Overall spending by US firms on execution management systems (EMS) and order management systems (OMS) added up to about US$1 billion by the end of 2006. Spending on EMS platforms, while still growing, accounted for about 18% of that figure. Total IT spending on EMS and OMS is expected to reach approximately US$1.2 billion by the end of 2010.
These are the principal findings of a new report by consultantcy Aite Group. It says leading EMS vendors have taken advantage of the rapid adoption of DMA and algorithmic trading to create a profitable marketplace. However, intense competition has emerged from all directions in 2006, says the firm – from broker/dealers, buy-side OMS vendors, and sell-side OMS vendors. In 2007, more industry consolidation is expected by Aite Group, especially as EMS vendors become even more attractive acquisition targets.
“In the end, the debate between EMS and OMS may become more of a fiction than a reality, as potential clients realize that ‘independent’ EMS vendors are harder to find than an un-conflicted broker service,” says Sang Lee, Managing Partner with Aite Group.
The new report examines key trends in the EMS versus OMS debate and profiles leading EMS and OMS providers in the market. It examines products and offerings from over 30 platforms that are aimed at the algorithmic trading market in particular, including independent as well as broker-owned EMS platforms, sell-side OMS platforms, and some buy-side OMS platforms too.