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Feb 13 2006

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Collaboration consolidation (contd)

Perhaps a factor in Autodesk’s decision to acquire Constructware (see previous post) was Carl Bass, set to take over from Carol Bartz at CEO of Autodesk in May. Bass was previously COO at Buzzsaw so will have some detailed first-hand knowledge of the US collaboration market, and will have been aware of the relative strengths of the different US products (with Constructware CEO Scott Unger apparently set to “play a key role in the new combined organization”, I hope there is good interpersonal chemistry between the two former rivals).

Snooping around for further background on the deal, I found an AECcafe.com article in which Unger – adds some detail. From his comments, it seems a key driver was the strength of Constructware’s ASP solution – perhaps indicating a current shortcoming in Buzzsaw so far as on-demand is concerned. However, when asked ‘What does Constructware have that is lacking or yet to be realized in Buzzsaw?’, Unger skirts round the question a bit, focusing diplomatically on how complementary the two companies’ solutions are, before re-stating the rationale given last week: “This acquisition enables Autodesk to rapidly expand its existing collaborative project management solution, Autodesk Buzzsaw, with Constructware’s leading cost, bid, and risk management capabilities.”

It is clear that the deal will boost the user base. Unger says: “There are a limited number of clients who use both Buzzsaw and Constructware products simultaneously – very little overlap.”

Meanwhile, at Cadwire.net, Randall Newton expands slightly on his previous AECnews.com analysis, suggesting “Autodesk is ‘marrying up’ in the construction business by buying Constructware, in three big ways”:

  1. It is acquiring the most mature web-based construction collaboration tool in the [US] market, with a feature set heavily influenced by customer input.
  2. Constructware is popular with [US] owners, who appreciate its provable rapid return on investment and the company’s clever ROI calculator.
  3. The acquisition gives Autodesk a better [US] customer base when it eventually releases construction simulation tools currently under development.

Randall continues: “Autodesk is the big dog in the [US] market among the A/E firms who create construction documentation. But construction companies per se historically have not been a big part of Autodesk’s market. This acquisition is part of a larger effort by Autodesk to reap a significant share of construction IT automation spending.”

I have stressed that Randall’s analysis should be seen as somewhat US-centric, not least because Constructware has no European presence. However, that does not mean we should ignore the deal on this side of the Atlantic. As I said in my previous post, the new integrated functionality may make Buzzsaw more attractive beyond its core of design community, but how attractive will depend on (a) whether this functionality can be tuned to the exacting demands of many UK-based contractors, project managers and clients, and, if so, (b) how quickly the integrated solution can be delivered.

To echo Randall’s assessment, Autodesk is a major player in the UK market among designers, but it has yet to make significant inroads into other parts of the AEC supply chain. If it wants to grab a bigger share of the UK market, then it may have to find a UK equivalent to Constructware with similar characteristics. In other words:

  1. a mature and well-respected solution developed with strong guidance from contractors and other customers
  2. a solution popular with ultimate clients
  3. a company with many AEC customers and users drawn from beyond Autodesk’s design community
  4. strong on-demand/ASP credentials
  5. complementary functionality

A few of the leading UK providers could fit the bill, and no doubt the directors and investors in one or two of them will be salivating at the prospect of a similar-sized deal ($46 million is, by my reckoning, roughly £27 million), assuming, of course, that Autodesk has both the appetite and the cash. For example, those involved with troubled Asite (see my post Asite books more losses) may see this as a possible way out. However, I am not sure a solution launched in 2004 could really be classed as mature (by the way, I notice that Asite has just launched version 2.0 of Project Workflow, and – judging from todays’ website – it also seems to be having some ASP infrastructure problems). More realistically under the above criteria, UK candidates might include, in alphabetical order: 4Projects, BIW or BuildOnline.

 

Permanent link to this article: http://extranetevolution.com/2006/02/collaboration_c_1-2/

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