since 1996, the year of my first treasury placement as a recruiter, has continuously grown. In other markets market dominance has been more stable, BMW, Microsoft and Calvé have been able to keep long market leadership. What is so different in the TMS market? Without comprehensive research I can think of the following reasons.

TMS technology reasons

Technology is moving forward very quickly. Solutions are often based upon the possibilities new technology offers and not developed based upon client needs. Different backbone technology often comes with other providers, hence other TMS suppliers.

Integration after take-over

There is a number of small solutions that grew to be successful over time. The founders of the companies that offer these solutions often choose to sell after a number of years. This because they are technology driven and cannot handle the marketing and operational hassle. Or the other way around: after successful sales they have to build a better product and do not have the technological staff. Or they just want to cash. The bigger companies that take over are not capable to absorb the smaller without losing the warm connection with the clients. Service and flexibility go down, prices go up. Sales staff is demotivated after a setback in remuneration. Support does not know the application. The clients go to the next supplier.

Marketing reasons

Last but not least, successful start-ups that work with partners in various countries are not able to share the wealth of success. Discussion over equity, profit sharing and ownership are often deal breakers. In this market there is not one dominating expansion strategy that has been the success formula: own staff is not strong enough or too expensive, partner sales is often not based upon enough commitment or lacks a proper contractual basis.

What do you see in the market of TMS suppliers?

 

 

 

Pieter de Kiewit
Owner Treasurer Search