Since the mid-2000s, the Australian SaaS construction collaboration market has been led by Aconex, but rivals are queuing up to chip away at its domestic dominance.
On 22 June, I noted how London, UK-based SaaS construction collaboration technology provider Asite was pumping out a stream of news announcements – its G-Cloud, Redrow and Imtech announcements were soon followed by news of a deal with Cambridge University (14 July 2017), the 25 July announcement of its CDE-based clash detection functionality, and then another enterprise deal announcement (26 July), this time with the Scotland and northern England-based Robertson construction, infrastructure and support services group.
On 3 August, I got an alert to yet another news release issued via PRNewswire: “RCR Tomlinson in Australia have been busy adopting Asite’s Adoddle platform across their entire Project portfolio!“. As I was busy with other matters (post), I didn’t immediately click through to the link, but when I did two days later, there was a notice saying:
“We are advised by Asite that journalists and other readers should disregard the news release, RCR Tomlinson in Australia have been busy adopting Asite’s Adoddle platform across their entire Project portfolio!, issued 03-Aug-2017 over PR Newswire. The company plans to issue a revised version next week.”
With a quick Google search, I found at least one copy of the 3 August announcement (even that may disappear soon). When I sought clarification, an Asite spokesperson told me it had been retracted as some client quotes hadn’t been included. RCR Tomlinson is one of Australia’s leading engineering companies, working in the infrastructure, energy and resources sectors, and is listed on the Australian Securities Exchange, ASX.
In the meantime (16 August), Asite has issued yet another news release – this time concerning Asite’s Adoddle being selected for the development of the Anglo-French IFA2 electrical projects by National Grid and RTE.
Australian market analysis
I look forward to seeing the Asite announcement about RCR Tomlinson (a one-time Aconex customer). However, this deal will only make a small dent in Melbourne-based Aconex’s domination of the Australasian collaboration technology market. Aconex (also ASX-listed, and due to report its year-end results next week, on 22 August) has developed a strong and mature customer base in its home regional market, with some major enterprise deals helping it to generate strong earnings at good margins. For the year to 30 June 2016, Aconex reported profitable growth across all regions, with Australasia up 35% to Au$48.8m, the region accounting for just under 40% of the company’s global revenues.
However, various competitors have tried to tempt Australian customers away over the years; for example:
- Conject had a local partner, Zavanti, for some years, and later established a Singapore office that serviced clients in the Asia Pacific region, before Aconex acquired the Conject business in March 2016.
- 4Projects, as it was then, started operations via a local reseller in 2012 (post), and after 4Projects’s acquisition by Viewpoint, the reseller’s Milton Walters (now at Procore) was quite bullish in June 2013. However, the relationship turned sour in 2014 as Viewpoint switched to a direct sales model, a move which prompted a lawsuit that was eventually settled out of court (see 4Projects facing Au$9m reseller claim) in July 2015, leaving a £742,000 dent in Viewpoint’s profits for that year (post).
- As I have previously described (post), Incite, one of Aconex’ potentially strongest competitors, was hampered by parent Leighton Holdings’ decisions to sack its management team and under-invest in its Keystone platform, destroying what might have become a lucrative spin-off. An August 2015 partnership with CIMIC (the business formerly known as Leighton Holdings) saw Aconex acquire the intellectual property, assets and certain customer relationships of Incite for just Au$6.4m (post).
- The business formerly known as ProjectCentre attracted a strong German parent in 2012, RIB Software, who subsequently offered a new iteration of ProjectCentre branded iTWO Collaboration Exchange (iTWOcx). With a further acquisition, of Denmark’s Docia in July 2014, RIB has been able to grow its SaaS revenues, while retaining a firm foothold in the Australasian market.
- Additionally, QA Software’s Teambinder has some major clients, Idox’s McLaren has also tried to market its solutions in the region, and there is a lively startup community, spawning AEC-oriented businesses such as APE Mobile (post) and Small Builders (post).
- And more recently (8 May 2017), the afore-mentioned US vendor Procore opened its first Australia office, saying it was tapping into regional demand for “intuitive, reliable and cost-effective project management, financial and collaborations solutions built specifically by and for the construction industry,” and claiming it already had more than 100 customers and 50,000 users in Australia.
Meanwhile, Asite has been reporting its Australasian revenues for some years. In 2012, the region accounted for £168k of revenues, peaking at £557k in 2013, but the numbers then gradually declined and slid from £519k to £439k in 2016. While its news release talk of Australian market expansion has not been reflected in its recent revenues, perhaps the slide will be reversed and the impact of the RCR Tomlinson deal will be recognised when Asite publishes its next annual report. And Aconex will need to continue monitoring such domestic competitors closely.