Aconex: CEO Leigh Jasper interviewed (Pt 1)

Aconex CEO Leigh Jasper was in the UK recently, and talked to Extranet Evolution. This first instalment of a two three-part interview discusses outcomes of the Conject acquisition and the development of the Connected Cost application.

Aconex logo 2014The day after an Aconex investor presentation in Melbourne was a good time to get an update on the Australian construction collaboration Software-as-a-Service provider’s recent progress from CEO Leigh Jasper. Unusually, he hadn’t delivered part of the presentation himself.

That 4 May briefing was left to new CFO Paul Koppelman and COO Paul Perrott, who reiterated the Au$160-165m (c. £98-101m, US$122-126m or €113-117m) revenue forecast and the Au$15-18 EBITDA forecast given in January, along with expectations of underlying growth of 15-19%, and 20% revenue growth in the medium-long term. They also gave reassuring messages about sales momentum, reduced Brexit-related uncertainty in the UK, improved conditions in the US, and more stable oil prices. Aconex’s share price has rebounded to around Au$4.50 (it’s now recouped about half of that end-of-January plunge).

Aconex WokingMeanwhile, Leigh Jasper was visiting the UK. I met him in the former Conject offices in Woking (now with Aconex branding – the UK operation also has an office in central London, and the locations would eventually be rationalised he told me, though this won’t affect the development centre in Nottingham).

Conject integration

The office location (which, pre-Conject, had been BIW Technologies’ head office – and my place of work when I worked for the business) naturally prompted some questions about how integration of the Anglo-German business had progressed since Aconex bought it for A$96m (c. £51m) in March 2016.

Some one-off expenses associated with the Conject deal were noted in the investor presentation, but the merger had involved few redundancies, Jasper said: “maybe a dozen or less” out of 220 (I know few of the Woking-based admin and marketing staff remain, while at least one Middle East employee was let go). The rationale for the acquisition had not been about eliminating a competitor and then stripping out costs, but about growth synergies, improving Aconex’s European footprint, retaining a really strong team (“our sales leaders in the UK are all the Conject guys”), and integrating some of Conject’s sector-leading technologies into the Aconex platform.

Jasper felt the integration of Conject into Aconex had progressed smoothly because many of its people had already gone through a similar process and learned lessons from the previous merger (when Munich-based Conject acquired BIW in December 2010).

Conject customer reaction to the acquisition had been very positive, Jasper said. Customers are not being forced to switch to the Aconex platform; current projects managed on Conject (“which is very cost-effective to host and run”) will continue to be supported until they finish (even if this took 5-6 years). Some Conject customers (Mace was mentioned) have already started new projects on the Aconex platform, he said, and “maybe only one” customer had been lost.

Jasper said the deal had made Aconex a stronger proposition to customers that previously would not have considered either Conject or Aconex:

“In the UK market, we are selling in to new customers where Aconex wouldn’t have won them, but the strength of the product combined with the strength of the sales team means we now have a very strong combination. There was probably a bit of under-investment in the UK-based Conject products and having a stronger Aconex platform has helped.”

UK and European customers can now be confident they are dealing with a company with a strong regional presence, while the deal had also extended the technology capabilities, he said.

Connected Cost

Foremost among these was Conject’s Financial Control module, a mature construction project cost management application that, in its early days, had helped differentiate BIW from its UK rivals. Coupled with Aconex’s July 2015 acquisition of US-based vendor Worksite from ARES Project Management Ltd (which “brought us forward several years in being able to get Connected Cost to market”), Aconex now had a strong cost management team (Jasper singled out one-time Conject professional services director Nick Sansome; post) and a powerful cost tool. Aconex Connected Cost was Beta tested with some customers then made generally available in late 2016 ahead of an April 2017 marketing push. It enables Aconex to compete with US-based vendors whose systems have historically been stronger on cost control than on document collaboration. It was proving a strong differentiator, Jasper said.

Leigh Jasper“We are seeing really big interest, and a number of deals have already been done on the product. [American carmaker and energy storage company] Tesla is now a customer of ours and is one we wouldn’t have got without Connected Cost, so it’s helping us win more work, and it’s really important to our customers. Particularly in the US, cost is more important to them than collaboration, and I think our cost product is the best SaaS solution on the market, particularly when you compare it to some of the products built 10 or 15 years ago.”

(The second and third parts of this interview includes discussion of BIM, asset management and mobile technologies, and of growth prospects if construction embraces digital transformation.)

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