While Conject reassures its customers, competitors (past and present) react to Aconex’s acquisition of the Europe-based SaaS collaboration vendor.

After the 17 March 2016 announcement of Conject‘s acquisition by Aconex, the UK business’s managing director Steve Cooper sought to reassure the company’s SaaS construction collaboration customers and users about the business’s future. In an email (18 March), he says:

The merging of Conject with Aconex creates a significant and positive development for our customers and users, wherever in the world they are located. Together with Aconex, we become a truly global provider:

• Strong footholds in all of the world’s largest construction markets
• Strong and proven teams in client service, sales and management
• Product engineering teams that provide deep knowledge of market needs in areas like BIM, Cost Management and NEC Contracts
• Ability to scale faster, innovate better and to support our largest customers wherever opportunity takes them

Whilst this marks a period of change, rest assured that we will continue to invest in and support existing Conject products and services.

Competitor reaction

I canvassed opinion among some of the competitors in the market. Tony Ryan, CEO at Asite said:

Is it a game-changer? “It’s huge and has a very exciting outcome, but it was only a matter of time.  When Aconex raised their last round of funding they were expected to acquire.  I spoke with Leigh about this at the time – I’m just surprised it took so long.”

Challenges? “Management change, client reaction and obviously the headache of technology synergies and integration.  That’s assuming they keep the code and blend it. We’ve seen what happened to 4Projects recently.”

Valuation? “Totally undervalued.”

Steve Crompton, CTO at Business Collaborator said:

“As one of the leading CDEs available, GroupBC is delighted to see that our once niche industry has matured to such an extent that acquisitions of this scale are now happening.

“It is a privilege to witness the continued growth and evolution within the sector we helped to create, and we await with interest the outcome of this union and wish both companies well.”

Former Conject CEO

Colin Smith, co-founder of BIW Technologies, and, for three years, CEO of Conject Holdings told me:

“The deal set off some strong feelings. I founded BIW Technologies and was CEO of Conject for three years of intense change. It was a memorable experience and I retain many good friends among its colleagues and customers.

I always believed that one company would emerge as the dominant player. Of course, I originally hoped it would be BIW, but great credit to Leigh [Jasper] and Rob [Phillpot] for taking Aconex into that market leadership position. I think it’s great news for Conject customers and staff, and also a very good deal for Aconex, its customers, staff and shareholders. I can’t see any current vendor coming close to rivalling what the two combined businesses now offer.”

Combinder is solely focused on close-out PDF documentation, providing an alternative to SaaS collaboration vendors offering O&M compilation tools as part of a wider system.

The compilation of operation and maintenance information for handover to the owner/operator of a built asset used to involve retrospective collation of large volumes of documentation, with much of the information duplicated across different sections, and often more than copy of the whole O&M manual needing to be delivered.

Early electronic O&M creation

Almost as soon as project teams began to deploy electronic document management systems or Software-as-a-Service ‘extranets’, they began to look at how these might additionally be deployed for handover information. In 2002, the UK’s BIW Technologies* (now Conject, recently acquired by Aconex) was one of the first SaaS vendors to develop functionality that allowed the concurrent compilation of the core element of UK handover documentation, the Health and Safety File.

Almost a decade later, in August 2011, Aconex entered into a partnership with Grazer, an Adelaide-based business specialising in the production and handover of post-construction O&M manuals for clients in Australasia. In June the following year, Aconex acquired Grazer, and in February 2013 launched Aconex Smart Manuals.

BIW/Conject and Aconex were not unique in providing O&M functionality – most of their AEC SaaS collaboration competitors have developed similar functionality. In addition, London construction consultancy Dome Consulting launched Dome Connect, extending the company’s expertise in commissioning management (post); Zutec also built on its O&M compilation expertise to develop a SaaS manuals capability (post); McLaren acquired CAFM Explorer in 2011 to give it a seamless design-to-FM offering (post); and in 2014, I talked to another UK-based provider, Edocuments (post).

Combinder

In short, this requirement is already being targeted by several SaaS technology vendors, but that doesn’t mean there isn’t room for others. I was recently contacted by Brenton Wiberg, a partner in California, US-based Combinder. He told me Combinder was ” founded on the pain that general contractors were having at project close-out and how to deal with the O&M Manual data.” He continued:

The traditional 20 binders full of printed cut sheets seemed, and rightfully so, archaic and unfriendly to the environment.  So contractors started providing this information on CDs or thumb drives.  Owners though didn’t seem to use this and still insisted on printed copies.  At some point the advent of “digital dashboards” came in to play which, when paired with an iPad, made the digital versions of the close-out documents much easier to use, but much trickier for the contractor to provide. This is where we stepped in for some generals, but a lot are using Bluebeam for this while others aren’t doing anything at all.

Combinder specialises in organising, hyperlinking, and indexing digital construction close-out documents into a clean, easy-to-use mobile interface, creating a hyperlinked PDF deliverable. It aims to “make it simple for construction managers to deliver LEAN digital operations and maintenance manuals and even simpler for facility managers to use those documents.”

And it makes a virtue of being economical: “There is no proprietary software or perpetual maintenance fees necessary to view your digital O&M, just our relatively small, onetime fee, making Combinder one of the cheapest options available” (pricing here).

[* Disclosure: I was an employee of BIW Technologies from 2000 to 2009. pwcom.co.uk has since undertaken consultancy work for Conject.]

Australian start-up Zuuse ambitiously aims to shake up the facilities management market, bridging the gap from BIM to FM.

While we have seen a considerable shift over the past 20 years from mainly on-premise management of documents and drawings to management of information ‘in the cloud’, the focus tended to be on accelerating the once largely paper-based design and construction processes, not on the rest of a built asset’s operational life.

Moving towards FM in the cloud

With a few honourable exceptions (some mentioned in the previous post about Combinder), the opportunity to extend re-use of electronic information held by SaaS collaboration vendors beyond commissioning and handover has tended to be overlooked. Now part of Aconex, Conject (with its infrastructure lifecycle management, ILM, strategy and a portfolio including FM solutions), and competitors McLaren Software (acquiring CAFM Explorer) and iSite (promoting its ‘Assetology’ Hub approach since 2012)* all looked to be moving towards so-called ‘cradle-to-grave’ information management, but most of their rivals have largely focused on project delivery rather than the follow-on asset lifecycle management.

The ongoing digitisation of construction – evidenced by growing adoption of collaborative Building Information Modelling (BIM) and of mobile solutions, plus increased use of sensors and ‘internet of things’ (IoT) – surely leads logically to the eventual digitisation of operation and maintenance and of facility management. I say “eventual” as, clearly, many FM colleagues will first need to inherit models and associated data created by designers and constructors (though, of course, there is also an opportunity for FM professionals to be in at the start, defining owner/operator’s information requirements so that project delivery concurrently creates the data they will need to manage the resulting built asset).

What will also be needed will be FM tools that can take relevant data from BIM and provide similarly agile cloud-based support for collaborative operation and maintenance processes, with built asset records routinely updated in real-time throughout the asset’s lifecycle. Many FM solutions tend to be traditional on-premise solutions (notable exceptions include Qube Global, and SWG’s QFM, while Planon includes a cloud service alternative), but to date I’ve seen few vendors actively marketing cloud-based BIM-to-FM solutions (though Graphisoft’s ArchiCAD cousin ArchiFM springs to mind). The market is therefore ripe for some SaaS disruption.

Enter Zuuse

So I was interested to hear from Australia-based SaaS FM startup Zuuse. This company, with offices in Brisbane and Melbourne, provides “an asset lifecycle solution blending 3D BIM capability, mobility and information management.”

Zuuse has also recently acquired another FM software company, BEIMS, further consolidating the Australian FM software market in the process (news release). According to Jason Lilienstein, Zuuse’s CEO:

“The landscape is rapidly changing. There is a large, growing market that is traditionally underinvested. Total IT spend on facilities management worldwide is forecast to grow from $24.6b in 2014 to $43.7b in 2019. There is enormous opportunity in the existing, fragmented, market. Asset owners are demanding new and innovative ways to manage their buildings and infrastructure. There is currently no product in the market that spans the complete asset lifecycle. It’s populated by a myriad of fragmented products, producing silos of information that, whilst useful, do not deliver the building owner, as the ultimate client, what they need.”

Zuuse says it has brought these together in a suite of modules and mobile device apps that can provide standalone or fully integrated functionality. Customers can pick and choose what they need, all delivered on a simple pay-as-you-go SaaS basis. It says it is taking BIM into FM and with mobile apps allowing FM teams to perform everyday tasks easily in the field, with “ground breaking technology, including Zuuse Qube, a 3D visualisation and data app built on the Unity gaming platform” (another video; no connection with the afore-mentioned Qube Global).

BEIMS deal

BEIMS provides FM software to 120 customers and is used in over 15,000 buildings including hospitals, universities, airports and commercial buildings throughout Australia, New Zealand and the Middle East. Customers include Australian Red Cross, Mater Health, Monash University, Wellington Airport and Sky City Casino. Garry Busowsky, founder of BEIMS, says:

“By combining newer innovative offerings like Zuuse, with established solutions like BEIMS, customers can benefit from new world technology alongside the depth and solid reliability that comes with experience. This acquisition also gives our existing clients a clear pathway into new technologies with the reassurance that the functionality that they have grown to depend on is running at its core.”

* A note: In past years, I have reported regularly on iSite’s financial performance (most recently in September 2015). However, following changes to parent Styles & Wood’s reporting practices, iSite’s results are now reported alongside other businesses in “Portfolio Services”, so we now have less visibility of its performance.

Viewpoint CEO Manolis Kotzabasakis says construction needs to change, and believes his company is well-placed to lead industry adoption of SaaS-based ‘field to back office information on the go’.

Following Aconex’s recent acquisition of SaaS construction collaboration rival Conject, there was – as usual – some debate about the implications of the deal for other vendors in the space. Some commenters (example) suggested that Aconex competitors such as Portland, Oregon, US-based Viewpoint would now struggle, and hinted at redundancies in Viewpoint’s UK operation, management changes and poor business performance.

Such views were robustly rejected when I spoke last week to Manolis Kotzabasakis – who succeeded Jay Haladay as CEO of Viewpoint in August 2015 (post) – and other senior Viewpoint executives.

Transformation and IT consolidation

Manolis, who started out as a chemical engineer working in the UK (he studied at Manchester University and was CEO of Northwich-based Linnhoff March in my home county of Cheshire for a time), was recruited to Viewpoint from Aspen Technologies where he rose quickly through the ranks from a marketing role to chief technology office. During his time there he was involved in over 20 acquisitions and saw at first hand how technology could transform business processes in traditional industries (in this case, in the process manufacturing sector).

He told me he had been excited about the potential to help construction businesses experience the same kind of transformation – “construction is one of the last major verticals needing to change” – and not just large corporations but SMEs too. He had also witnessed how the process plant industry’s IT sector had gone through a spate of M&A activity, and felt the AEC sector was already starting to see a similar rationalisation to a more select group of major players.

Viewpoint management changes

Appointed in March 2014, EMEA MD Alun Baker has now left the business following changes intended to create a functional, rather than regional, reporting structure across the Viewpoint group, Manolis said.

“Viewpoint, as a company, has been very successful given its scale, but needed to change. We had various individuals – like Jay – looking to retire or move in a new direction. Moving from regional reporting to functional reporting is the right structure for Viewpoint. Most of the significant changes have been in the US; Alun’s departure was the only significant change in the UK – he had also felt it would be better if he moved.”

Steve Spark, commercial director for EMEA and global SVP Sales, now leads the UK operation, while taking responsibility for collaboration and Field View sales in the US and in Australasia. He said headcount in Viewpoint’s EMEA region (largely comprising the former 4Projects business) grew 27% from 2014 to 2015 (some of this increase can be attributed to the December 2014 acquisition of Mobile Computing Solutions); more recently, at the end of March 2016, total headcount was up 10% from March 2015.

“We are very excited about the pick-up so far, and believe there are some big opportunities for us in the US,” said Manolis.

Acquisitions being eyed

He also said Viewpoint had been winning some collaboration deals in Australia despite Aconex’s supposed domination of its domestic market. He felt Aconex’s Conject deal was the latest sign of consolidation in the AEC software market, and said Viewpoint is looking at potential acquisitions, continuing:

“Our vision is to bring together the field with the back office. I have been excited to talk to some of our major US customers and find they share this vision. They feel integration is vital, and want our combination of collaborative tools and BIM. They want information on the go – whether on the project site or in a hotel room. Some are not ready yet for the cloud; some want it today.

“It is slightly different with ERP, so we may progress with public/private or ‘hybrid’ cloud provision of back office ERP. This is currently mainly a US challenge; we are not providing ERP in the EMEA region yet, so here we are following an integration strategy, helping our customers connect Viewpoint collaboration to back office ERP from COINS and other leading vendors. The API becomes very important to us.”

Viewpoint For Projects successes

EMEA CFO Chris Baty said the UK-based collaboration product had seen growth accelerate in 2015, with the acceleration continuing in 2016. Steve Spark underlined the company’s success in securing corporate deals:

“Looking at 1,840 deals reported by Construction Enquirer, worth around £25 billion, we are working with 95% of the top 20 contractors, and 50% of these solely use ViewPoint For Projects for all their projects. Looking at our Field View customers, 20% of these are on enterprise deals, with 20% using both products.

“We are also seeing growing interest below the Tier 1 contractors: subcontractors down the supply chain are becoming increasingly interested in using Viewpoint for collaboration – BIM has been a strong catalyst for this – and we now have a sales team dedicated to working with specialist contractors.”

Summary view

Manolis summed up the conversation:

“We now have the right people in place and we have got the basics right. Growth is accelerating and profitability is very impressive across the business, and we are encouraged by the EMEA growth, with UK growth particularly impressive. New SaaS bookings are up 50%, which will translate to later revenues – all a strong testament to Steve and his team.”

Commentary

The post-Aconex/Conject comments seemed mainly to reflect the views of bullish Aconex advocates and/or mischievous competitors. The SaaS collaboration sector is also small and incestuous, with a lot of movement between the different firms, so it is inevitable that individuals with axes to grind will sometimes take the opportunity to suggest changes are hampering, rather than helping, a rival business.

Viewpoint is a sound business with ambitions to expand use of cloud-hosted BIM-driven collaboration in its core north American market while simultaneously capitalising upon its UK business’s strong footprint to grow brand awareness and eventually sales of its ERP platform in new markets. From his time at AspenTech, Manolis Kotzabasakis has strong experience in building and extending the reach of an international software business, and Viewpoint’s strategy is strongly supported by Bain Capital who made a US$230 investment in the company two years ago. Viewpoint remains an ambitious and well-backed player in the construction software space, with a strong BIM product and wider and scalable SaaS strategy, and so well placed to capitalise upon the growing adoption of such technologies by both construction businesses and asset owners.

The tripling of Aconex’s share price since its December 2014 IPO has helped draw attention to the construction software space and there have been several large investments in the sector (in the last two years, US-based Procore, for example, raised $15m in June 2014, $30m in April 2015 and another $50m in December 2015), and Aconex’s Conject deal and capital-raising shows continued appetite among investors. However, some investors are also urging caution, particularly in relation to M&A activity – mentioned by Manolis.

Research by Deutsche Bank analysts (reported in the Australian Financial Review), for example, suggested M&A can be both a driver of earnings but also a potential risk due to possible overpaying for assets and integrating purchases; it said Aconex’s growth strategy “involves opportunistic assessment of acquisitions which presents pricing and integration risk.” And such risks can also be particularly acute in the notoriously cyclical construction sector; as we saw with the Global Financial Crisis, an industry downturn can quickly impact the revenues of businesses reliant upon a steady stream of project starts.

[Disclosure: Unrelated to this blog post, I will be speaking at the Viewpoint UK user conference later this month.]

Latest results from Aconex (UK) Ltd suggest the March 2016  Conject acquisition was timely, with the Australian giant’s European operation lagging behind regional rivals.

I have monitored the performance of Aconex’s UK-based operation, Aconex (UK) Ltd for some years (since at least 2007). The Melbourne, Australia-based parent company has made great strides to become the dominant SaaS ‘pure-play’ vendor in the global construction collaboration market, but in the UK – arguably, the most mature, sophisticated and competitive market for AEC SaaS collaboration – it has historically lagged behind indigenous competitors such as 4Projects, BIW (now Viewpoint and Conject UK respectively) and Asite. Aconex has also fared less well than rivals in the mainland Europe market.

But direct comparisons are also difficult. Despite its name, Aconex (UK) Ltd has not derived most of its revenues from the UK, but from operations in mainland Europe and neighbouring regions such as north Africa (it has an Algerian subsidiary, for example).

Revenues for the year to 30 June 2015 were up 9% from £2.74m to just over £3m, but 2014’s pre-tax profit of £0.357m turned into a small loss (around £18k). While 72% of 2014 sales were from non-UK projects, the figure for the year to June 2015 was 63%.

Aconex’s single-digit European performance therefore lags behind those of its rivals. Over the same reporting period, Asite (post) grew revenues by 12%, while Conject UK earlier grew 13% (post), Viewpoint UK-only revenues were up 14% (post) and Munich, Germany-based think project! reported in February (post) March that its 2015 revenues grew 33%.

Of course, Aconex’s European performance will change dramatically following its acquisition of Conject in March this year. The Conject deal was partially justified on the basis that it would significantly increase Aconex’s market penetration and user network throughout Europe. These latest results suggest such a strategic move was necessary to accelerate the relatively slow organic growth achieved by its existing operation.

Almost exactly three months after Aconex acquired the Germany-based Conject business (post), the latter’s near-neighbour in Munich, think project!, has ac­quired 70% of its Aus­trian sales part­ner i-pm GmbH.

Founded in 2004 and solely marketing think project!’s SaaS-based construction collaboration across Austria, i-pm will shortly rebrand to be­come think project! Öster­re­ich (Aus­tria). MD Michael Jug will retain re­spon­si­bil­ity for the Aus­trian mar­ket and his team and lo­ca­tion will re­main un­changed.

think project! believes the deal will in­ten­sify growth – both within Aus­tria and in­ter­na­tion­ally through its Aus­trian cus­tomers – and ex­pand its mar­ket pres­ence sig­nif­i­cantly. The deal is the latest in a series of deals which have seen think project build stakes in var­i­ous Ger­man com­pa­nies (eg: Eplass, planConnect), plus French PLM business, Lascom AEC (post).

CEO Thomas Backhmaier says:

“The Aus­trian mar­ket is an im­por­tant core mar­ket for think project!. The pres­ence of in­ter­na­tional and re­gion­ally in­flu­en­tial con­struc­tion con­trac­tors, glob­ally ac­tive en­gi­neer­ing com­pa­nies and par­tic­u­larly pub­lic in­fra­struc­ture clients such as AS­FI­NAG (Aus­trian mo­tor­way op­er­a­tor) and ÖBB (Aus­trian Rail­ways) make Aus­tria a mar­ket with ex­cep­tional de­vel­op­ment po­ten­tial for think project!.”

Michael Jug, MD of think project! Öster­re­ich, says:

“With its ro­bust tech­nol­ogy and strate­gic fore­sight, the think project! Group was the foun­da­tion for our suc­cess from the very start. We are very pleased to now be a part of this strong group of com­pa­nies and, as a re­sult, can see op­por­tu­nity for con­sid­er­ably ex­pand­ing the mar­ket po­ten­tial and fur­ther grow­ing – both within Aus­tria and in­ter­na­tion­ally through our Aus­trian cus­tomers.”

The deal reminds us that, despite its Conject deal, Aconex still faces strong competition in the central European market. As well as think project!, Stuttgart-based RIB is also strong in cloud-based collaboration, having acquired Australia’s ProjectCentre in 2012 (post) and Denmark’s Docia in July 2014 (post).

Almost since we first started to use mobile phones on construction sites, we have sought to use them to manage defects and conduct inspections (I was at BIW, later Conject, when it launched its Windows app in 2006). As a result, over the past 10 years, and particularly since the 2007 advent of the iPhone and other smartphones, I have seen and written about numerous construction-oriented quality control, defects management, site reporting and ‘punchlisting’ and ‘Field’ applications. Some are tightly integrated with Software-as-a-Service construction collaboration platforms that deliver wider functionality; others are more “point solutions” designed to support particular key processes.

Enter TIM

Falling into the second category is TIM: The Inspection Manager. Director Paul Miller tells me that the Southport, UK-based company has been developing mobile data gathering apps since about 2008. Its first TIM product (The Inventory Manager), targeted the residential property inspection market, while The Inspection Manager was launched just over two years ago, and its report templates or survey schedules can be customised – by TIM’s technical support team – to suit any sector (I was shown examples from civil engineering and facilities management, for example).

These customised surveys (delivered on iOS, Android or Windows devices) can include mandatory or optional questions, with built-in guidance notes attached to each question. If needed, survey results can be scored in the background, and actions or recommendations specified. Paul summed up the on-site benefits of TIM:

• All text content is entered in to the pre-designed report template sections, using the mobile device keypad, mandatory questions can be included to ensure the forms are filled in correctly.
• All images captured on the device camera are embedded into the final report with geo-tagged location co-ordinates, along with date and time stamps.
• The digital report can be downloaded in a choice of formats (PDF, CSV or XML file) for printing or sharing with clients and project teams within minutes of being completed.
• The templates are designed to comply with all the necessary regulations/legislation, and health/safety.
• Your documents are backed up to fully encrypted and secure cloud based servers.
• Base data (job type, WI number, Surveyors name, etc) can be imported from excel or CRM systems, that automatically synchronise with the devices.
• Guidance Notes can be added to any question which can show information on how to answer.

The application is available on a monthly subscription tariff (for up to 10, the cost is £50 per month per registered device, with three customised templates included in the deal; for a single user, to register just 1 device to use 3 templates on an unlimited basis is £100 per month). TIM also offers the option to purchase a 5-year licence, with the hosting software installed onto clients’ own system/s.

Competitive comparisons

TIM is competing in a busy market. Disregarding (for now) the SaaS providers delivering inspection as part of a wider offering (Viewpoint, Aconex, Conject, Asite, etc), TIM is also up against some mature UK point solution competitors including SnagR, Dome’s iSnag, Kykloud and GoReport (both the latter offering RICS approved survey reports – post), plus near continent offerings from Finalcad (post), among others.

The core TIM functionality appears little different to its competitors; like Kykloud it claims a 50% time reduction in building survey times, but Kykloud also offers customers the option of designing their own surveys to more exactly meet customer needs rather than templates being created by the vendor, while GoReport also offers some integration with other devices. However, while TIM and Finalcad are available across three operating systems, both GoReport and Kykloud are iOS only.

Kykloud and (particularly) Finalcad are also working hard to support BIM-related processes and long-term asset management, and even – in the case of Finalcad – embracing ‘Big Data’ and leveraging business intelligence reports to set industry benchmarks (post). In this respect, Finalcad appears the most forward-looking of the point solution data capture applications.

Update (8 July 2016) – A note from Paul Miller: “we have licensed the Inspection Manager software to ‘the Warehouse Auditor’ which targets the warehousing/logistics sector. This Wednesday at the Dorchester Hotel we won the ‘Technical Innovation’ of the year award.”

Last week’s ThinkBIM conference focused on the transition of data from construction to facilities management. FM is getting more involved with BIM from the earliest stages of a project, and will collaborate more frequently during project delivery.

The latest ThinkBIM half-day conference (on 6 July at Squire Patton Boggs’ new offices in Leeds, and sponsored by Trimble and construction collaboration vendor GroupBC, formerly Business Collaborator) looked at the use of building information modelling by those working in facilities management, operations and maintenance for owner-operator organisations, and yet – on a show of hands – only a small handful of attendees were actually employed in FM. The day therefore repeatedly returned to what government and industry needs to do to get more FM professionals engaged with BIM.

The government push on BIM for FM

The business case for BIM has been well made by the UK Government’s BIM Task Group since 2011. Keynote speaker Deborah Rowland (currently director of FM at the Ministry of Justice) has been at the forefront in pushing the BIM for FM message in the public sector. Citing Government Soft Landings (GSL), she underlined how asset management is fundamental to BIM-enabled project delivery, with client facilities managers involved from a project’s inception in helping to define the employer’s information requirements (EIR) and asset information management (AIM) needs.

PAS 1192-3 covering information management in the operational phase was published in March 2014, and since then advice, standards and protocols covering FM inputs to BIM and beyond have expanded. Deborah highlighted recent useful additions, notably a RICS-developed NRM3 dLCC (digital lifeycle cost) toolkit which aligns BIM with SFG20 maintenance information needs (more about SFG20 here). The MoJ’s BIM2AIM group also recently launched a suite of documents providing clear and concise instruction and guidance on how to define, procure and deliver Level 2 BIM projects (read BIM+ news).

The MoJ’s strategy envisages such tools providing, among other things, much-needed transparency and evidence of value for money to taxpayers, while providing the MoJ with key information to make strategic decisions on its asset portfolio, to innovate, and to continually improve. Surely, many other client organisations will want to reap similar benefits?

“Keeping the BIM live”

The second keynote came from CAFM software vendor FSI’s Jacqueline Walpole. She recalled how many FMs were once a paper-based afterthought. Typically, for the client or owner-operator, the completion of a built asset was followed, nine months later, by the handover of a large paper-based archive of information, much of it in paper-based form, some of it already out-of-date (it was for this reason, I remember, that BIW Technologies – later Conject, now Aconex – was one of the first collaboration vendors to digitise the production of the Health and Safety File, work initially undertaken in partnership with retailer Sainsbury’s in 2002 – post).

Computer-aided FM (CAFM), therefore, often tended to start from scratch. Digitising design, construction, commissioning and handover processes, she said, opens up the prospect of a digital flow of information into FM (“keeping the BIM live”), achieving operational readiness almost instantly, and Jacqueline highlighted the publication of a new BIFM guide (available here) to achieving such readiness, which includes an EIR template.

The two short keynotes, therefore, promoted readily available toolkits, guides and templates showing how BIM can be applied to support FM, and, in so doing, to enhance the roles of facilities managers. I would expect collaboration/’common data environment’ (CDE) vendors to be looking to incorporate elements of these templates into their workflows and reporting tools to support clients’ facilities managers.

Data for operation and maintenance

Two of the afternoon’s roundtable workshop sessions underlined the potential value of data to help managers improve the performance of their assets and to connect their built asset’s data with valuable data held in other systems, but recurring themes about people and silo cultures also surfaced.

Jacqueline Walpole chaired one of the roundtables. She got delegates to consider, first, what data might be needed to support asset operations (with a nod to ‘lean’ thinking: “if in doubt, ask the caretaker – what are their ‘must haves’?”), and how some data schemas manage simple issues such as floor-numbering.

Second, we talked about how in-service performance data might be used to support asset management. Applying analogies including cars and jet engines, we talking about creating and maintaining a built asset’s “service history,” and using the data generated by different building systems’ sensors to improve reliability and energy efficiency. Just as Rolls-Royce routinely collates huge volumes of data from every engine and flight as a basis for meeting its customers’ service level agreements, so facilities managers could collate and analyse built environment data (energy use, temperature, humidity, heating, lighting, equipment use, etc, over time) to support post-occupancy evaluation, optimise lifecycle cost efficiency, and – for ‘repeat clients’ – provide data to help them collaborate with design teams to improve the planning, design, construction and operation of future built assets.

Linked data for better decision-making

GroupBC’s Steve Crompton led a roundtable pondering trust issues and other reasons why construction project teams have tended to re-key rather than re-use data. Conflicting standards, industry inertia and resistance to major people and process-related changes quickly cropped up. Old attitudes of ‘knowledge is power’ need to be overcome, as does distrust of ‘other people’s data’ (“We don’t trust digital data yet, because we haven’t moved on from distrusting paper information, or stuff off the web”). This workshop also highlighted some of the messages from June’s ThinkBIM ‘twilight’ event (read my post: Open Data, BIM and the semantic web) – semantic web technologies can help connect data about built assets to other data about the environment and about social aspects of the areas around those built assets. However, security, commercial confidentiality and personal privacy concerns all need to be addressed in selecting what data might be shared and used.

Finally, delegates heard a ‘RetroBIM’ case study from BIM Academy’s Graham Kelly, relating to the compilation of data to support improvement works undertaken at Sydney Opera House in Australia. That a UK-based firm led this project is another indication of how UK BIM experience is prized by clients worldwide, and there is clearly potential for UK FM businesses to similarly become world leaders in applying BIM to FM – though Graham was cautious about some software businesses: “BIM software companies have raised uninformed expectations,” he said.

The conference talked about the return on investment (ROI), but also highlighted it is not only a technological change. ‘Silo cultures’ and ‘change management’ were two of the key risks on Graham’s project. The same people and process themes were voiced in the workshops, and they apply equally to the wider adoption of BIM – and not just by the FM community.

[Disclosures: This is an edited version of a post first published on the ThinkBIM blog, delivered as part of consultancy support for Leeds Beckett University. Separately, I have also delivered consultancy services to GroupBC.]

UK-based startup Secure Cloudlink (headquartered in Leatherhead, Surrey) has a unique and US-patented product that eliminates the use of passwords and is designed to secure cloud / SaaS applications.

With Secure Cloudlink, each user is uniquely identified and authenticated, but as no user credentials are stored or replicated behind the scenes the risks of security breaches due to password interception or hacking are eliminated. The technology also eliminates the time costs involved in resetting passwords.

Eliminate security objections to Cloud

Secure Cloudlink CEO Brian Keats (ex ITExact, Colt Technology and Citi) says:

“Security is regularly cited by end user organisations as an objection to Cloud, so it should come as little surprise that it recently topped the list of end users’ concerns in recent research from the Cloud Industry Forum. According to the research 61% of end user organisations questioned stated that security was a significant concern in the adoption of Cloud services within their organisation.”

Password and identity sharing is also difficult to monitor and manage for SaaS application providers and end user organisations, and adds to costs. According to the Gartner report ‘Design IT Self Service for the Business Consumer,’ password resets account for as much as 40% of IT service desk contact value.

Although some organisations are investing in technology to automate password resets to reduce the number of calls, user credentials still persist, exposing the organisation to the threat of cyber attack. At Secure Cloudlink our approach is to eliminate the passwords and streamline the granting of access to applications, IT resources and on-line services.”

Conventional SSO (single-sign-on) password management and biometric recognition systems remove passwords from the user perspective, but, behind the scenes, user credentials are still stored, transmitted and replicated. This can make them prone to ‘man-in-the-middle attack’ (Wikipedia) or interception.

Secure Cloudlink provides anonymised authentication to SaaS, cloud or on-premise applications without storing, replicating or transmitting passwords anywhere outside of the directory services. Using a patented token security system that operates without the use of passwords, Secure Cloudlink – SaaS Providers Edition (a slightly clunky name!) includes a SSO service and optional biometric or multi-factor user authentication to improve the end user experience. Network users can securely access multiple cloud services wthout even appearing to have left the corporate network.

Company founder Dave Worrall told me the solution had been in development since the mid-2000s, and in the past three years had been rolled out in several early adopter customers.

“We have been on a journey with these customers. Companies might start with authenticating one or more mobile apps, then look at their Active Directory, and then some desktop client applications. We have learned a lot from these deployments – in government, with SaaS providers, and in financial institutions – working with companies with over 60,000 IT users, operating in B2C and B2B markets. In these organisations, password resetting is quickly a thing of the past.

“We provide an easy way for an organisation to switch rapidly from one method of authentication reliant on passwords to one in which no passwords are transmitted or stored on any devices. We have also been looking at how we can make our solution attractive to end-users. Some education is necessary to ensure end-user confidence, but then we want to make it easy for them to onboard.”

Reaction

As Keats says, security has long been the main concern (often an objection) for potential Cloud customers and end-users, and ever since the advent of SaaS tools (or application service provision, as it was previously known) in the mid-late 1990s, SaaS vendors have had to educate the market about their security provisions. Working for a SaaS construction collaboration software vendor in the early 2000s, I wrote various briefing sheets and white papers outlining both the physical and digital precautions taken to safeguard the platform, associated data, and user interactions with them.

Passwords and SSL encryption became standard measures. Hosting on systems carrying BS7799 (later ISO27001) accreditation also offered an early marketing edge but gradually became the norm (achieved by, among others, BIW in 2006, Cadweb in 2007, Aconex in 2011, Kykloud in 2013, and think project! in 2014). But some organisations demanded more – for example, two-factor authentication using USB device RSA tokens has been an additional option offered by Conject and think project! (post). And customer and end-user security expectations are also influenced by advances in authentication provided by banks and other services, and by new hardware provisions such as mobile fingerprint or voice authentication.

For the SaaS vendors, Secure CloudLink technology potentially not only eliminates the need for user password management but also eliminates password sharing. This practice has a direct impact on revenues if vendors are charging per user (as some SaaS construction collaboration vendors do – others operate per-project or enterprise licensing approaches).

More importantly, password sharing also undermines compliance regimes, so Secure CloudLink can provide assurance that a SaaS platform user is a known and authorised individual, helping ensure an accurate audit trail of user access and interaction – vital in many highly regulated industries. (And as an additional incentive, Secure Cloudlink also has a referral program with the opportunity for SaaS vendors to earn incremental revenues!)

A Construction Index news story today about the Bank of England’s decision yesterday to reduce the central bank interest rate to 0.25% highlighted once again the UK construction industry’s poor record on prompt payment. It quotes the National Federation of Builders’s chief executive Richard Beresford: “The construction industry has the worst payment record of any sector, with 31% of all late payment in the UK. Construction SMEs are owed more than £30bn in unpaid invoices.”

According to the NFB, the interest rate cut will affect how late payments are calculated. The Late Payment of Commercial Debts Regulations 2013 allows companies owed money to charge interest at 8% of the debt plus the Bank of England base rate. With interest rates cut, the amount of money that creditor businesses may claim will also fall.

Previously, this would undoubtedly have caught the attention of construction payment (CPM) technology provider Textura Europe, but I didn’t spot any @Textura_Europe tweets from its Slough UK office.* However, this may be because the business, like the rest of Textura Group, has been adjusting to life under new owner, Oracle. The US tech giant announced in late April 2016 that it was acquiring Textura for US$663m (Textura news release).

Oracle’s Textura deal heats up collaboration battle

Oracle is, of course, no stranger to construction – in 2007 it acquired Cimmetry, developer of the popular Autovue browser CAD viewer plugin (later rebadged as an ‘enterprise visualisation’ tool), and its project management software Primavera is widely used in the sector. The acquisition of Textura’s cloud-based CPM services will extend the reach of Oracle’s cloud-based services, with some 85,000 contractors – mostly in the US – in the Textura network, and over US$3.4 billion in payments processed per month. Textura launched an Australian operation in 2012, and two years later appointed former Conject CEO Colin Smith to lead its European push, which focused particularly on subcontractor payment management and included a trade financing service (2015 post).

Oracle plans to integrate Textura with Primavera’s project, cost, time and risk management toolset in a new Oracle Engineering and Construction Global Business Unit. While I didn’t particularly consider Textura a key player in the construction collaboration market, the Oracle deal does open up some potentially interesting new battlefronts and/or integration opportunities.

For example, Oracle already has a cloud-enabled Primavera NEC3 toolset, which pits it against vendors of contract change management applications – both stand-alone solutions such as UK-based MPS, Sypro and CEMAR (formerly CMToolkit – post), and the NEC toolsets of SaaS construction collaboration platforms such as Viewpoint for Projects, the now-Aconex-owned Conject, and Asite (post). [Update (5 August 2016, 17:00 BST): Should also mention here Oracle’s Primavera Unifier which has NEC capability and links to BIM via Ecodomus (thanks, Mace’s Crawford Patterson); Ecodomus was also mentioned by Graham Kelly at ThinkBIM last month – post].

Textura already dominates the CPM sector in the US, and has made strong inroads in Australia (competition there includes Progressclaim – post) and begun to establish itself in Germany and in the UK (where OpenECX’s WebContractor is also competing). (A thought: could the Textura CPM and trade financing technology also be extended by Oracle to industry sectors outside construction?)

And the continued adoption of so-called ‘5D BIM’ where cost information is incorporated into the building information modelling process, could also open new contests, playing to Oracle’s strengths in cloud-based enterprise resource planning software, and pitching it against SaaS construction incumbents such as Viewpoint (post), Bentley Systems’ EADOC (post) and Aconex’s Worksite (post) and Conject financial control applications.

[* Disclosure: I have undertaken consultancy projects in the past year for Textura Europe.]

In the upFront.Zine, Ralph Grabowski has a great article about a cloud-based BIM checking service, BIM Assure. The feature was written with Marty Chobot, VP of marketing at the system’s developer, a startup called Invicara with offices in Michigan in the US, India and Singapore. The application was also reviewed recently by Lachmi Khemlani in AECbytes. I won’t steal the thunder of these two articles – go and read them! – but here’s a quick outline.

BIM Assure in a nutshell

Development of the browser-based product started in 2013, with the focus being on the ‘I’ in BIM (a phrase often heard at BIM conferences), looking to interrogate beyond the geometry in a model, and to ascertain if required information has been created and modelled correctly to meet different milestones during a project. While other model checkers exist (Solibri’s has been frequently mentioned at various events I’ve attended, and has formed part of the BIM offerings from SaaS collaboration providers Viewpoint and Conject, among others), Invicara says BIM Assure is the only cloud-based one – though it is not a pure browser-based tool: users have to download a plug-in.

Currently, there is only an Autodesk Revit plug-in. This enables users to publish models to BIM Assure’s servers (hosted by Amazon Web Services) and then pull data from BIM Assure back down into Revit, while templates help with basic checks on doors, walls and equipment. Invicara is looking at other integrations with BIM authoring tools, and “working with customers to decide which one will be next.”

Interestingly, pricing is based on consumption, not on number of users or amount of storage. Invicara provides an evaluation subscription so that customers can estimate how much they might use the service, and then charges for analysis with customers buying tokens to run their checks.

(Incidentally, the name reminds me of BC Assure, the compliance application launched in 2011 by GroupBC, formerly Business Collaborator, and which I understand is also being used by some of its customers to support BIM process compliance.)

Last month (23 August), Australia-based Software-as-a-Service construction collaboration software vendor Aconex announced its financial results for the year to 30 June 2016, revealing underlying organic revenue growth of 31%, with the acquisition of Conject (completed on 31 March 2016) boosting total revenue growth to 50%.

Total Aconex revenue was Au$123.4 million (c. US$93.3m, £70.1m, €82.8m), compared with Au$82.4 million for 2015. The revenue increase reflected strong organic growth and the contribution of Conject sales for the fourth quarter.

Aconex declared a pre-tax profit (EBITDA) of Au$13.6 million (c. US$10.2m, £7.7m, €9.3m), up 350% from 2015’s Au$3.0m, excluding acquisition and integration costs. Including costs of Au$4.1 million related to the acquisition and integration of Worksite (July 2015), the CIMIC Group’s INCITE Keystone collaboration platform (August 2015), and Conject, the EBITDA for 2016 was Au$9.5 million.

Aconex CEO Leigh Jasper said:

“Our financial results for FY16 demonstrated strong fundamental performance, driven by the consistent execution of our growth strategy. We continued to expand our global user network by winning new business from both new and existing customers, and to move existing customers from project engagements to enterprise agreements. We completed three acquisitions to further increase the value that we deliver to customers and consolidate our leading market position worldwide. With these acquisitions as well as organic sales momentum, we continued to scale the business for significant growth in profitability. The US$10 trillion construction industry is going digital, and we are at the centre of this digital transformation, connecting people and data to build the world’s infrastructure.”

International performance

Aconex reported profitable growth across all regions, with Australasia up 35% to Au$48.8m, compared with $36.2m in 2015. Revenues from the rest of the world were up 61% to Au$74.6m (2015: $46.2m). for FY15. Looking at specific regions, the acquisition of Conject had a significant impact on Aconex’s revenues, particularly from Europe and the Middle East, which were up 87% from Au$21.3m to Au$40.0m (excluding Conject, EMEA revenue growth was 31%). Revenues from the Americas were up 45% from Au$14.7m to Au$21.3m (excluding Conject, growth was 35%), while Asia revenues were up 30% (excluding Conject, 19%) from Au$10.2m to Au$13.3m.

In Aconex’s 2016 Annual Report, Jasper highlights opportunities arising from the increasing digitisation of construction, and talks about the company’s latest enterprise agreements (2016 saw deals with Fluor Corporation, ExxonMobil, and Burns & McDonnell – all strong US-based businesses – on top of similar deals done in 2015).

After Conject, more acquisitions

He also comments briefly about progress on the Conject acquisition (bought for a total cash consideration of Au$99.5m [c. US$75m, £56.5m, €66.8m), financed by a Au$120m institutional placement):

“The integration is tracking well. Staff and customers are engaged, and our key operational systems, processes and policies are aligned. The Conject and Aconex cultures are highly complementary, and we look forward to what we can achieve as one company.”

The Australian Financial Review reports (Aconex boss tips tech sector to become more dominant on the ASX)
Jasper said the company would probably make more of these sorts of acquisitions in 2016/17:

“There is a lot of work still to integrate Conject, but we are still in a range of discussions with companies, especially around technology bolt-ons. But in terms of large acquisitions, we’re focused on bedding down Conject and then we’ll look at what we want to do longer term.”

Smaller acquisitions could be financed from existing resources, he said, but another heavyweight takeover would be a different matter, The Australian reported. “Clearly if we were to do more acquisitions we’d need to go back to the markets, but we’ve got $50m on our balance sheet and we’re generating cash.”

Stock market analyst reaction to Aconex’s results varied from cautious to bullish (reported Motley Fool Australia). Credit Suisse analysts cut their recommendation on Aconex to ‘neutral’ from ‘buy’, citing concerns over the company’s guidance (Jasper’s medium term view is of revenue growth of 20% to 25%, and an EBITDA margin between 11% and 16%). Citi, on the other hand set a share price target of Au$8.91 (compared to a results day close of Au$7.78), believing there is still strong growth to come.

Product development

On product development, Jasper talked about Aconex’s cost management module (Aconex Connected Cost), added as a result of the Worksite acquisition: “The new module was rolled out to selected customers this year in preparation for full commercial availability in FY17. Feedback has been positive, and the inclusion of cost control in our platform has led to new collaboration business.”

Munich, Germany-based SaaS construction collaboration technology vendor think project! has established a joint venture with Madrid-based ProjectCenter to target customers in Spain, Portugal and Latin America. According to a think project! news release, it will hold a majority stake in think project! Iberia.

ProjectCenter back story

As previously described (March 2013 post), ProjectCenter started life in the late 1990s as one of a suite of products developed by Bricsnet, which eventually became a wholly-owned subsidiary of Spain’s Torimbia group in 2010. Bricsnet’s FM or IWMS interests were then acquired by Manhattan, with ProjectCenter becoming the principal brand of a company mainly operating in the Iberian peninsula, plus parts of north Africa and south America. When I talked to the business three years ago, Cristina Niculescu said it had projects across 40 countries.

Today, think project! says ProjectCenter customers include Acciona, Bouygues, Enel Group, IKEA, Mercadona, Neinor Homes, TecnicasReunidas, URS-Aecom and Valoriza, with projects in Spain and overseas.

Amalgamation

Think project! Iberia amalgamates the previous Spanish think project! office and ProjectCenter. The joint venture will be led by Iván de la Guía Prados (formerly think project! in Spain) and Cristina Niculescu (formerly ProjectCenter). The news release says the joint venture represents “yet another robust entity within the context of the international expansion strategy of think project!. It will also underline the continued development of the company’s market-leading position in Europe.” (The company also recently announced the opening of a research and development centre in Poland). Hans-Jörg Klingelhöfer, head of international markets at think project! says:

“We see Spain as one of our core markets, in which we’ve been successfully engaged since 2006. The presence of strong and internationally-active general contractors, engineering companies and consultants, as well as private and public asset owners, makes Spain a market with great development potential for think project!. In addition, we plan Madrid as our hub for opening up the Latin-American market.

Iván de la Guía Prados, managing director account management of think project! Iberia, explains:

“We are significantly increasing our market presence within the Spanish market thanks to this joint venture with ProjectCenter. It will enable us to pool the mutual experience and operations of our Spanish and international project businesses to contribute together towards the growth of the think project! Group.”

Cristina Niculescu, managing director technical account management of think project! Iberia adds:

We are very excited about this alliance and delighted to join the think project! Group. It is a great opportunity to expand our market and the reach of our services by offering world class cross-enterprise collaboration and delivering technical innovations in the construction and engineering industries.”

Competitive view

The think project! announcement is a timely reminder that Aconex still faces strong competition in the mainland European SaaS construction collaboration market despite its acquisition of think project!’s Munich-based Anglo/German rival Conject earlier this year (post) – a deal which helped boost Aconex’s EMEA earnings (post). The think project!/ProjectCenter JV also marks another step forward in the rationalisation of the SaaS collaboration market in Europe.

Think project!, which achieved revenue growth of 33% to €25.4m (c. £19.8m or US$28.4m) in the year to 31 December 2015 (post), has a strong position in its central European homelands of Germany, Austria and Switzerland and has been expanding its reach into neighbouring countries. Just over a year ago, it acquired 60% of France’s SaaS PLM specialist Lascom (post); in June it acquired its Austrian sales partner (post), and earlier this month it opened a new Polish development base in Szeszin.

Also based in Germany, in Stuttgart, is RIB Software. In 2015 (according to its annual report, PDF), it generated €12m in SaaS revenues, up from €8.7m in 2014 (a significant proportion of this growth was due to the full-year contribution of its 2014 acquisition of Docia/Byggeweb); it has grown its SaaS revenues largely through acquisitions – Australia’s ProjectCentre in 2012 and Denmark’s Docia in July 2014. In July 2015, RIB also acquired a Spanish software business, Soft SA, which it saw as a stepping stone to establishing itself in Spanish-speaking markets.

London-based Createmaster describe themselves as “experts in process led, construction information handover management”. The business provides a combination of hands-on document management services and software-based services; its digital handover documentation services are managed using an online application called DocumentPark, and include:

• Operation & Maintenance Manuals (O&Ms)
• Health & Safety Files
• Asset Registers & Planned Preventative Maintenance Schedules
• BIM integration
• Hosting & archiving

Such services pitch them directly against another London-based firm, Dome Consulting’s Dome Connect, which built on the parent company’s experience in providing commissioning and handover consultancy (see my February 2014 post). The online document hosting also pitches them against the handover information services included in SaaS construction collaboration vendors’ platforms. BIW Technologies (later Conject, and now part of Aconex) pioneered the online compilation of Health and Safety File information in the early 2000s (post), while Aconex initially (2011) partnered with and later (June 2012) acquired an Australian based online manuals business called Grazer. Similar services are also provided by UK-based rivals such as Viewpoint for Projects, Asite and Business Collaborator.

As well as DocumentPark, Createmaster also provides a cloud-based platform aimed at building residents called Resi-Sense, and – alongside its document-centric support services and software – has some building information modelling (BIM) capabilities; it has worked with BIM consultancy partner Ibsecad to create a hosted model environment linked to its DocumentPark solution.

Createmaster also has links with Melbourne, Australia-based QA Software, provider of the Teambinder collaboration application (July 2013 post). Createmaster managing director Brian Dodsworth is also MD of QA Software (UK) Ltd (formerly Createmaster Solutions), and the two businesses share a City of London address in Paul Street. The London-centric nature of the business is clear from the range of case studies shown on the website – the vast majority of its projects have been in London and the south-east of England.

Launched in the US at the recent Construction Management Association of America (CMAA) conference in San Diego, California, is a new cloud-based project budget management application, Budget4cast.

Denver, Colorado-based CEO Bryan Carruthers (a career project manager turned AEC software entrepreneur) believes it’s something of a unique product, which he says generated a lot of interest and excitement at the CMAA event. He told me:

“the application is solely for managing project budgets and is geared mostly towards owners, developers, or owners’ representatives rather than contractors. We are not trying to be a complete extranet but are instead focussing on providing the best platform for a specific task.”

He continues:

“We have a robust ability to forecast costs (as well as, of course, track actual incurred costs) and some unique features allowing documents to be linked to line items, customized ‘one click’ reporting and an ‘auto balance’ feature.”

According to the Budget4cast website, the application allows users to:

• Customize, change and reorganize budget codes easily
• Track all forecasted costs (committed, uncommitted, potential changes, and changes)
• Attach supporting pdf’s to all line items for easy future reference.
• Track actual costs and tie to commitments, changes, or direct to budget line items.
• Reallocate between lines with a full audit trail of When, Why and Who made a change.
• Collaborate with your team and stakeholders by inviting them to participate on your project with edit or view only user.
• ‘Auto Balance’ lines you know will be spent through toggling on or off our feature that will automatically create an uncommitted placeholder and update it as you update other costs.
• Filter all of your data to quickly find exactly what you’re looking for.

The product also has a “clean and minimal user interface so navigation is intuitive and efficient,” while the product is competitively priced (at least for this launch phase) – at US$49 per calendar month “no matter how many users and collaborators you have”. A free 30-day trial is also offered.

Competition?

I have previously discussed other project cost control applications in the cloud, but they have tended to be integrated with collaboration solutions and focused on the needs of contractors and project managers. For example, the UK’s BIW Technologies (later Conject, now Aconex) was one of the first to move into this market in the early 2000s, providing a project financial control module to support some key contractor customers, including Lendlease and Mace. California project management consultancy ARES developed a cloud-based project cost controls platform, Worksite, launched in November 2014 and acquired the following year by Aconex. At the time of this latter deal, I also identified a handful of other vendors with interests in this field (including Viewpoint, e-Builder and Bentley Systems’ EADOC).

Marketing

It is good to see a simple, SaaS-based solution launched for the construction industry that allows a customer to buy and start to use the service almost immediately, and at a price that encourages trial usage (this contrasts with many of the multi-function construction collaboration platforms which typically involve negotiation with a direct sales team, then implementation and training consultants before a project can even properly start – and with a timelag and hefty price tag to match). In a technologically astute world where customers increasingly expect to start using cloud-based services as soon as they’ve signed up and paid for them, that software sales process introduces friction.

Bryan’s business, and ‘mobile-first’ vendors such as Denmark-based GenieBelt (post) and the US’s Plangrid and FieldLens (post), get this. In short, I like Budget4cast’s straightforward marketing approach: doing one thing really well, targeting that niche, and then making it quick, easy and inexpensive for people to start using it.

Think Project! CEO Thomas Bachmaier is optimistic about his business’s prospects in the increasingly competitive European SaaS construction collaboration technology market. The Munich, Germany-based company is now facing stronger competition in its core markets following the acquisition of key competitor Conject by the international market leader Aconex in March 2016, but has been busy expanding its own European footprint in recent months.

In an exclusive Extranet Evolution interview, Bachmaier listed a string of recent moves:

• strengthening the Think Project! marketing operation in Austria (“an interesting market and a good hub for eastern Europe”) in June 2016
• establishing a development centre and new marketing business in Szczecin, Poland (“it’s still a small proportion of our business but we are seeing very dynamic growth”)
• a September 2016 announcement of a joint venture with Madrid, Spain-based ProjectCentre to target Spanish and Portuguese-speaking markets, and
• the acquisition of a German competitor, Conetics (announced earlier this month).

German market consolidation

Bachmaier was particularly pleased about the Conetics deal:

“In Germany, we have a number of smaller construction collaboration businesses, and also ‘point solution’ providers in fields such as defects management. Conetics is one of the oldest – it was started in 2002 by a property and construction business, the Bauwens Group, managed by the grandson of former German Chancellor Konrad Adenauer. The acquisition has strengthened our position in north, western and central Germany, and while we have a good customer base in construction and engineering, Conetics had strong relationships with several German property developers where we were less strong.”

The deal added ten employees to the Think Project! workforce, and will boost revenues by around €2m a year, he said. Further deals may follow in 2017, but the immediate plan was to consolidate the existing group businesses.

European expansion

Existing Think Project! customers have helped the company establish a footprint in projects in France (in addition to its involvement in product lifecycle management, PLM, vendor Lascom), in Benelux (“a very mature market”) and in Denmark and Sweden, Bachmaier said.

However, customers in some markets are sensitive about working with vendors from outside their own country. This provided the rationale for establishing a joint venture with – rather than acquiring – Spain’s ProjectCentre. “It is the strongest player in a recovering market that has yet to adopt SaaS collaboration to the same extent as countries in northern and central Europe,” Bachmaier said.

Poland also appears to be ripe for rapid growth in SaaS adoption in construction, he continued, highlighting opportunities in infrastructure projects there and in nearby central and eastern European countries such as the Czech Republic.

Digital transformation

Bachmaier said there was also growing investor interest in European construction software businesses. The Aconex acquisition of Conject had increased focus on the sector, buoyed also by German interest in ‘Industry 4.0,’ or digital transformation, of an industry which had hitherto been regarded as somewhat conservative. “We started to see changes in the market in 2015,” Bachmaier said. “We are now having lots of ‘C level’ meetings with organisations interested in investing in BIM and digital transformation to improve industry productivity.”

Such German interest in digitisation parallels the “Digital Built Britain” strategy in the UK – first launched in February 2015 (post), and strengthened by the launch at the ICE BIM conference (19 October 2016) of a new Digital Built Britain body (see news release). This stresses that the continued development of the sector’s IT capabilities is not just a BIM or even a construction issue, but also anticipates the development of wider strategies encompassing Smart Cities and the digital economy.

2015 was a bumper year for Viewpoint‘s EMEA-based collaboration business, with revenues up 48% and a return to operational profitability. According to accounts filed at UK Companies House, total revenue for the year to 31 December 2015 was £11.457m (about US$16.84m or €15.58m at 2015 exchange rates) up from £7.717m in 2014 (post).

Positive trends

In a conference call last week, Viewpoint’s EMEA commercial director Steve Spark told me that the jump in growth reflected an acceleration in several positive trends including:

• growing adoption of Viewpoint collaboration solution by asset owners (EDF, Emaar and IKEA were mentioned, as were “London-based developers”)
• more consistent approaches to data collection by both Tier 1 main contractors, and Tier 2 contractors (firms with an annual turnover in the range of £100m-£300m); Spark said:

“Willmott Dixon, Carillion, Morgan Sindall and Galliford Try are all enterprise customers using both our Viewpoint for Projects (VfP) and Field View solutions…. Building information modelling, BIM, is acting as a catalyst. We are getting a growing number of approaches specifying compliance with PAS1192, with contractors looking to have a more controlled and consistent approach to document collaboration, common data environments and field data management.”

• growing use of “satellite” collaboration solutions by subcontractors for information management to support civil, structural or MEP work packages.

UK FD Chris Baty said the jump in revenues also marked the first full year of contribution from the former Mobile Computing Systems business (acquired in December 2014) – a third of the 48% could be attributed to Field View revenues, but this still left a very healthy 32% increase in core collaboration revenues for the Newcastle, UK-headquartered business. Company headcount grew from 70 in 2014 to 96 in 2015, with total employee numbers now over the 100 mark despite competitor rumours that the business was losing staff (see 4 May 2016 post).

Underlying trends in system use showed a 26% increase in the number of documents stored on the VfP system, while BIM helped contribute to a 32% increase in the volume of data stored. The number of Field View users was up 26% in a year, with a 45% increase in the number of data capture processes completed.

Spark would not be drawn on detailed performance since the end of the 2015, but said “double digit” growth for 2016 was “very encouraging”, with no impact detected as yet from Brexit-related uncertainty. Internationally, the company was doing “incredibly well” in the Middle East, and had been growing its partner network in mainland Europe.

Exceptional item

In 2014, Viewpoint reported its first loss after seven consecutive years of £1m-plus profits, mainly due to a sharp increase in headcount, plus investments in R&D and in marketing in the US and Australia.

The company returned an operating profit of £0.367m in 2015, but this was wiped out by an £0.742m exceptional item (“relating to legal and other costs incurred in the year to settle a legal dispute”), resulting in reported pre-tax loss of £0.375m. The Viewpoint team said they could not comment on this item due to a confidentiality clause, but I believe this relates to the July 2015 settlement of an action brought by Melbourne-based Project Collaboration (see 4Projects facing Au$9m reseller claim).

Enterprise adoption

US Viewpoint executives were also on the conference call, and CEO Manolis Kotzabasakis highlighted another dimension of Viewpoint’s UK growth: enterprise-level adoption. He told me:

“We have seen significant movement from project-based collaboration to enterprise deals. At one time, UK construction project managers regarded collaboration as good but optional; now they see it as mandatory and standard across all their projects. In the US, we are also seeing growing interest in VfP and Field View from US contractors looking to adopt Viewpoint for ERP.”

Spark reckoned that around 75% of VfP and FV revenues were now flowing from enterprise deals.

The Viewpoint for Projects and Field View operation is, of course, just part of a much bigger US-headquartered business now employing over 700 people worldwide. At the time of a US$230m investment from Bain Capital in April 2014, the business, which provides financial compliance, project management, estimating, and content management software as well as project collaboration, BIM and mobile tools, was forecasting revenues of US$140m. For 2016, global Viewpoint revenues are forecast to be nearly US$150m.

Digital transformation

In the week when the next phase of the UK’s Digital Built Britain programme (post) was announced (news release), Kotzabasakis also highlighted how digital transformation was now beginning to influence IT investments by construction businesses on both sides of the Atlantic. He said the latest Viewpoint user conference had been the most successful yet, with 1700 delegates in attendance and 53 partners exhibiting at the Portland, Oregon event, and his keynote had highlighted the opportunity for construction to raise its game through digitisation (we briefly disussed recent McKinsey reports showing construction lagging behind other industries in terms of its digital transformation; see also Construction mainly technology laggards).

His Viewpoint colleague Maury Plumlee, VP of global marketing, said construction was beginning to move forward with digitisation because the AEC information technology ecosystem is becoming less fragmented. A veteran watcher of the ERP space, he recalled that the US construction ERP space in 2000 had about 20 software providers specialising in AEC ERP, in addition to generic ERP solution providers. This number was now down to six or seven, he said, meaning some vendors now had the necessary critical mass to bring about change across the construction supply chain (a view shared by Kotzabasakis in May 2016). The UK was leading on digital transformation due to its headstart with BIM but the US was also “really heating up” I was told.

Competitive comparisons

Inevitably, comparisons will be made between the performance of Viewpoint and those of construction SaaS competitors, particularly Australia’s Aconex. In the year to 30 June 2016, Aconex announced underlying organic revenue growth of 31%, with the acquisition of Conject boosting total revenue growth to 50% (read Conject deal boosts Aconex revenue growth). Viewpoint matches these figures closely – underlying growth of 32% with the MCS acquisition pushing total growth to 48%. Earlier this year, Germany’s Think Project! reported 2015 revenue growth of 33% (post), so we have something of a benchmark of 30%-plus revenue growth to use to assess others’ performance. Of course, the scale differs but recent revenue trajectories across the three businesses appear very similar (see below); at the top of the market, this looks currently to be a buoyant and fast-growing sector.

Melbourne, Australia-based SaaS construction collaboration vendor, Aconex, provided a trading update covering the quarter ending 30 September 2016 on Monday (25 October announcement). Gross cash receipts totalling Au$41.8 million (US$31.65m, £26.1m or €29.01m), showing an increase of 44% from the first quarter last year (clearly boosted by now including Conject revenues). Net operating cash flow from core operations was Au$2.0 million, excluding acquisition and integration costs of Au$1.6 million related to the Conject acquisition.

Aconex is forecasting 2017 year-end revenues in the range of Au$172 to Au$180 million and EBITDA in the range of Au$22 to Au$25 million, excluding acquisition costs. Anticipated full-year 39% growth is up on the 31% core organic growth Aconex saw in 2016 – also emulated by competitors such as Viewpoint and Think Project! (post). Longer-term, the company is looking at 20-25% growth in 2018 and 2019.

Aconex’s outlook took into account, among other things:

• lower than expected growth of the European business (“Brexit” uncertainty and accelerated transition to selling Aconex in the UK)
• the impact of GBP and Euro currency movements on revenue … and
• oil price uncertainty – delays in decision making in the Middle East.

Conject integration

Regarding the “lower than expected growth” in Europe, CEO Leigh Jasper told this week’s Aconex AGM about the integration of Conject and the “transition from selling Conject to selling Aconex product”:

The integration has been progressing very well at a customer and people level. We have retained all customers and key staff and have very good cultural alignment between the two businesses. We are also making solid progress on operational integration, moving toward one single operating platform and set of standards for the company globally.

As part of the integration process we are conducting a review of the European operations, including Conject’s facilities management business, which provides on premise software rather than software-as-aservice model.

Growth in the short term has been lower than expected. We are working to complete the transition to selling Aconex, particularly in the UK, to reset the upward growth trend.

Speaking to industry contacts at Digital Construction Week events in London this week, I heard rumours of some Conject users being “resistant” or “hesitant” about shifting from their preferred system to the Aconex platform; in Australia, brokers also suggested Conject’s acquisition by Aconex had impacted Conject’s pipeline of new business opportunities. Clearly, any customer’s Conject-to-Aconex migration plans will vary according to whether projects are just starting or nearing completion and whether customers are on enterprise deals, and rivals will be quick to pounce if customers decide to review their options – but Jasper seemed confident about customer retention.

The review of Conject’s FM business is not unexpected. At the time of the acquisition, I said: “I would not be surprised if Aconex disposed of some of the non-SaaS elements of Conject’s German operation, while looking to expand its own whole-life asset and data management capabilities in the cloud.”

Conject slips behind Think Project!

Incidentally, I did some more number-crunching to look at revenue trends experienced by the leading players and to include Conject group figures in my analysis. It is clear that in the past couple of years the Conject business as a whole was not growing revenues as quickly as its peers. The gap between the Munich-based business and its main rival across the city narrowed, with Think Project! finally moving ahead in 2015 (something it started talking about doing in May 2013):

Following the parent group’s March 2016 acquisition by Aconex, I overlooked the July 2016 publication of Conject UK‘s financial results for the year ending 31 December 2015. These show the Woking, Surrey-based business grew revenues by 12% from 2014‘s £5.696m to £6.385m (c US$9.48m or €8.71m at 2015 rates), and also increased profitability, returning a pre-tax profit of £102,275 (Note: I have updated the UK revenues chart published last Monday in my post about Viewpoint’s results).

The directors’ report by UK MD Steve Cooper returns to its FY2014 theme of pricing pressures (post), but says the business was still able to grow its customer base, partly due to customers valuing its quality of service and security provisions:

In addition to new successes in enterprise and programme appointments, the UK team enjoyed a greater level of success around individual project deals than in previous years. Whilst in general competitor activities have depressed average pricing for project appointments in a number of niche markets, we secured an increase in new appointments, at good price levels, with teams who placed extra value on service quality.

… Across the company’s markets, the organisation continued to grow its client base, and secured new enterprise and programme engagements with organisations such as Barratt Developments, Manchester Airports Group, ISG, Investment Corporation of Dubai, Gleeds USA, Changi Airport Group, Lend Lease and Interserve.

In addition, a number of appointments were achieved from customers with high information security demands on the back of a 12-month internal investment cycle focused on achieving considerably higher capabilities in this area across the company’s platforms and support services.”

The Conject UK business accounted for around a third of total Conject group revenues in 2015 (€24.5m). Its order book grew 5% to £13.35m at the year end, while headcount grew from 52 to 56, though I understand that since the acquisition some employees (in marketing and other support roles) have left the business. In July 2016, it changed its name to Aconex Services Ltd.

In recent years, Conject has tended to publish its UK results in the autumn, but presumably now it is an Aconex company it needed to complete its reporting earlier so that its numbers could be correctly summarised in the parent company’s reporting processes. Its financial year end has, subsequently, been adjusted to match the parent’s year-end of 30 June.

December 2016’s ThinkBIM in Leeds provided an occasionally frightening view of just how vulnerable the built environment might be to cyber attack. It also highlighted how SaaS collaboration platforms might also help teams apply more rigorous security processes.

In May 2015, PAS1192-5 – “Specification for security-minded building information modelling, digital built environments and smart asset management” – became the latest addition to the suite of UK documents focused on building information modelling (BIM). Other documents – notably PAS1192-2 – cover the adoption and use of a ‘common data environment’ (CDE), and this has been a key area for construction collaboration technology vendors, but they will also need to help their customers and project teams address some of their security requirements.

In Leeds, Turner & Townsend’s Nathan Jones gave us the benefit of a non-construction person’s view of the security document (Jones was recruited into the construction industry after working in the armed forces specialising in military grade IT and security-related technologies). From his presentation and roundtable contributions, it was clear that he felt existing construction industry IT practices lag behind most other industry sectors in respect of security (“Often IT security is a bit backward in construction”).

From paper to data

This is, of course, hardly surprising. In the early careers of many people still working in the sector, we mostly exchanged design and construction information by paper. But now, in the early years of the 21^st century, we are mainly sharing ‘electronic paper’ – emails instead of letters, Word documents instead of typed reports, PDFs or native files instead of drawings, etc. And we are (or should be) vigilant about security: guarding against software viruses, ‘phishing’ and hacking, and against the theft or loss of our devices, while also continuing to track, store and protect our communications and intellectual property. (And not always successfully: Jones described how details of the internal layout of a Royal Palace were recently freely distributed to potential tenderers via an unprotected email attachment.)

However, the next stages in the digital transformation of the built environment sector are set to make information management more challenging from a security point of view.

Built Asset Security Management

As firms begin to share and to combine or ‘federate’ data-rich 3D, 4D (time) and 5D (cost) models in CDEs, project teams will need to heighten their cyber-security regimes, Jones said.

A shared 3D model may expose intellectual property to competitors. Moreover, a walk-through visualisation of a new building might expose sensitive information about the building’s design – key structural components, locations of key building services, placement of CCTV or other security equipment, for example. Shared 4D models might reveal periods when assets might be susceptible to sabotage or sites could be vulnerable to theft, while a 5D model could reveal commercially sensitive pricing information to competitors.

Published by the British Standards Institute and the Centre for Protection of National Infrastructure (CPNI), PAS1192-5 is intended to help teams identify and guard against risks including:

• hostile reconnaissance
• malicious acts
• loss or disclosure of intellectual property
• loss or disclosure of commercially sensitive information, and
• release of personally identifiable information.

And our already abbreviation-heavy glossary of BIM terms now includes BASM – built asset security management – as a new discipline. Jones repeatedly stressed the need to build security considerations into project delivery from the earliest stages. Early engagement with a BAS manager will help a project team and the asset owner develop a strong built asset security strategy (BASS) and management plan (BASMP), he said.

Such measures will become more important in an increasingly connected world of not just ‘smart buildings’ but ‘Smart Cities’. We will need to protect information created during delivery of a new built asset, and – just as importantly, and depending on the asset’s sensitivity – protect some or all of the data created by the people and systems in and around that asset, and in any connected or surrounding assets or infrastructure.

At the people level, precautions might include procedures limiting information access to those with defined roles (I was encouraged that Jones identified that some Software-as-a-Service collaboration or CDE platforms do this well: restricting access to certain files, models or data only to people with defined responsibilities), supported by systems of passes, logins, keys or other forms of authentication.

And talking to the SaaS vendor about their systems’ logical security measures won’t be enough. For any sensitive project, teams will need to know where the data is hosted and by who, how it is physically protected, what back-up regimes are applied, etc. (In the early 2000s, I wrote white papers outlining the physical, personal and logical precautions taken to safeguard data and applications by BIW Technologies – later Conject, now Aconex – and devoted a whole chapter of my book to data hosting. I was also reminded of this when I heard Microsoft describing construction and operation of their Azure cloud hosting facilities at Bentley’s November 2016 conference in London – post.)

BASM – it’s about people

As with other aspects of BIM, this is certainly not just about data centres and technology, but people and process. Awareness raising and training will be important: working practices learned in the days of paper or “spray and pray” email will need to be amended, and data vulnerabilities addressed. Often the weak link will not be the software or hardware, but the people that use them (users noting passwords on Post-It notes next to their computers, for example), and, as risks can never be entirely eliminated, Jones also advised that organisations need to plan from the outset how they will respond to security breaches.

In one of the roundtable sessions, former Manchester City Council head of estates John Lorimer asked Jones if this heightened focus on security might counteract recent years’ efforts to get companies and people to share information more readily. “Security should not stop collaboration, so long as it is controlled and people are aware,” Jones replied, “BIM is actually helping to trigger some security-minded conversations much earlier. We may soon be segmenting our construction supply chains according to those who are security-aware, and those who aren’t.” I expect this will also apply to SaaS vendors – how well they satisfy security-related requirements may determine whether or not their services are supplied in relation to sensitive projects.

Update (6pm) – Coincidentally, I just opened an e-newlettter from Steve Cooper, UK general manager of Aconex (formerly the Conject business) which says (after various product updates): “we are making significant investments to enhance our security capabilities to match or exceed Government demands.”

[Disclosure: This is a slightly expanded version of a post first published on the ThinkBIM blog, delivered as part of consultancy support for Leeds Beckett University.]