Aconex’s IPO prospectus reviewed

Aconex’s IPO prospectus delivers a wealth of information, but there are some omissions too.

I have been browsing through the IPO Prospectus (sent to me – thanks! – by an Australian contact) published on 17 November to support SaaS construction collaboration vendor Aconex‘s on-off-on-again flotation. The exit of private equity partner Francisco Partners is significant, I think, but the document also gives some useful facts and figures about the company, its market, and industry and technology trends:

• Over 50,000 user organisations use Aconex worldwide, of whom approximately 1,070 were fee-paying customers using the Aconex platform over the course of FY14.
• Aconex offers the option for customers to pay on a per-user basis; however, greater than 90% of customers prefer to pay a fixed subscription fee for unlimited users. For the conservative purposes of its prospectus forecasts, Aconex suggests the revenue opportunity represents 0.08% of project value; on average, it has been charging 0.096% of the total construction value.
• Aconex is forecasting global revenues of Au$76.5m in the financial year to 30 June 2015 (Au$84.8m in the calendar year ending 31 December 2015). Revenue visibility is high, with approximately 75% of
  FY15 revenue and 56% of CY15 revenue to be generated under contracts relating to committed and operating projects. 48% of FY14 Aconex revenues come from Australasia, 25% EMEA, 16% Americas and 11% Asia.
• It estimates the global construction collaboration solutions market to be worth US$5.6 billion (citing an undated report by Frost & Sullivan).
• It highlights the BIM opportunity and the role of SaaS-based collaborative ‘Common Data Environments’ to support BIM.
• The UK market is (rightly, IMHO) cited as the most mature “due to its high acceptance of SaaS and the presence of at least five domestically based vendors of cloud construction collaboration solutions”. Australia shares similar characteristics, while Germany is “also well-penetrated, with two significant German-based vendors.” (I would say Germany has three: Think Project!, Conject and the acquisitive RIB.)
• Aconex has started a two-year process of migrating most of its hosting infrastructure from various third party data centres to one new (unnamed) third party providing a managed hosting service, with data centres located in each of Aconex’s operational regions.

However, the company also makes some assertions or omissions that jar with my view of the construction collaboration market. For example:

• It dismisses some enterprise content management solutions (eg: SharePoint), or engineering design and document management solutions (eg: ProjectWise) as internal systems not used project-wide and/or being expensive and cumbersome. This may be true of some ECM and EDM systems, but Bentley has been extending the connect-ability and reach of its ProjectWise solution, including launching a SaaS alternative, ProjectWise Essentials.
• Its assessment of the UK market says Conject and 4Projects are Aconex’s major direct competitors, and, while mentioning “ASite” [sic], omits Business Collaborator, which before its acquisition by Unit4 was earning higher revenues than Asite, has some major industry customers and has also been strongly investing in its BIM capabilities.
• In the US, it says “The major competitors to Aconex in the United States are e-Builder and Procore.” There are several other smaller indigenous players, but UK rivals are also marketing in north America, with the 4Projects platform strongly placed to target US contractors through its parent ERP vendor Viewpoint, and I saw numerous US case studies regarding adoption and use of Bentley’s ProjectWise at its recent conference. Newforma’s hybrid cloud, on-premise and mobile portfolio also has some strong US AEC traction, and the recently launched Trimble Connect provides another SaaS alternative from an expanding US-based software group.
• And no mention of Autodesk at all…