Jan 05 2010

Box.net and Motion Computing target construction

I use Box.net as an online file back-up and storage solution, and chanced upon a blog post by Box.net’s senior business development manager Matt Soldo talking about a new reseller relationship with Austin, Texas-based Motion Computing, who produce ruggedised tablet PCs.

Positioning itself as “Your plan room in the cloud” (a familiar US refrain), Box.net is targeting construction customers – “helping them replace cumbersome FTP servers, facilitate electronic bid management, as well as centralize and archive project resources”. It continues: “Integrating Box.net with Motion Computing’s rugged tablets is an important step towards fulfilling Box’s mission of enabling businesses to easily share and access their content from anywhere.”

Box.net, like drop.io (see post), clearly sees construction as a good potential market, but the extent of its collaborative capacity may not be enough for some customers. While there will certainly be designers and contractors who want a simple file-sharing/archive solution, there will be others who may eventually be frustrated that they cannot use the same solution to mark-up and comment on CAD files, or to manage a multitude of inter-related complex workflows relating to construction-specific processes (check-lists, RFIs, early warning notices, etc).

The reseller arrangement with Motion will help raise the profile of Box.net among potential construction customers, alongside a handful of other solutions (Motion also has partnerships with Latista, Vela Systems, Bluebeam, Tekla and FreightTrain), but I wonder if the relationship will be that fruitful. After all, customers investing in the on-site convenience of tablet PCs might also be looking for more efficiency savings through use of more advanced construction collaboration solutions, and a Motion PC will presumably be able to access any browser-based application its user selects. For example, if I was working on-site using a tablet PC, I would be more likely to opt for a sophisticated solution that offers more than file-sharing – Motion has a case study (see webinar) showing how Skanska used Vela on one of its tablets to reduce certain site processes from three days to one day (see also this Vela YouTube video). In addition to tablet PCs, PDA and smartphone devices have also been successfully deployed to deliver construction-specific process support on-site (see recent post Business Collaborator goes mobile too).

Box.net’s construction offering can be added to the growing list of inexpensive web-based applications (eg: Collabor8online, Glasscubes, e-Grou, Incite Toolbox, ShowDocument, drop.io, Clouds UK, Woobius, Colaab – all covered in just the last year on this blog) targeting a very price-sensitive market – its cost-consciousness heightened by the current recession, of course. Box.net is available from US$15/user/month for business use.

Permanent link to this article: http://extranetevolution.com/2010/01/boxnet-and-motion-computing-target-construction/

Jan 04 2010

And the stats say….

2009 was a bit of an erratic year for me blog-wise. This was partly a reflection of my change of career path in the spring, coupled with all the effort that has to go into launching and sustaining a new business (meaning that blogging on construction collaboration technologies wasn’t always top of my “to do” list). Nonetheless, ExtranetEvolution.com had its best year yet, recording over 45,000 page impressions and 32,000 unique visitors to the site during 2009 (up from 43,000 and 28,000 in 2008). Peak month was November with over 5,000 page impressions and nearly 4,000 unique visitors.

The five top days for visitors were:

A big Thank you to everyone who visited ExtranetEvolution.com during 2009 – I hope you will return regularly during 2010, during which the 1000th post will be published (this is number 966). The blog will never become a high-traffic site (it is focused on a handful of related niche topics, after all), but the encouraging comments and emails I continue to receive show that many people appreciate what I write.

Permanent link to this article: http://extranetevolution.com/2010/01/and-the-stats-say/

Dec 17 2009

Brialto

I received an email earlier this week inviting me to join Brialto, an online business networking platform as a pioneer member. It claims it is

“the first online business networking platform to replicate everything you would expect to see at an offline networking event – rooms where events take place, a list of members and guests, business cards of each participants’ details and the ability to make introductions, exchange information and pass on referrals.”

These aims seem reminiscent of those of ecademy, an established business networking platform used by some friends (though they are critical of how much spam they get through their involvement).

Looking at the website, it comes across as a set of chat-rooms. I can see how it might be used by existing networking groups for communications between events, but there doesn’t appear to be much functionality that isn’t already included in platforms such as LinkedIn or Ning. Brialto says its Private Rooms can be used for:

  • Intranets for business, subsidiaries and departments
  • Extranets for companies and their clients
  • Projects and project management

These places are “Designed for companies and individuals with a need for client or staff projects to run, or where the group and its activities need a place to share information and documents”. However, I guess the kinds of intranets,  extranets or projects they have in mind are relatively modest – I doubt that Brialto would be seriously considered for managing even basic construction projects.

(I saw the name ‘Mark Herring’ listed as one of the moderators – I suspect this is the same Mark Herring who runs London-based Business Junction.)

Permanent link to this article: http://extranetevolution.com/2009/12/brialto/

Dec 16 2009

Business Collaborator goes mobile too

UK-based construction collaboration technology vendor, Business Collaborator has just launched BC Mobile, “a new module for mobile devices that will enable users of its BC 5.3 project collaboration service to access files and information and to action tasks on the go”.

According to today’s news release: “BC Mobile allows users of internet enabled mobile devices – such as the Apple iPhone, Blackberry Curve, LG Arena, Nokia N97 – to access their BC 5.3 system from wherever they happen to be.”

Technical Director Stephen Crompton adds: “Whenever the user has internet access, he or she will be able to use BC Mobile to browse and search projects, download documents, participate in discussions and action their tasks – such as requests for information (RFIs) and Change Orders – on any mobile device”.

This announcement parallels similar steps I’ve seen taken by other vendors to embrace mobile working over the past 2-3 years (BIW was providing Bovis with a PDA-based defects management/snagging application in 2006; US-based Constructware – now an Autodesk product – was available via Blackberry devices in February 2007). The shift towards mobile support, though, has clearly accelerated in recent months. Incite, Woobius, Aconex and Asite have all either released mobile products or announced the imminent launch of them.

Update (17 December 2009): According to Morgan Stanley, the mobile web is set to outstrip the desktop web, becoming at least twice the size. Within five years, they predict more users will connect to the web via mobile devices than PCs. (source: ReadWriteWeb)

Permanent link to this article: http://extranetevolution.com/2009/12/business-collaborator-goes-mobile-too/

Dec 15 2009

KA Connect 2010 – what happens in Chicago, won’t stay in Chicago

Sometimes I get invitations for events that are just irrelevant to me. Other times I get invitations that sound brilliant. The latest, from Christopher Parsons at Knowledge Architecture (post), definitely falls into the latter category.

Knowledge Architecture will be hosting KA Connect 2010, a knowledge management conference for the architecture, engineering and construction industry on 8-9 April 2010. The only problem for me is that it will be in Chicago, so it is unlikely that I will be able to attend (anyone fancy sponsoring me to attend?), let alone speak. However, maybe some UK or European-based AEC collaboration vendors might take up the opportunity to share their experiences with and learn from their US counterparts.

I love the idea of 40 talks in two days all focused on knowledge management, integrated project delivery, BIM and collaboration in the AEC sector, and it also includes a Pecha Kucha session. For those unable to attend, I’m hoping Christopher manages to capture some of the highlights and share them online – or maybe one (or more) of the attendees will blog about or Twitter from the conference?

Permanent link to this article: http://extranetevolution.com/2009/12/ka-connect-2010-what-happens-in-chicago-wont-stay-in-chicago/

Dec 09 2009

4Projects and profitability

“We’re not always given credit for the consistent profitability we’ve achieved for a business that received no early start-up funding.”

I recently met Steve Nelson, finance director of UK construction collaboration technology vendor 4Projects, to learn more about the history of the company, its funding and the 2007 management buy-out (MBO) – the meeting took place at the London Covent Garden offices of August Equity, who helped fund the MBO. Having regularly commented on 4Projects’ financial performance since 2005 (most recently in September 2009), I wanted to get a better picture of how the company grew during the early 2000s and what had helped it achieve a remarkably consistent and growing level of profitability seen in recent years.

4Projects: the start-up years

After working in private practice (Arthur Andersen, Price Waterhouse) and then for north-east England based accounting software providers Sage and QSP, Steve joined 4Projects’ then parent, the Leighton Group, as finance director in 2001, when 4Projects was still a relatively small business.

4Projects first came to Leighton’s attention the previous year when a Leighton web design subsidiary did a small project for Taylor Woodrow. This led to a conversation between Taywood’s Richard Vertigan, who had been nurturing the idea for a Software-as-a-Service (SaaS) business targeting the construction sector, and Leighton chairman Paul Callaghan, who was looking to invest the proceeds of the disposal of Leighton’s Domainnames.com business. As a result, Leighton offered to fund 4Projects’ start-up costs through to the point when it would be generating sufficient income to stand on its own two feet. “It took about two years to reach profitability – in March 2002,” said Steve, “by which time it had incurred around £400,000 in start-up losses.

“However, we’re not always given credit for the consistent profitability we’ve achieved for a business that received no early start-up funding. Leighton group covered the start-up costs, but the company didn’t want or need outside investors influencing the running of the business. Unlike competitors like BIW Technologies who raised about £8m in external funding, BuildOnline who raised even more [£34m, disregarding sums raised for other ventures that were acquired or merged with BO] and Asite [heavily backed by Robert Tchenguiz], 4Projects was able to manage its backers’ expectations without spending money on different products, on expensive infrastructure and wasteful marketing campaigns. Richard deserves a lot of credit for keeping costs down. When I arrived in 2001, the costs were £50,000 a month at a time when the business was generating just £30,000 in monthly revenues. It was a big gap but nothing like the gap the competition had.

“Nevertheless, we often suffered by comparison with firms like BIW, BuildOnline and Asite – ‘look at how much money they’ve raised’ or ‘look at how many people they’ve got’, we’d be told – but, believing turnover is vanity and profitability is sanity, we told customers to look at our bottom line.”

Steve says part of 4Projects’ success was down to Richard Vertigan’s strategic decision to focus purely on a single SaaS product, managed using a single infrastructure. This was hosted cost-effectively by another Leighton group subsidiary, The Data Corp, at a data centre situated north of Detroit, in Ontario, Canada, until 2004. “Even today, we still keep our hosting expenditure costs down. BT may not be the most glamorous name in hosting – but they provide a reliable base for our infrastructure which is managed from three data-centres including one near Glasgow.” Rather than rely upon hardware provided by BT, 4Projects invests in its own servers and other equipment and pays BT for rack-space to host it.

The plateau of profitability

While rival SaaS collaboration vendors were struggling to reach break-even, 4Projects was generating modest profits throughout the mid-2000s. Turnover at BIW [my former employer] was higher but its higher fixed costs meant it took much longer to report its first profit (2007). In the year to 31 March 2005, for example, 4Projects reported a turnover of £2.1m, and six months later BIW reported revenues of just over £4m, but 4Projects generated a pre-tax profit of £266,000 against BIW’s loss of £192,000. Indeed, of the major vendors reporting figures to Companies House, the only other vendor reporting a profit that year was Styles & Woods’ modest Storedata operation, while losses at Asite, BuildOnline UK and Aconex UK were £1.3m, £0.55m and £0.3m respectively.

For the five financial years from 2003 through to 2007 inclusive, 4Projects reported total profits of almost £1.4m. However, it needs to be pointed out that 4Projects Ltd’s reported profits understate the true performance of the business. Substantial management charges were paid to a loss-making sister company (4Projects Management Ltd). If these fees had not been paid, the profits figures would have been considerably higher. For example, in 2007, the last full year before the 4Projects MBO, the business turned over £3.2m and generated a profit of £0.7m, but the management charge of £720,000 masked a real profit figure of about £1.4m.

The MBO

I have written several times before about 4Projects’ 2007 MBO. Steve explained that Leighton’s long-term objective had been to create a business that was generating sustainable revenues and could then be profitably sold. The deal saw 4Projects valued at just over £20m (transaction expenses saw the total deal cost reach over £21m). The Leighton group withdrew from the business, but several of 4Projects’ directors reinvested a total of around £3.2m in loan notes to 4Projects (see post) alongside August Equity’s £7.4m. The balance of the sale was funded by £1.0m of equity (from August and the directors) and bank loans from Kaupthing Bank which are serviced by bi-annual repayments. Kaupthing is currently in administration and 4Projects’ strong cashflow has allowed it to make repayments earlier than originally scheduled (“Given interest rates at the moment, there is no point in holding money on deposit,” Steve said). The bank loans were scheduled to be paid off by 2015.

No Middle East exposure

The debt on the 4Projects’ parent company balance sheet may be regarded by some competitors as a potential issue for customers, but Steve isn’t unduly concerned: “Given the business’s continued growth and profitability, the debt is easily manageable,” he said, “we have used surplus cash and we don’t have any of the issues that rivals [eg: Aconex, BIW] have faced through over-exposure to the Middle East market.”

He says Richard Vertigan and colleagues looked at establishing a 4Projects base in Dubai, but were ultimately discouraged by the legal and commercial hurdles involved: “I’d had experience of dealing with customers in the region when I was at QSP, and when I looked at the changing market conditions in Dubai a year ago [late 2008], I certainly felt we were right to be cautious.”

My reaction

Having worked for one of 4Projects’ competitors throughout the 2000s, it was fascinating to get Steve’s perspective on the relative financial fortunes of the different vendors. Plainly, 4Projects started without some of the impressive sums pumped into its rivals during the dot.com boom era (and so didn’t have any of the issues recently encountered by BIW – see “A tough year for BIW” – when it came to repaying loan notes), and focused on keeping a tight ship. As former head of marketing at BIW, I don’t believe we indulged in any expensive marketing campaigns (perhaps Steve was pointing the finger at BuildOnline, which certainly invested heavily in PR and marketing during the early months of its existence).

With the benefit of hindsight, 4Projects made some good early decisions. First, it has mainly been focused on one product aimed at a market sector it knows well (only in the last year or so has it begun to segment its core market, creating offerings for the retail and energy sectors), whereas its major rivals have tended to offer wider portfolios of products and services (BIW, for example, invested time and money on an innovative but ‘problem child’ product, PlanWeaver – now shelved (post) – and BuildOnline set out to create an array of e-commerce as well as collaboration services).

Second, 4Projects also opted to avoid the Middle East market and focus its initial efforts mainly on the UK, only venturing overseas when its UK-based clients wanted to use them in projects in other locations. It has therefore avoided the fall-out from the continuing crisis in Dubai – where BIW’s erstwhile client Nakheel has been much in the news recently, and where Aconex took a hit too.

And third, Steve plainly believes that 4Projects hosting strategy has paid off handsomely. It pays much less for its rack-space hosting by BT than BIW does for its Attenda managed services – though, of course there are distinct differences in what each vendor gets from its hosting provider. Moreover, in a cost-conscious market like construction, being able to pitch your services at a lower rate than your competitors can make a crucial difference, particularly when that market hits a savage downturn (though cost isn’t everything, of course, as Aconex‘s Rob Phillpot recently argued).

As a result, and as previously discussed (post), 4Projects has achieved some healthy pre-tax profit margins in recent years. This year’s 33% was almost double the 18% achieved last year by Sword CTSpace (which today incorporates what’s left of the former BuildOnline operation), and ahead of the performances of BIW and of Business Collaborator (post) who achieved margins of 13% and 7% respectively in 2008 – though both, I believe, are expecting more modest results this year. By contrast, Steve Nelson seems confident that 4Projects will continue to thrive in 2010. Its rivals may seize on the debt issue, but given 4Projects’ steady growth, the healthy profit margins and the stability of its management team, the company would need to suffer a savage reverse in fortunes for the debt to assume major significance.

Permanent link to this article: http://extranetevolution.com/2009/12/4projects-and-profitability/

Dec 02 2009

Asite keeps its community updated

As a web 2.0 enthusiast, it’s good to see UK construction technology vendor Asite using its community forum to talk to users about its plans, and Tweeting about them (see post). Through Twitter, I saw a link to an update posted by Nathan Doughty, Asite’s CTO, in which he updates Asite users about forthcoming developments on the Asite platform.

Nathan extols the virtues of Asite’s AppBuilder API (“the direction of our roadmap is firmly geared around increasing the “self-service” nature of the platform”), says an iPhone app will be launched in January (with other mobile apps to follow), and talks about Asite’s Product Library functionality.

What I think is particularly encouraging is how Asite is looking to expand the benefits of being part of its free online community, using a lot of Web 2.0 functionality:

  • Publish tender opportunities (with OJEU integration) plus integrated distribution via Twitter and RSS feeds.
  • Respond to tender opportunities / issue expressions of interest
  • Send enquiries to contractors and suppliers
  • Enable configurable public profile pages for individual users (for those that want them), integrated with LinkedIn
  • Public project pages
  • A social workspace incorporating forums, blogs, and wikis for use by groups of colleagues for early-phase collaborations, or integrated into the Asite Community site for industry-wide public conversations.

Nathan also echoes the approach being adopted by his Aconex counterpart, Rob Phillpot (see post), when he talks about engaging with third party software developers and content providers “to make their content and applications available to our user base as part of our menu of ‘portlets’”.

Permanent link to this article: http://extranetevolution.com/2009/12/asite-keeps-its-community-updated/

Dec 01 2009

Sage North America embraces project life-cycle management with BIW

Yesterday UK collaboration technology vendor BIW Technologies* announced that it had created a hosting infrastructure to support its clients in North America – a network that it expects to grow through a partnership with Sage Construction and Real Estate (Sage CRE).

This BIW announcement has been forthcoming for a while, since it is exactly two months (30 September) since business management software vendor Sage North America (regional arm of the UK-based Sage group plc), announced the launch of Sage Project Lifecycle Management (not to be confused with another PLM: product lifecycle management). According to the news release, Sage PLM is:

“a web-based collaborative project management service platform that simplifies an organization’s workflow by making all project-related information and documentation available online in a secure, centralized location. Sage Project Lifecycle Management was developed through a partnership with BIW® Technologies, a global leader in web-based business applications.”

Sage North America says it delivers software and services to over 2.9 million small and midsize businesses in Canada and the United States, and the Sage Timberline Office finance and accounting application is widely used by many construction and real estate companies.

Sage’s partnership with BIW therefore potentially provides a powerful marketing platform for the web-based BIW project control platform in north America. Sage CRE products are sold exclusively through Sage Business partners focused on the needs of small and mid-sized construction and real estate management companies. Thus BIW now has a network of industry salespeople looking to offer its platform as an integrated offering alongside Timberline. The prospect of linking project-based metrics with key business performance measures, with reporting and audit trail tools to help ensure compliance with financial, legal and regulatory requirements, could be attractive to many existing Sage Timberline users who have yet to embrace project collaboration or who have been looking for a more integrated service.

This is not BIW’s first venture into the north American market; its SaaS platform has already been deployed to support the team working on the new headquarters of the Bill & Melinda Gates Foundation in Seattle, WA, for example (see post). However, it marks a new and interesting phase in the expansion of non-US collaboration vendors into this market, following news last year that BIW competitor 4Projects was opening US and Canada offices in Houston and Calgary, and the establishment of Aconex outposts across the region (Germany-based conject also has a US office). The Sage/BIW alliance, though, means BIW doesn’t have to recruit new salespeople or open new offices; it can extend its reach widely across the continent with relatively little investment on the ground.

[* Disclosure: I worked for BIW Technologies Ltd from 2000 to early 2009, and still undertake occasional paid PR consultancy projects for the company.]

Permanent link to this article: http://extranetevolution.com/2009/12/sage-north-america-embraces-project-life-cycle-management-with-biw/

Nov 30 2009

An open letter to the new Chief Construction Adviser

[This is a re-post of an article from my pwcom blog, published 27 November 2009. Update (04 December): I added a post-script to the original post – read the response received back from Paul Morrell.]

First mooted in July 2008, the appointment of the UK government’s first Chief Construction Advisor was finally announced this week. Former Davis Langdon quantity surveyor Paul Morrell has taken up the three-days-a-week job at a critical time for the construction industry, and his new role has been extensively covered in the main construction weeklies. I have been taking a look back at some posts I wrote last year about this role, and felt moved to compose an open letter to our new ‘construction czar’….

Dear Mr Morrell

First, congratulations on your new appointment which is long overdue, particularly as it was more than 16 months ago that the House of Commons Business and Enterprise Committee recommended – in Constructing Matters (PDF) – the “creation of a post of Chief Construction Officer”.

As I wrote at the time, Constructing Matters was, however, something of a disappointment to me. Like another document published shortly before – the Strategy for Sustainable Construction (see post) – it failed to pay attention to better use of ICT tools within the UK construction industry.

I read in this week’s Building magazine that you plan to focus on two aims: to co-ordinate low carbon policy and to improve the government’s return on its investment. I submit that in both these areas ICT can play a crucial role.

The Commons Committee received evidence of the potential benefits of ICT tools to address such problems. Indeed, Constructing Excellence (of which I am a member) said:

Common processes and tools bond the team together and release major efficiencies. For example, good inter-operability of ICT systems in the supply chain using Constructing Excellence’s Avanti protocol, project extranets and single building information models, and common logistics for moving materials to and from site. ICT is seriously under-exploited in the sector despite many initiatives and much evidence of the business case. However, something as simple as co-location of a project team in the same office is a good place to start.

Sadly, Constructing Matters had just one mention of ICT (relating to training new entrants to the industry). Perhaps when you chair the Construction Innovation and Growth team, you will encourage industry professionals to look at the huge potential of information and communications technologies to support the delivery of a better, more sustainable built environment.

There is a growing body of support and advice on this topic. For example:

  • Sir John Egan, in Accelerating Change (2002), highlighted the role of ICT, and wanted 50% of projects to be delivered by integrated teams by 2007 – a target the industry failed to meet.
  • I helped produced a study on ICT and Automation (PDF) in late 2007, which was published by the National Platform for the Built Environment and formed the basis of a new Strategic Research Agenda (PDF) just four months ago.
  • The SCRI Research Report, Future Generation of IT (PDF) published in June 2009 helped identify “possible futures that the construction industry might face and to start developing a construction IT vision for the year 2030“.
  • In 2008, the Cabinet Office’s 28-page report Greening Government ICT also talked explicitly and positively about ‘Thin client’ technologies and other potential ICT contributions.
  • The Construction Commitments, among other things, says “IT-based collaborative tools and communication technologies will be exploited“.

Internally, UK Government (the construction industry’s biggest single client) has also been looking at improving efficiency through the Gershon Efficiency Programme, and one strand of the 2008 Operational Efficiency Programme was the cross-cutting area of ‘Back office and IT’.

Looking at the tasks outlined in your job description last year, I think  ICT has a vital role – for example:

  • “promote best practice in construction procurement” – think about the efficiency savings that come from automating aspects of tendering, making information available online and reducing paperwork.
  • “implementation of Government policy” – from Gershon to Greening Government IT, ICT is now a cross-cutting strand within government and the Strategy for Sustainable Construction, albeit modestly, gives scope for government to encourage better ICT use across the industry at large and support its low carbon policy.
  • “Championing the industry’s image” – Too often described (sometimes unfairly) as ‘technophobic’, the industry could at least partly transform construction’s low-tech image by incorporating ICT more effectively into its day-to-day operations. This could range from high-end BIM collaboration to the ways in which industry manages its conversations with clients, supply chains, local communities, regulators, new recruits to the industry, and others (see post).
  • “Promoting innovation” – ditto.

I hope you and your support team will take on board much of this growing clamour to take this great industry of our’s well and truly into the digital age.

Yours sincerely

Paul Wilkinson

Permanent link to this article: http://extranetevolution.com/2009/11/an-open-letter-to-the-new-chief-construction-adviser/

Nov 30 2009

Rob Phillpot on Aconex, APIs and acquisitions

Following my recent posts on Aconex‘s API announcement and its 2009 financial results, I spent 40 minutes quizzing Rob Phillpot, company co-founder and General Manager, Product, about planned developments of the Aconex construction collaboration system.

It was a fascinating insight into the thinking behind the world’s most widely used SaaS collaboration platform. I was particularly struck by Rob’s enthusiasm – which I share – for the potential of building information modelling (BIM) to transform construction collaboration, and I got a powerful sense of how the Aconex APIs (post) were likely to fast-track development of new features.

Development resources

We started off by talking about how Aconex manages its product development processes. Rob said he led a high-level team that helped maintain a ‘roadmap’ of future development, balancing the need for incremental improvements (depth of functionality) and more strategic, long-term efforts (breadth).

Around 50 product developers are divided into three teams. One is focused on incremental development of the core Aconex system, doing bug fixes and improving the service in response to suggestions made by end-users. The second has a more ambitious remit, looking at what he called “breakthrough” technologies, some of which might be home-grown, others which might be developed by partners or by integrating third party solutions. And the third team is responsible for maintaining and improving the hosting platform.

Managing user feedback used to involve feedback from annual member forums held regionally, Rob said, “but as Aconex has grown, these proved less and less valuable for feedback and we now hold regular quarterly meetings with our key clients.” Aconex also has a ‘Product Voice’ system that allows users to see what suggestions have already been made and to add new ones as necessary:

“This helps us prioritise ideas, as we are effectively getting ‘votes’ for particular enhancements, meaning we can quantify the levels of support for particular changes. These ‘hot spots’ help us focus on changes that will add maximum business value or have greatest impact for our users.”

“APIs are not a silver bullet, but…”

Rob is clearly excited about the opportunities arising from Aconex’s release of set of Web Services APIs (Application Programming Interfaces) to enable integration between its system and other software products used by its clients. After a quick sprint through a description of ‘Agile’ development, he said “the APIs are not a silver bullet, but they will make it much easier to add new functionality”. He continued:

“The APIs will allow us to accelerate new developments. We have to be able to add depth and breadth to our applications. Our in-house team look at the depth issues, focusing on what we are good at, while the APIs make it easier to add new functionality, to add breadth. We can work with software partners, or outsource particular development tasks for applications where we don’t have the in-house expertise – perhaps for mobile apps or widgets. And, of course, we still haven’t used any of the investment we got from Francisco Partners last year if we want to acquire a company that has a technology that we need.”

Some future development areas

Discussing areas of potential development, I picked some examples already being pursued by Aconex’s competitors, including BIM (Asite), rich multi-media (Kalexo) and contract administration (BIW, Asite – post), but we also talked about some more strategic developments (viz: asset lifecycle support, a new user interface, Google Wave, and whether Aconex might get into the low-cost file-sharing market):

Support for building information modelling – Rob became very animated about the opportunities to support collaboration on BIMs, even saying that it was almost inevitable that we would see BIMs shared on Software-as-a-Service (SaaS) platforms:

“We are seeing major convergence: new BIM tools, new server developments and broader broadband … We will no longer rely on 2D frozen documents issued at a particular time – the nirvana will be a live model, an evolving thing that we can edit anywhere even without BIM software and yet retain an audit trail of all changes.”

Wow. When? “Maybe four, five, six years”.

Multi-media (eg: chat, video, conferencing) – Aconex has always had simple discussion-board or forum-type functionality but is now actively exploring richer forms of real-time collaboration. Rob said this would one area where the APIs might really help, and the company had been in detailed talks recently about adding Skype-like conference calling capabilities to its platform.

Process or workflow management – Rob said “We have have been adding quite a lot of process support to the application recently: things like cost control, management of variations and related payments.” However, they were not developing tools to support particular forms of contracts (eg: NEC, JCT) – “some are just too specific to particular markets”. There was growing interest in using the Aconex system for procurement (something that the company tried in its infancy but found little demand for), and, as a result, Aconex’s online tendering module is in the process of being rebuilt.

Asset lifecycle management – Still talking about processes, Rob said Aconex is also going to offer better support for advanced hand-over processes. This goes beyond snagging (aka defects management or punch-lists) and looks at managing building commissioning processes (eg: test plans) to achieve compliance and then supporting operation and maintenance of the building throughout its lifecycle (it wasn’t clear if this would go as far as, say, the conject ILM platform – post).

User interface – Aconex is also looking at a new user interface to its application, working with an American UI specialist to get an expert view on what works best for browser-based applications. Rob said they are treading carefully on this as it can be an area where existing users can be resistant to change. Apparently, prototypes of the new UI will be tested by users early next year, with the final version being released sometime around July or August 2010.

Google Wave – In an Aconex blog post in September, Rob talked about Google Wave, saying:

“I see Wave as a component and enabler of collaboration tools, rather than a replacement. As an example, all the construction collaboration tools on th
e market use email as a component of their solution – it is not a question of one or the other. Software developers often use components to make up a solution, and I see Google Wave as one of those components.”

He reiterated this opinion to me, pointing out that construction collaboration platforms are used to manage “objects” of one kind or another (eg: documents, drawings) that often evolve through various revisions. He suggested waves would simply be another type of object that could be used for processes – particularly where real-time collaboration was advantageous.

Simple file-sharing – I asked Rob if Aconex felt the pressure of low/no-cost solutions. He admitted it posed a dilemma:

“On one hand, it’s good that people want to use technology for file-sharing, and we hope their needs will evolve so that they look for more sophisticated applications like our’s. But if they stick with the small guy’s system, it could get more fully featured and end up competing with us.”

However, he said, Aconex has sometimes found itself competing with solutions where Aconex might be two or three times more expensive, yet a good product can command premium prices and still win the work where clients value quality and reliability. He quoted an analogy used by his chairman, Martin Hosking:

“If you’re about to have a life-saving heart valve replacement, you won’t start looking for valves in the discount store“.

Reaction

Coupling this candid interview with the conversation I had with Aconex’s financial team, I think the company now feels confident enough in its future prospects to begin to invest substantially in its product and services. Aconex felt that it had begun to see growth from about June 2009 and – assuming the current unravelling of the Dubai property boom doesn’t plunge the global economy into a double-dip recession – Rob sounded optimistic about how Aconex might expand its product both in the near future and over the long term. Short-term, for instance, the APIs will accelerate the addition of new features, and the new user interface will also help users find and use this new functionality.

Strategically, incorporating BIM into the collaboration platform is a much more ambitious, longer-term plan, but – to me – it is a necessary one. BIM may not yet be widely adopted, but it is beginning to change how designers and other members of the supply chain will work together. Construction collaboration technology vendors who want to remain competitive cannot afford to focus solely on 2D drawings and other flat file formats. This will be one area where firms like Aconex could well establish some clear blue water water between themselves and the vendors of low/no-cost solutions.

Another area of differentiation will be built asset life-cycle management. Terms like ‘project extranet’ and ‘construction collaboration’ are becoming less appropriate as they allude to just one part of the development cycle – the initial design and construction phase – while much of the information created during that process will be needed to help operate and maintain the asset throughout its working life. Aconex and conject both see this as part of the future for their solutions, and making BIM part of the technology to support the life-cycle will create a powerful asset management solution for many owners and operators.

Permanent link to this article: http://extranetevolution.com/2009/11/rob-phillpot-on-aconex-apis-and-acquisitions/

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