Oracle building its construction offering

A Construction Index news story today about the Bank of England’s decision yesterday to reduce the central bank interest rate to 0.25% highlighted once again the UK construction industry’s poor record on prompt payment. It quotes the National Federation of Builders’s chief executive Richard Beresford: “The construction industry has the worst payment record of any sector, with 31% of all late payment in the UK. Construction SMEs are owed more than £30bn in unpaid invoices.”

According to the NFB, the interest rate cut will affect how late payments are calculated. The Late Payment of Commercial Debts Regulations 2013 allows companies owed money to charge interest at 8% of the debt plus the Bank of England base rate. With interest rates cut, the amount of money that creditor businesses may claim will also fall.

Previously, this would undoubtedly have caught the attention of construction payment (CPM) technology provider Textura Europe, but I didn’t spot any @Textura_Europe tweets from its Slough UK office.* However, this may be because the business, like the rest of Textura Group, has been adjusting to life under new owner, Oracle. The US tech giant announced in late April 2016 that it was acquiring Textura for US$663m (Textura news release).

Oracle’s Textura deal heats up collaboration battle

Oracle is, of course, no stranger to construction – in 2007 it acquired Cimmetry, developer of the popular Autovue browser CAD viewer plugin (later rebadged as an ‘enterprise visualisation’ tool), and its project management software Primavera is widely used in the sector. The acquisition of Textura’s cloud-based CPM services will extend the reach of Oracle’s cloud-based services, with some 85,000 contractors – mostly in the US – in the Textura network, and over US$3.4 billion in payments processed per month. Textura launched an Australian operation in 2012, and two years later appointed former Conject CEO Colin Smith to lead its European push, which focused particularly on subcontractor payment management and included a trade financing service (2015 post).

Oracle plans to integrate Textura with Primavera’s project, cost, time and risk management toolset in a new Oracle Engineering and Construction Global Business Unit. While I didn’t particularly consider Textura a key player in the construction collaboration market, the Oracle deal does open up some potentially interesting new battlefronts and/or integration opportunities.

For example, Oracle already has a cloud-enabled Primavera NEC3 toolset, which pits it against vendors of contract change management applications – both stand-alone solutions such as UK-based MPS, Sypro and CEMAR (formerly CMToolkit – post), and the NEC toolsets of SaaS construction collaboration platforms such as Viewpoint for Projects, the now-Aconex-owned Conject, and Asite (post). [Update (5 August 2016, 17:00 BST): Should also mention here Oracle’s Primavera Unifier which has NEC capability and links to BIM via Ecodomus (thanks, Mace’s Crawford Patterson); Ecodomus was also mentioned by Graham Kelly at ThinkBIM last month – post].

Textura already dominates the CPM sector in the US, and has made strong inroads in Australia (competition there includes Progressclaim – post) and begun to establish itself in Germany and in the UK (where OpenECX’s WebContractor is also competing). (A thought: could the Textura CPM and trade financing technology also be extended by Oracle to industry sectors outside construction?)

And the continued adoption of so-called ‘5D BIM’ where cost information is incorporated into the building information modelling process, could also open new contests, playing to Oracle’s strengths in cloud-based enterprise resource planning software, and pitching it against SaaS construction incumbents such as Viewpoint (post), Bentley Systems’ EADOC (post) and Aconex’s Worksite (post) and Conject financial control applications.

[* Disclosure: I have undertaken consultancy projects in the past year for Textura Europe.]