Jun 12 2007

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.

Permanent link to this article: http://extranetevolution.com/2007/06/une_tude_intres_1/

Jun 08 2007

Datum KnowledgeWorker

According to a news release on Buildingtalk.com, UK-based enterprise content management software vendor Datum International has released a version of its KnowledgeWorker software aimed specifically at the construction sector. It says the software provides firms with “central control over drawings management and health and safety procedures”.

Reading the Datum website description of KnowledgeWorker it sounds more like a generic internally-hosted intranet solution than a construction-focused ‘extranet’ solution. If Datum are serious about targeting the construction market (I could only find one news release relating to a construction customer – civil engineer Peter Duffy Ltd), I think it would be competing against Union Square and perhaps Business Collaborator, both of whom have implemented intranet-type systems in numerous construction businesses. But its intranet product will not have the strong track record demanded by many construction companies nor deep construction-focused expertise, and it will certainly struggle to compete in the extranet market where there are some very strong on-demand vendors with long experience in the UK AEC sector.

Permanent link to this article: http://extranetevolution.com/2007/06/datum_knowledge/

Jun 07 2007

Une étude intéressante…

Une étude intéressante sur le marché anglais du travail collaboratif – No, I haven’t decided to blog in French, but I found a French blogger interested in what is happening in the UK construction collaboration market.

My French is poor but (with a little help from the Babel Fish website translator) I think the writer, Emmanuel Netter, says the UK market is not dramatically bigger than its French equivalent – a bit less than twice the size (though opinions are apparently very divided on the size of the French market), and worth [2005] around 18m Euros in terms of turnover; and says it is astonishing that, nearly ten years after their foundation, few of the major players are returning consistent profits. In the circumstances, Emmanual then asks how vendors persuade their investors to continue to support them.

Perhaps I can partly respond to this last point by updating the figures. Emmanuel focused on my November 2006 post: BIW’s growth continues – but what about the others?, but I recently updated the figures to produce the diagram for my UK vendor trends post last month – so I thought I would reproduce the table here.

Company year end T/0 2006 T/0 2005 T/0 2004 T/0 2003 PT Profit 2006 PT Profit 2005 PT Profit 2004 PT Profit 2003
4Projects* 31 Mar

2.7

2.1

1.6

1.0

–

0.27

0.13

0.14
Asite 31 Dec

1.354

1.529

1.674

1.697

–0.857

-1.327

-3.962

-2.457
BuildOnline 31 Mar

2.793

2.856

2.462

1.736

-0.963

-0.551

-0.259

-0.697
Bus. Collab. 31 Dec

2.350

1.923

1.476

0.935

0.139

0.004

-1.837

-0.349
BIW 30 Sep

4.660

4.018

3.018

2.691

-0.171

-0.192

-0.516

-0.816
StoreData 31 Dec

1.594

1.150

–

–

0.425

0.181

–

–
Total (£m)

15.451

13.576

10.23

8.059

-1.342

-1.849

-6.444

-4.179
BIW as %

30.16

29.60

29.50

33.39

Perhaps the key word above is ‘trends’. Reading the updated figures and looking at the trends, it seems clear that several UK vendors (eg: BIW [my employer], 4Projects, Business Collaborator) are seeing consistent annual growth which has finally translated into business profits. Presumably each business has been able to predict to its shareholders with a reasonable degree of confidence when sales revenues would finally exceed the often substantial fixed costs involved in delivering its services. Unfortunately, the trend for other UK vendors has not been so consistent.

The European dimension

I would be interested to know if Emmanual has any information on the turnover and/or profitability of companies in the French construction collaboration technology market, particularly BuildOnline (now part of CTSpace), which has had a French-based operation for some time (I recently concluded that, outside the UK, BO was also losing money – see BuildOnline investors nursing losses).

Only last week I read a post (Spotlight shines on SaaS in Europe) on Phil Wainewright’s blog about the emergence of some strong indigenous SaaS vendors in Europe. Phil highlighted analysis from Saugatuck Technology that suggests 2007 will be a boom year for SaaS companies in western Europe, with SaaS adoption set to double (from 16.9 percent in 2006 to 33.8 percent in 2007) – faster than in the US (though Europe tends to lag behind the US in its cultural acceptance of new technologies by about 18 months). Phil then lists a few businesses with significant revenues and user bases. If these are the yardsticks for comparison, then BIW Technologies – with over 80,000 registered users and a 2006 turnover of £4.6m (US$9.2m) – should be considered one of the leading European SaaS vendors.

Permanent link to this article: http://extranetevolution.com/2007/06/une_tude_intres/

Jun 01 2007

Croser v. Baxter (‘Building Design’ collaboration debate)

An IT feature in the 16 March 2007 issue of UK trade weekly Building Design is something of a debate between Joe Croser of Bentley and Autodesk’s Pete Baxter on the future of collaboration. You can read the articles yourselves (available online here), but I have picked out what I think were the key exchanges – I wish I had discovered it earlier because Joe makes some disparaging remarks about web-based construction collaboration technologies (aka ‘extranets’).

Croser criticises

Understandably, Joe talks up the virtues of Bentley’s ProjectWise (“desktop applications and servers which, when used in concert, provide distributed teams with a single solution to manage, find and share all manner of documents”) before attacking online browser-based tools, saying they:

“lack the capabilities necessary for integrating or maintaining consistent relationships. Instead, they provide teams with a transaction-based workflow — a post-and-host approach to issuing project information. … The problem? When a user transacts and downloads a file for use offline, insight into the file’s history and future access control is lost. Work then continues in isolation — disconnectedly — placing quality and co-ordination at risk.”

Joe then completely dismisses the need to centralise information, saying: “centralising information places it beyond easy reach of those who need it the most”, before suggesting:

“Some offerings provide the cavalry with faster horses, but do nothing to improve quality, manage access or protect content after a posted-and-hosted file has been duplicated, downloaded and disconnected from the ftp site.” [An old technology extensively superseded by modern extranet systems – but admitting this would, of course, undermine Joe’s argument.]

Baxter battles back

Pete Baxter does a great job of defending on-demand systems using, naturally, the Autodesk Buzzsaw system as an example of collaboration technology (“a hosted, online site, where all project-related documents — drawings, communications, contracts, schedules, budgets, forecasts, reports and so on — can be kept centrally and securely, while always being accessible to authorised personnel”). He argues:

“… increasingly complex projects, the growing importance of managing risk, decreasing time lines, plus the significantly wider distribution of work, are making traditional workflows seem more cumbersome, inefficient and unreliable. … Successive research reports show that poor communication between organisations is the root cause of many of the problems that afflict a building during its lifecycle, and that miscommunication has the greatest impact on cost, schedule, scope and quality.

“To rise to these challenges, a solution must centralise information, be simple and quick to use, and be fast to deploy. It must also be web-based to enable round-the-clock access from anywhere in the world.”

He also highlights one major downside of Bentley-type approaches:

“… something more flexible and agile is required than an expensive, enterprise-wide project management solution, which has to be passed by the board before investment in it is made, and which then takes months to learn and install.” [Ouch!]

Pete could also have responded to Joe’s dismissive ‘post-and-host’ slur. Buzzsaw, BIW, 4Projects and other leading on-demand systems have substantial in-built security, version control and audit trail features. Information cannot be lost or overwritten, and who did what and when is clear to every authorised team member. I would agree with Joe that there are serious drawbacks with FTP-based systems, but today’s modern construction collaboration platforms have been using totally different technologies for years; it is just plain wrong to suggest web-based tools are no better than FTP.

Buzzsaw and Constructware

Aside from the debate, I was interested in Pete’s comments about Buzzsaw and Constructware. He says:

“Buzzsaw began as a tool for document and design management, but its wider potential is now being recognised at both the construction phase and further into a building’s life cycle. Autodesk’s acquisition of Constructware last year signalled the seriousness of our intent in this direction. Although we have no plans to launch Autodesk Constructware in Europe yet, it seems likely that it will be used to strengthen and consolidate Buzzsaw.”

At the time Autodesk acquired Constructware, I guessed we might see technology from the latter incorporated into Buzzsaw (see post) rather than a launch of another product. However, software development of both products seems to continuing – though I notice that the latest versions of Buzzsaw (2007:3) and Constructware (May 2007 release) were both released almost simultaneously last month, so perhaps there is some convergence.

Permanent link to this article: http://extranetevolution.com/2007/06/croser_v_baxter/

Jun 01 2007

Autodesk acquires Navisworks

Just a few months after Nemetschek acquired Graphisoft (see post), further consolidation of the AEC design software market comes as Autodesk announces that it is acquiring UK-based 3D/4D software vendor NavisWorks – best known for its JetStream design review products.

Permanent link to this article: http://extranetevolution.com/2007/06/autodesk_acquir/

Jun 01 2007

BIW wins 3 Peaks award

A team of my BIW colleagues recently competed in the COINS 3 Peaks Challenge, which involved climbing the three highest mountains in Scotland, England and Wales in a 24-hour period on the weekend of 12-13 May. The team completed the Challenge, raising over £5000 for charity in the process, and – I have just discovered – won a special award for removing litter from Ben Nevis (see Contract Journal article). Well done, guys!

Permanent link to this article: http://extranetevolution.com/2007/06/biw_wins_3_peak_1/

May 31 2007

Digital Construction in Denmark – UK parallels

Thanks to Bentley Systems (more particularly, an e-Seminar from the May 2007 BE Conference), I have just broadened my knowledge of ICT use in Denmark, and there are strong parallels with what is going on in more enlightened parts of the UK construction industry.

PLH Architect Claus Johannessen (with SITE’s Brian Sheldon – good examples of 3D PDF*) explained how use of IFC-compliant 3D models is now mandatory on all significant public projects, along with ‘project webs’ (ie: construction collaboration or ‘extranet’ solutions), digital tendering, and digital handover of documents for operation and maintenance. Johannessen then talked about BIPS (a 600-strong consortium of different AEC consultants, contractors, clients and ICT vendors) which has created manuals detailing standard approaches to managing constructing information. The new Danish building classification standard is now the subject of an implementation initiative to disseminate best practice, funded to the tune of four million Euros.

UK public projects do not yet make use of 3D or extranets obligatory (though some private clients increasingly insist on one or both on their proejcts), but the need for a standard approach to design and construction information has already been recognised.

I think the Danish approach is very similar to that developed in the Avanti project (and the PIX protocol sub-project), now rechristened CEAvanti. The original UK government-funded research project developed the Avanti Standard Method and Procedure (SMP – see previous post), and a new Avanti committee is due to meet in late June to help raise the profile of the SMP and to encourage wider adoption of the Avanti approach. The major difference, of course, is that the UK initiative doesn’t, unfortunately, have a large budget to help spread the word.

* Re: 3D PDF, I see that Adobe has just released Acrobat 3D version 8.

Permanent link to this article: http://extranetevolution.com/2007/05/digital_constru/

May 29 2007

CJ blog renaissance

According to a comment on my 9 February post, First Blogs, then splogs, now flogs (and CJ), no fewer than six blogs are to be launched this week at UK trade journal Contract Journal.

(If you want lots of video of construction equipment in action and other construction-related stuff, the blog of commenter, James Stafford, has loads of YouTube links!)

Permanent link to this article: http://extranetevolution.com/2007/05/cj_blog_renaiss/

May 29 2007

BuildOnline investors nurse losses

Ireland’s Sunday Business Post has reported that “early investors in early investors in Dublin online firm BuildOnline are nursing losses after the firm merged with a US company”.

Founded in Ireland, BuildOnline quickly relocated to London during the dot.com boom, and – positioning itself, first, as an e-construction marketplace, then, a provider of construction collaboration technologies (aka: ‘extranets’) – it then burned its way through around €30 million of funding raised in 2000 and 2001. Late last year, it merged with US firm Citadon to form CTSpace (see post), raising new funds from two American funders, Insight Venture Partners and GRP Partners (see post).

According to the newspaper’s Gavin Daly: “Industry sources said that BuildOnline’s early investors, including Delta partners in Dublin, had lost money on the deal.” It then describes BO’s final financial maneouvres before the Citadon merger:

“In the financial year to the end of March 2005, BuildOnline (Holdings) had turnover of almost €6.2 million [£4.2m] and made a pre-tax loss of €1.6million [£1.1m].
It had an accumulated loss of €35.8 million [£24.4m] at the end of the financial year.
According to the firm’s accounts, BuildOnline received a bridge loan of €3 million [£2.1m] in August 2005 to finance its future development. In May 2006, the loan was converted into shares in the company, and the firm raised a further €2 million [£1.4m] in equity funding.
The investors in that round included Mark Suster, the former chief executive of BuildOnline. The firm said it would use the money to establish US operations, increase research and development activities in India and open new offices in the Middle East and central and southern Europe.”

This confirms the sorry picture of BO finances that I described in January, looking at its UK business (see BuildOnline UK position worsened). Assuming ‘BuildOnline (Holdings)’ is the overall holding company for all BO businesses, we can see that two-thirds of its 2005 turnover originated from the UK business; the latter also accounted for half the group’s pre-tax loss. In other words, in the year to March 2005, BO’s non-UK operations turned over about £1.4m and made a loss of about £0.5m.

Permanent link to this article: http://extranetevolution.com/2007/05/buildonline_inv/

May 23 2007

BC continues to thrive

Further to my UK vendor trends update last week, I see Business Collaborator ‘s business continues to thrive. According to a Coda plc trading update:

“The Business Collaborator division has continued to grow across all areas of its business. Highlights include a new release (version 5.1) of the core Business Collaborator product. This has helped to secure new contracts such as with Westfield for the Stratford City project (currently the UK’s largest construction project) and has seen increased usage of our products and services throughout the customer base. There has also been a relaunch of the “WideXchange” Property Refurbishment software already deployed in the Nationwide Building Society; and further enhancements to Sedex (Suppliers’ Ethical Data Exchange) used by Tesco, M & S, Debenhams, John Lewis and other major retailers and suppliers. Sedex now has over 12,000 member sites worldwide and continues to grow at the rate of over 500 sites per month.”

No financial figures to analyse, but it sounds positive. As with other vendors’ non-collaboration products, I would be interested to know what proportion of BC’s turnover is attributed to Sedex.

Permanent link to this article: http://extranetevolution.com/2007/05/bc_continues_to/

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