Une étude intéressante… (deux)

Since last week’s post regarding the French market for construction collaboration technology, I have had some interesting background from Emmanuel Netter (of Prosys – one of France’s leading Software-as-a-Service vendors) regarding the country’s main vendors, including our friends at BuildOnline.

Market beginnings

Apparently, collaboration products for the construction market have a slightly different history in France; the market was ignited by three "historical" competitors, all subsidiaries of large engineering firms:

• Derbi (now Iosis Informatique), still a subsidiary of OTH
• EDI Management, then a subsidiary of Coteba Management, then part of the shortlived Constructeo venture (merged into Bricsnet in 2001), and after another spell at Coteba, now part of Prosys
• Prosys, a subsidiary of Serete (now Jacobs France)

Early Prosys projects involved ad hoc applications based on Lotus Notes (used on the Paris Transport Authority HQ, the Stade de France, Paris Airports, etc); systems cost between 300k€ and 1 M€, and "you had to install a Notes client on every user workstation, and communications were made through ISDN lines".

Emmanuel continues the story:

"We began offering SaaS in Notes (a centralized server, but still client installs) in 93, for the Mutualité Hospital in Paris ; when Jacobs acquired Serete in 98, they sold Prosys to its CEO, who sold it two years later to Le Groupe Moniteur, France’s leading press group for construction and public sector. Le Groupe Moniteur was then part of Vivendi, who, as you may recall, was pushing hard on the internet business. That’s when we began offering our first real SaaS product, Prosys Online." Prosys’ current offering is Mezzoteam.

For Emmanuel, the main difference to the UK is that, apart from Constructeo, the main products were developed and funded by the vendors themselves, without investor backing, building on their existing IT strengths (Prosys has activity in CAD and facility management, Iosis Informatique acts as in-house IT resource for OTH).

Current market

Prosys and Iosis Informatique still figure among main current market players, says Emmanuel, alongside BuildOnline ("the only pure player" – now part of CTSpace) and Lascom (mainly focused on product life-cycle management, PLM, software – but trying to target construction with its Advitium solution).

Latest financial reports (from http://www.societe.com; no data for Lascom) show:

• BuildOnline achieved a 2005 turnover of €398k [£269k], making a net loss of €446k [£301k] (2006 results not yet available)
• Iosis Informatique achieved a turnover of €2950k [£1.99m], and a net revenue of €118k [£80k]
• Prosys achieved a turnover of €4600k [£3.105m], and a net revenue of €368k [£248k]

"With prices going down and number [of] projects raising, the French market is stable in value or with very slight growth."

Regarding BuildOnline, Emmanuel says:

"[BuildOnline’s] figures are not a suprise; they’ve been trying to buy their market share, slashing prices. Unfortunately, they have not succeeded (have they tried?) in expanding the market, rather trying to capture existing clients from their competitors. Since [they] came to France, we see huge amounts of cash put in what we consider as a ‘well without bottom,’ as we say in France*. Every year we suspect will be their last; but they go on… It’s a kind of magic…."

(*In English: a "bottomless pit"?)

Bit by bit, I seem to be getting to the bottom [sic] of the BuildOnline financial performance. Recently, in BuildOnline investors nurse losses, I estimated BO’s non-UK operations turned over about £1.4m and made a loss of about £0.5m. These figures from France suggest that it was the German/Austrian operation which delivered the bulk of BO’s non-UK revenues – approx £1.1m, losing around £200k – in 2005; the French operation seemed to account for most of the non-UK losses.