Dec 31 2008

Reviewing 2008

Just as I did last year (see Reviewing 2007), I have been looking back at my five predictions for 2008 (see one, two, three, four and five for more detail).

1. Further polarisation of the UK construction collaboration marketplace.

I do think the UK market has polarised a little further, though the trend may have been slowed by the global financial crisis in the second part of the year with its resulting impact on investment in technology and Software-as-a-Service firms.

The most significant event was Aconex’s funding round (see Aconex gets private equity injection, September), though the November revelation (Aconex reports…) that not all the AU$107.5m – only AU$57.5m – was being delivered immediately took a little of the gloss off. I had hopes that BIW Technologies [my employer] might also have secured a new round of funding, but the market conditions put paid to that – as a report in today’s Financial Times makes clear.

(This may also be a blessing in disguise, particularly as some commentators (eg: Jeff Kaplan) are suggesting there may be less appetite for investment: “Many VCs will be forced to put a moratorium on new investments, others will refrain from making additional investments in current portfolio companies, and some will shut their doors entirely”.)

However, I was correct in forecasting a shift from pure document management towards process management among more of the UK-based collaboration vendors (see The new ‘extranet’ battleground, October).

2. Increased interest in online BIM-based collaboration.

My personal interest in this area has continued to grow (see my BIMaaS post, for example, and this post), but industry demand for BIM-based collaboration has not increased dramatically – at least not in the UK. As I have written elsewhere this week (see UK architects going green but lagging behind US on BIM), UK designers seem more hesitant than their US counterparts when it comes to embracing BIM – a view also confirmed at the BuildingSMART conference in June.

3. Collaboration vendors to push SaaS and sustainability

There has been some signs of this. Of course, on behalf of BIW, I created a blog on SaaS and sustainability (SaaStainability.com), and Aconex announced it was supporting the drafting of the Sustainable Environment Foundation’s ‘green paper’, but, otherwise, the collaboration technology vendors’ focus has tended to remain on paper savings.

4. Recession to have impact upon the collaboration technology market

Sadly, this was perhaps the easiest prediction to fulfil, and most of the impacts are already being felt.

Certainly, we have seen projects mothballed or even cancelled altogether, and there are signs that recent rapid growth among the colllaboration vendors will not be sustained in 2009, even if cost savings and the efficiency savings of SaaS do help to make SaaS-based collaboration more attractive to cash-strapped clients, contractors and project managers.

5. Social networking and other Web 2.0 application features begin to overlap into construction collaboration

This prediction has started to come true, I think. Again, because I work for one of the leading UK vendors, I have seen at first hand how the range of communications channels can be expanded by Web 2.0 (BIW even has its own Twitter and RSS feeds now – as do several of the mainstream construction industry journals). I’ve noticed a few more collaboration blogs, even an industry wiki, and – as one of the co-organisers of Be2camp 2008, the construction industry’s first ‘unconference’ – I also tried to stimulate some new ideas on how Web 2.0 tools and techniques might impact on the day-to-day lives of architecture, engineering and construction professionals interested in creating a more sustainable built environment.

I notice that Asite has described itself as “a Web 2.0 software platform for the construction industry” (see this YouTube video, for example – was this what Asite CEO Tony Ryan was thinking about in July when he talked about “sales and marketing 2.0”?), but – as I wrote in March – I’m not convinced that construction collaboration platforms can really be described as Web 2.0.

Predictions for 2009

coming soon…

Some statistics….

Despite its focus on a niche area of interest, 2008 has been another record-breaking year for this blog. In 2008 this blog has delivered 43,280 page downloads to 28,546 unique visitors, including 8,978 repeat visitors (up from 36,500, 22,500 and 8,200 respectively in 2007). Peak day for page views was Monday 30 June (290), while 23 June saw the most unique visitors (176). Thank-you everyone.

Permanent link to this article: http://extranetevolution.com/2008/12/reviewing-2008/

Dec 22 2008

PCM acquired by Confluence, KOL gone

Late last month, I wrote about Pettifer Construction (a website holding page now says the “Company has now ceased to trade” and gives contact details for the administrators), its construction management business, PCM [a PR client of mine in the late 1990s] and its specialist IT firm, KnowledgeOnline.

There had been a report of interest in PCM from Dutch consultant Grontmij and from UK firm Baqus (refuted in Contract Journal), and then Thomas Vale and McBains Cooper, but today, I read (again in Building) that PCM has been acquired by Australian project management business Confluence, securing the jobs of 65 UK staff (see also Confluence news release). Confluence, by the way, is a customer of Australia-based construction collaboration technology vendor, Aconex.

Knowledge Offline

However, KnowledgeOnline has also ceased trading. It marketed E-Safe 100, a product of sister company E-Safe Ltd for whom administrators were appointed on 1 December (Causeway Technologies announced the acquisition of E-Safe 100 just over a week later); and a meeting of KOL creditors was held last week. This sudden collapse comes less than a month after KOL won a Construction Computing Award for E-Safe 100.

I also read – in last week’s Contract Journal – sad stories of Pettifer Construction people carrying off computers and printers in lieu of unpaid wages and outstanding expenses.

Permanent link to this article: http://extranetevolution.com/2008/12/pcm-acquired-by-confluence/

Dec 19 2008

AfterCAD Joins the SaaS Movement

On Cadalyst.com, Kenneth Wong reviews a new Software-as-a-Service (SaaS) application from Vancouver-based AfterCAD, called AfterCAD Online. Essentially, it is a service for sharing, viewing and commenting on CAD files. Nothing new in that, of course, but this one includes the capacity to display and manipulate 3D files. Publishers of CAD files can sign up for the service, which costs from $39.95 a month, and then share their files with fellow collaborators – who can access the files freely via any standard web-browser. AfterCAD Online allows full rotation, enabled by an open-source rendering engine OGRE.

Competing pure-SaaS drawing viewer products include Autodesk Freewheel and a new product from SolidWorks Labs called Drawings Now (both currently free). Kenneth also mentions Informative Graphics‘ Brava!, which he notes is a thin-client solution (requiring download and installation of a small file to communicate with the other software components hosted elsewhere), and he could have added another viewer widely used in the AEC sector: AutoVue – though these are both 2D viewers.

Meanwhile, the 3D market is growing. Brava! now has a 3D/2D stablemate called Myriad and the 2D version of AutoVue (now owned by Oracle following its May 2007 acquisition of Agile, which acquired Cimmetry in 2005) has a 3D counterpart: AutoVue 3D Professional Advanced.

But if pure SaaS offerings like AfterCAD Online catch on, Kenneth says, thin-clients may eventually thin out.

Permanent link to this article: http://extranetevolution.com/2008/12/aftercad-joins-the-saas-movement/

Dec 18 2008

Another Asite director steps down

According to a London Stock Exchange announcement, Peter Rogers (technical director and co-founder of Stanhope Plc) has resigned from the board of UK construction collaboration provider Asite plc with immediate effect. It adds: “An announcement regarding Mr. Rogers’ replacement will be made shortly.”

Earlier this year, BAA executive Mathew Riley also resigned as a non-executive director of the company, but was not replaced.

Permanent link to this article: http://extranetevolution.com/2008/12/another-asite-director-steps-down/

Dec 18 2008

Recession effects

The different headlines about the same National Computing Centre study (see press release) all suggest the current economic downturn is having some impacts on IT investment decisions, affecting the balance between Software-as-a-Service (SaaS) and conventional internally-hosted applications:

‘Cloud computing’ and virtualisation – at both the server and desktop level – both get discussed in the ComputerWeekly.com article: “Virtualisation has almost been seen as a universal panacea for both cost saving and providing a ‘greener’ IT environment,” said Cliff Mills, NCC’s research manager.

Permanent link to this article: http://extranetevolution.com/2008/12/recession-effects/

Dec 17 2008

Running the AEC IT function

There is an interesting article in the latest AECbytes in which Linda Letourneau, director of technology at US-based planning and design practice LandDesign, describes how she achieved a turnaround in user satisfaction in her firm after implementing better technologies and changing the focus of its IT group.

Her starting point was to recognise that the ICT department is a support department. Within an AEC organisation, we cannot assume that everyone will have good ICT knowledge. Linda says:

“Technology staff need not scoff at the questions of users. That attitude does not make IT look smarter, and it makes the IT staff less effective with their user community. It is critical that the people in my department have people skills to match their technology skills.”

I know that many AEC professionals can be apprehensive about dealing with their ICT support teams, sometimes regarding them as arrogant or patronising, or feeling that ICT is not helping but placing obstacles in their way. This is a big no-no, as Linda says: the next requirement is that ICT understands the firm’s processes:

“If a technology responds to a need represented by a business process, that technology will be embraced by its user community.

Here, Linda uses the example of LandDesign’s need to transfer large files securely between offices, where her team deployed Newforma Project Center (I would take slight issue with her statement that web extranets “fail to integrate with internal systems such as Outlook email” – the AEC-specific project control platform delivered on a SaaS basis by UK-based BIW Technologies [my employer; also now used on some US projects] does have an integration with Microsoft Outlook and would meet her other criteria: secure, audit trail, low IT intervention). Here, her ICT department also became proficient in using the software and in training other company users.

Update (18 December): Regarding Outlook Integration, I read that Meridian‘s Prolog Connect acts as a Web Services platform extension for Prolog Manager, allowing convergence between the Prolog project management system and Microsoft productivity applications including Outlook.

I have also just read a post on Web 2.0 adoption from Ross Mayfield at wiki company Socialtext, that is relevant here. Echoing McKinsey, he distinguishes between ICT initiatives that emanate from the IT department and those started by Line of Business (LoB) executives:

IT-driven implementations had 60% user dissatisfaction, whereas LoB-driven had 74% satisfaction.  … LoB implementations have greater engagement and adoption.  I believe the best approach is to partner LoB with IT … for the benefits of top down and bottom up adoption.

Permanent link to this article: http://extranetevolution.com/2008/12/running-the-aec-it-function/

Dec 15 2008

Nick Terry

Catching up with the newspapers over the weekend, I read Ruth Slavid’s Guardian obituary of Nick Terry, until 2006 head of Building Design Partnership (BDP), who died on 1 December of cancer aged just 60.

I first met Nick when he was part of the team working on the redevelopment of the Royal Opera House in London (I was with Tarmac Professional Services in those days and its construction management arm, Schal, was employed on the project), and renewed our acquaintance when he became chairman of the UK chapter of the International Alliance for Interoperability (now buildingSMART) – reflecting his belief that information technology lay at the heart of achieving integrated collaborative working. Sadly, there are too few people at the helm of today’s construction businesses that share that view and who are prepared to invest time and effort in realising that vision.

Permanent link to this article: http://extranetevolution.com/2008/12/nick-terry/

Dec 12 2008

Lower cost of ownership driving SaaS adoption

Thanks to an email from Rishi Seth at Springboard Research, I have learned that decision-makers from small, medium and large enterprises across Australia and New Zealand (ANZ) have described lower cost of ownership as the most significant reason for adopting Software-as-a-Service (SaaS), ahead of other factors such as ease of use and management (see news release).

Springboard forecasts that the ANZ SaaS market will register a compounded annual growth rate of 55% between 2007-2011 and reach AUD 683 million – that’s about £300 million – by 2011.

Existing software is apparently a barrier to SaaS adoption. Half of Springboard’s survey respondents said they had no plans to adopt SaaS due to existing investments by their organizations in on-premise applications. Other reasons for not adopting SaaS included a lack of clarity about benefits of SaaS, lack of technological maturity and no business requirement.

SaaS deployment is also relatively immature. Most respondents are using SaaS applications in isolation; only 20% have integrated SaaS applications with traditional enterprise applications and fewer still have enabled integration between SaaS applications.

Permanent link to this article: http://extranetevolution.com/2008/12/lower-cost-of-ownership-driving-saas-adoption/

Dec 12 2008

Aconex (UK) Ltd – 2007 update

A Companies House filing of report and accounts for Aconex (UK) Ltd, the UK arm of Australia-based construction collaboration technology vendor Aconex, showed that it had a turnover in the year ending 30 June 2007 of £588,035 (up from the previous year’s £325,391). It made a small pre-tax loss of £12,383 – a big improvement on the previous year when the UK business lost £332,065.

These results broadly reflect what Aconex’s Frank Carron told me last December, but have to be looked at in the context of the whole Aconex group – which, as outlined last week, turned over AU$41.6m (£17.7m) in the year to 30 June 2008. Revenues attributed to the UK operation in 2007 then comprised just under 6 per cent of the group’s worldwide turnover.

Permanent link to this article: http://extranetevolution.com/2008/12/aconex-uk-ltd-2007-update/

Dec 11 2008

BIW grows 27% to September 2008

UK-based construction collaboration software-as-a-service (SaaS) technology vendor BIW Technologies [my employer] grew its turnover 27% to £7.3 million in the year to 30 September 2008, it announced yesterday, with profits more than doubling to £1.1 million; the value of unrecognised revenues in the order book was up to £12.77 million (see news release). On both turnover and profitability metrics, this was an acceleration on BIW’s 2007 performance.

Echoing my view last week that the Economic climate will accelerate SaaS, BIW CEO Colin Smith says:

“This year has been our most successful to date in terms of revenue and profits. We operate in the SaaS sector, which is recognized as being relatively recession-proof, because there is much less up front investment required from clients, its low risk and there is a faster return on investment, therefore we should do well even in these difficult economic conditions.”

BIW’s figures maintain its significant lead among the UK-based vendors, and echo the strong performances achieved by SaaS competitors in the AEC market such as Australia-based Aconex (see 25 November post) and UK rival 4projects (14 July post). But could this year’s rosy numbers be the last high-growth figures presented by any business in this space for a while?

The end of the good times?

While the SaaS model SaaS gives visibility and resilience to a company’s forward revenues and cashflows, all of the construction collaboration technology vendors are working in increasingly tough market conditions. The current downturn is having a savage effect across the construction industry and its technology providers cannot be completely immune. Companies (eg: Pettifer) are going into administration weekly, people are being laid-off, and many projects – particularly in the private sector – are being cancelled, postponed or mothballed (including PFI projects – see CNplus).

With fewer ongoing projects around, software providers will face stiffer competition. Sadly, this may manifest itself, as elsewhere in the AEC sector, in clients and their project teams trying to cut costs by awarding work to the cheapest provider (a high risk strategy, particularly if the vendor ultimately cannot afford to keep trading at those rates, or if the chosen technology isn’t reliable or functional enough to meet the scale and complexity of the challenge). Alternatively, clients may simply decide that they can manage their projects using conventional tools such as email, CDs and piles of paper (again, a risky, short-termist strategy that opens the way to claims and disputes about late, lost or inaccurate information – with no secure audit trail to show who did what and when).

On the upside, clients may be even more conscious that they need to maintain tight control over construction budgets and programmes. Teams could decide that they want the security of a reliable project control platform to speed up processes, eliminate waste and rework, and to keep everything on track.

However, as I wrote last month (see Recession and the construction SaaS providers), potential customers must look closely at the financial resilience of any vendors they shortlist. Some providers – particularly those reliant upon small customer bases working in depressed sectors – may be unable to withstand a prolonged downturn or significant downward pressure on fees.

Permanent link to this article: http://extranetevolution.com/2008/12/biw-grows-27-to-september-2008/

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