Feb 12 2008

INCITE = ThinkProject!

Just last week, I was discussing the state of the Australian AEC collaboration market. Following that conversation, I decided to have a look at what other domestic players in that market had to offer. Putting Aconex into context, I have already mentioned QA Software in the past (see 4 July 2006 post), so I examined what used to be called Optus InCITE, only to discover that the collaboration solution’s origins are distinctly European.

INCITE is today marketed in Australia and across Asia and the Middle East (it has offices in Singapore and Dubai) by Nexus Point Solutions, who acquired the business in May 2006 from Australian telecoms business Optus.

As an aside, Nexus is an interesting company itself, having been established as a dot.com venture, AAECVenture, by Australian construction giant Leighton Holdings in 2000; it changed its name to Nexus in April 2006. To industry watchers like myself, the name immediately rings a bell: AECventure.com was one of several construction industry internet initiatives that crashed during the early 2000s (despite the backing of leading companies Amec, Bovis Lend Lease, Hochtief, Turner and Skanska).

INCITE incorporates an abbreviation for “Construction Industry Trading Exchange”, and reflects the origins of the business; it was to be a portal focussed at delivering document management, tender management and e-procurement solutions to the construction industry. Optus inCITE was launched in Australia in June 2003, with several major construction businesses said to be committed to using the platform, including Barclay Mowlem, John Holland, Leighton Contractors, Thiess and Walter Construction. Technology partners included EU-Supply (tendering software), Berlin-based AEC/communication (who provided ThinkProject! document management software) and Conexa (purchasing software). However – and similar to the UK market 2-3 years earlier – the Australian AEC market was not ready for online trading exchanges and the focus shifted more towards document collaboration – just as it did for the “Australian Construction Exchange”: or Aconex.

Today, Nexus Point Solutions is a joint venture between Leighton Holdings (now part-owned by Hochtief, of course) and Baulogis GmbH, the current owners of AEC/communication – renamed in October 2007 as ThinkProject! Solutions. Martin Boelter, one-time MD of AEC/communications, was appointed to lead Nexus Point in 2006. Baulogis created a few ripples in the AEC design and collaboration markets a year ago (February 2007) when it entered into a “far-reaching agreement” with Nemetschek to jointly develop and market collaborative solutions for construction projects, initially connecting Nemetschek applications to Baulogis’ ThinkProject! platform.

ThinkProject! was also deployed by UK collaboration provider Asite and initially branded as Asite Enterprise Workflow following a June 2004 agreement (the Asite website still lists AEC/communication as an Asite partner, although the Enterprise product seems to have disappeared; I  also recall there being an Asite Enterprise Content Management solution, but that too is no longer visible).

Update (22 April 2008): See update post incorporating an email from Nexus’s MD here.

Permanent link to this article: https://extranetevolution.com/2008/02/incite-thinkpro/

Feb 06 2008

Undersea hassles

Apart from what I call the Mihoogle (Microsoft/Yahoo/Google) situation (see previous post), software and internet issues also hit the mainstream media headlines last week following damage to undersea cables linking large parts of the internet.

As BIW has expanded internationally, such problems have also affected our business: until Indian-based ISPs could reroute traffic around the Egypt breakage, our connections with BIW’s Indian development and support office in Vadodara battle slowed dramatically. There were further problems in the Red Sea on Friday when it was discovered that a cable off the coast of Dubai had been cut, and, over the weekend, another cable, between the UAE and Qatar, was also reported to be damaged – prompting some bloggers, a little tongue-in-cheek, to suggest a conspiracy to disrupt the internet (see Nicholas Carr’s Who cut the cables? for example).

Update (08 February 2008): Latest reports suggest the breakages should be repaired this weekend.

Permanent link to this article: https://extranetevolution.com/2008/02/undersea-hassle/

Feb 06 2008

Microhoo, Yasoft, Mi-hoo, etc …

Pity the poor analyst at Forrester Research who predicted last week that the wave of mega-acquisitions in the software industry was over for now (see InfoWorld article, for example), adding Microsoft will be ‘the least active’ in terms of acquisitions. Just days later, Microsoft announced a $44.6 billion unsolicited hostile bid for Yahoo (prompting suggestions of hybrid names to describe any future software behemoth resulting from such a move – I like the Myspace associations of Mihoo myself).

Much of the mainstream media focus has been on the online advertising revenues and search and portal opportunities, and the perceived strategic need to compete with Google – who have since responded by raising monopoly concerns. I, however, have been more interested in the views of some commentators who see this battle as a potential turning point in the Software-as-a-Service (SaaS) movement, suggesting a successful Microsoft acquisition of Yahoo would help the Redmond giant kick its SaaS plan into high gear (see, for example: Microsoft’s Yahoo Offer Sets Stage For SaaS Battle With Google and Yahoo acquisition to boost Microsoft Saas offering).

Yahoo’s web services include a widely used hosted email service, plus Web2.0 offerings such as Flickr and del.icio.us. and Yahoo is predominantly a services business, while Microsoft remains predominantly a conventional software business – so the acquisition would appear to fit with the latter’s ‘software-plus-services’ strategy. However, assuming the deal were to go ahead, I think they make uneasy partners. The strategic ‘fit’ satisfies Microsoft, but as a way to compete with Google, which has made such a success of being a pure services business, it doesn’t seem logical. As the excellent Phil Wainewright argues here, the leading services players, including Yahoo and Google, essentially deliver software-powered services. Software and services are not separate: today’s successful SaaS businesses use a lot of software, but host it so that customers don’t have to do it themselves (thus incurring huge fees to license software – from Microsoft and others – and to maintain their own hardware).

So, it’s not a case of providing two alternative approaches. More and more organisations simply don’t want the hassle of in-house hosted applications and hardware. They are actively seeking pure services solutions, and Microsoft’s current hybrid strategy simply won’t appeal to them. Perhaps more interesting would be an alliance between Yahoo and Google to become an even bigger pure services business to truly test Microsoft’s software-plus-services strategy.

Permanent link to this article: https://extranetevolution.com/2008/02/microhoo-yasoft/

Feb 01 2008

No new CTSpace … yet

After Sword Group’s acquisition of collaboration vendor CTSpace (see CTSpace put to the Sword), the home page of the CTSpace website carried news of the change of ownership and promised “Our new website will be available in January”. It’s now February….

Update (5 February 2007): The French version of CTSpace’s website says the new site will appear in February – thanks, Emmanuel, who adds: “they have till the 29th this year ;)”. Update 2 (13 February): CTSpace now says “Our new website will be available soon”. Update 3 (7 March): new Sword and CTSpace websites are “scheduled to be available by end of March”.

Permanent link to this article: https://extranetevolution.com/2008/02/no-new-ctspace/

Feb 01 2008

How big is the AEC SaaS market?

Suvendu, commenting on my first SaaS and construction collaboration in 2008 predictions post, asks “do you have an idea about the market size of SaaS for Construction industry?”

I suppose the answer to the question depends upon how you define the market and then how you measure it…. So, sorry if this is quite a long answer….

Look at numbers of users, seats, etc?

This is fraught with difficulties. While some construction collaboration platforms are sold on a per-user basis, most of the leading UK systems adopt a ‘looser’ approach intended to encourage take-up and collaboration. Typically, these providers offer their systems on a per-project or per-programme basis, placing no limits on the numbers of users. However, getting accurate figures on how many users each system has is very difficult (I have written about this before – here and here, for example), as some vendors give no information about take-up of their systems at all. Others (BIW [my employer] and Asite spring to mind) are quite open about how many users they have registered, but even these figures need to be treated with care.

One cannot, for example, simply total the published figures and arrive at a total user population for all systems: given that many users may be involved in multiple projects each requiring use of different systems, some users may each be counted several times each. It can also be difficult to distinguish between people who actually log-in to use a systems (active users) and those who are simply registered as users just in case they might need to log-in one day but never do (non-active users). The time period is also key. Since 2000, for instance, around 100,000 users, from across 10,000 organisations, have been registered to use the BIW platform, but active users back in, say, 2001 may no longer be active users, or they may have moved jobs and re-registered (more double-counting). As a result, instead of counting users, BIW has begun to focus on metrics indicating volume of usage during each financial year, eg: number of user sessions, total number of documents and drawings published, etc (we should be publishing some new figures shortly).

Then there’s the potential user community…. The construction industry is the biggest sector of the UK economy, with 186,000 private contractor firms, according to the 2007 Construction Statistics Annual. More than a third of these are one-person outfits; only 6,000 of them have 25 or more employees. And this excludes 23,500 professional firms – where, again, there is a similar preponderance of small and medium-sized enterprises – and the materials producers and component suppliers, and the all-important customer organisations. So, over 200,000 firms in the industry itself, and over two million individuals, plus clients and supply chains. It’s a huge market and that’s only thinking about the UK….

Look only at SaaS collaboration?

While my interests are mainly focused on what we currently describe as construction collaboration technologies, there will doubtless be other SaaS-based applications that could be deployed within the AEC market. For example, some AEC firms will doubtless be using SaaS-based Customer Relationship Management tools (eg: Salesforce.com), accounting/ERP (eg: Netsuite), human resources, e-commerce, etc; some may even be tempted away from reliance on standard Office software by Google’s SaaS-based Google Docs suite. When the SaaS revolution is potentially extending right across the enterprise, then the AEC market opportunity could be collossal.

 

Look at AEC SaaS revenues?

I could make a reasonable stab at estimating the value (ie: revenues generated) of the leading UK construction collaboration technology vendors. In my presentation at the Construction Computing Show 2007, for example, I calculated the combined turnover of seven providers – BIW, 4Projects, Business Collaborator, CTSpace, Asite, Styles & Wood’s StoreData division, and Aconex‘s UK operation – was somewhere around £18 million in 2007.

However, treat this figure with great care. For instance, this figure:

  1. excluded Autodesk Buzzsaw and several of the smaller AEC-focused vendors (eg: Cadweb, Sarcophagus, ePIN, e-Box, etc) for whom I can glean little or no financial information
  2. excluded vendors of more generic information management solutions that might also be used for construction collaboration (eg: Union Square’s WorkSpace, Microsoft SharePoint)
  3. made no allowance for revenues generated from providers’ training and consultancy services (as distinct from SaaS subscription income)
  4. made no allowance for income related to other products or services (eg: Business Collaborator’s Sedex activities), or from non-SaaS implementations (some vendors offer this as an option for customers who prefer to host the software themselves)
  5. may include revenues generated outside the UK, but accounted for by a UK-based parent

Clearly, even if you focus just on one geographical market, it is difficult to make an accurate estimate.

Relate SaaS collaboration to the size of the industry?

The AEC industry is one of the biggest sectors of the UK economy. It contributes about 10% of the UK’s gross domestic product, an annual output of over £100 billion (£113bn in 2006, again according to the 2007 Construction Statistics Annual). OK, a significant proportion of this relates to repair and maintenance rather than new-build, and there will be a large number of projects where use of a collaboration platform just wouldn’t be economically feasible, but the figures are still mind-boggling. And, even assuming that expenditure on construction collaboration technologies is included in these figures (and assuming the £18m figure is about right), it amounts to a tiny fraction of a percent (about 0.016%, if my maths is right) of total UK output.

Then, again, you could add together all the values of all the different national markets around the world…. north America, mainland Europe, Middle East
, Asia Pacific….

Look at the construction values of the projects where SaaS solutions are deployed?

An alternative approach would be to work out the total capital value of the project and programmes where SaaS construction collaboration solutions are being used. Several vendors have used this ploy over the years, partly because it tends to give an impressive-sounding multi-billion figure. Aconex, for example, says that “Clients have selected Aconex for projects valued at over $180 billion” (I assume that’s Australian dollars – in which case it’s about £82 billion or US$160), while Cadweb claims a more modest US$15 billion.

As with the other methods, it can be difficult to compile reliable figures. For example:

  • Are we talking about total project values, or just the costs of the elements where the collaboration tool is used?
  • Do project values include land acquisition costs, professional fees, etc?
  • Who, if anyone, provides the project value? (In my experience, some customers can be reticent about giving a total project value, and if you are dealing with a contractor or other supply chain member, they may not even know the total figure – just the figure for the contract or package with which they are involved)
  • Framework agreements may cover programmes of work worth many billions, but the tool may only be deployed on some, not all, of the programme.
  • Similarly, enterprise deployments may allow a firm to use the solution on all of its projects, but there will always be some where it is just not economic or practicable to do so. The vendor might seek to suggest that its application is supporting a £100m workload, when the actual figure might be half or less that figure.

Permanent link to this article: https://extranetevolution.com/2008/02/how-big-is-the/

Jan 31 2008

Business Collaborator parent reaches agreement with Agresso

 

According to a London Stock Exchange announcement this morning, the boards of Unit 4 Agresso and Coda plc (parent company of construction collaboration technology vendor Business Collaborator) have agreed the terms of a recommended cash offer for Coda, valuing the business at approximately £158m (see previous post).

The strategic rationale is to create “a leading pan-European mid-market enterprise resource planning (“ERP”) software solutions provider” that will be a “leading player in the UK, Benelux, Spain and the Nordic regions, with strengthened market positions in the French, German and US markets”. On the face of it, the focus on ERP doesn’t seem to encompass the activities of Business Collaborator, though – as previously noted – its experience of Software-as-a-Service (SaaS) delivery may still be valuable to Coda as it launches a portfolio of SaaS-based financial applications (Coda2go) in conjunction with Salesforce.com. It is not, however, a major part of Coda. Business Collaborator accounted for just £2.35m (4.4%) of Coda’s £53.5m turnover in 2006, but its revenues have been growing, up 18% in the first six months of 2007, and it is profitable.

The Business Collaborator team are at least used to changes of ownership. Established in Reading in 1997, it was part of the software solutions arm of the Enviros environmental consulting and software group until acquired by CodaSciSys in April 2003 for £2.82m. In September 2006, CodaSciSys demerged, Business Collaborator becoming a specialist subsidiary of Coda plc.

Permanent link to this article: https://extranetevolution.com/2008/01/business-collab-3/

Jan 29 2008

SaaS and construction collaboration in 2008 (3)

Here, at long last, are my final two predictions for 2008 (see numbers one, two and three).

4. Recession to have impact upon the collaboration technology market

With gloomy economic predictions almost daily at the moment, it is pretty safe to predict that any UK recession will have impacts upon the construction collaboration technology market, though not always negative ones. For instance:

  1. The flow of projects may slow down, some projects may be mothballed, with a consequent reduction in opportunities for owners’ supply chains, including technology vendors.
  2. However, project teams may become keener to manage their project overheads. More efficient management of communications is one way in which teams can trim their costs and help maintain a margin.
  3. In the same vein, IT services delivered on a Software-as-a-Service (SaaS) model will also become more attractive to customers deterred by the high upfront costs of conventional software (see SaaS will soar). Low expenditures spread predictably across the life-cycle of a construction project will be a significant benefit for some hard-pressed finance directors.
  4. The market may also become even more competitive price-wise. Speaking to a couple of other UK vendors before Christmas, we had all already noted very aggressive pricing by some providers in order to win work, perhaps as loss-leaders to establish new relationships, or to prevent a customer falling into the hands of a competitor (of course, if the screws tighten further, prudent customers will need to certain that the provider’s pricing is not suicidally low). It is also worth repeating that most of the main UK vendors have already survived one market downturn following the dot.com bubble burst in 2001; today, not only do they have the experience of weathering a storm, but they are also, in most cases, financially more resilient.
  5. One way to survive a UK recession is to expand into other, more buoyant markets. Vendors with established bases in the Middle East, for example, will be able to cushion the blow of any drop in UK incomes.
  6. Recessions can also affect companies’ R&D investments. Software development is not cheap and any drop in revenues may cause some software providers to slow down their R&D activities. The result could be less frequent introduction of new features and functionality.

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

I remarked late last year on an analogy made by a user between Facebook and the BIW project extranet. The more I have thought about this, the more I have come to the view that there are opportunities for teams to expand their communications using a variety of tools – some structured and formalised, others more ad hoc and informal. Perhaps we will see some of the latter, Web 2.0-type features – blogs, wikis and folksonomies – begin to trickle into the former?

I have read about project managers using blogs as project diaries; wikis have been used within architectural practices as repositories of experience and best practice; and tagging is, of course, already used to an extent in creating meta-data relating to drawings and other documents. Microsoft’s SharePoint already offers blog and wiki tools, so any extranets created using that as a foundation will incorporate some Web 2.0 features. I look forward to further blurring of the dividing lines between formal and informal, structured and social.

Permanent link to this article: https://extranetevolution.com/2008/01/saas-and-cons-2/

Jan 28 2008

Why buy the cow?

Why Buy the Cow? is a book by Subrah Iyar, co-founder and general manager of WebEx, that sets out to explain the Software-as-a-Service (SaaS) movement and Web 2.0. The title refers to an analogy used to describe the new generation of software vendors who, in effect, sell milk instead of forcing customers to buy cows to milk themselves.

Appropriately, I was pleased to discover (here), this book about web-based collaboration and software resulted from the collaborative efforts of multiple contributors and editors using a wiki and numerous web meetings. It’s even published on-demand by lulu.com.

Permanent link to this article: https://extranetevolution.com/2008/01/why-buy-the-cow/

Jan 25 2008

IBM targets SME collaboration with SaaS Bluehouse

A few years ago, my young children would rise at unfeasibly early hours of the day and watch kids TV, including a programme called Bear in the Big Blue House. I was reminded of this when reading news of a new offering from IBM: a web-delivered service that provides extranet services to SMEs (aka SMBs) to allow them to collaborate securely. The service, codenamed “Bluehouse”, will allow small businesses to share contacts, files, project activities and interact with chat and web meetings (sadly, the logo is an orange house shape around a lower-case ‘b’ – no bear).

Bluehouse is not yet available (nor is any pricing information), but you can register for the beta product, designed for companies with up to 500 employees. Based on ‘Lotus Foundations’ (a line of pre-configured small-business servers including the Domino mail and collaboration platform, file management, directory services, firewall, back-up and recovery, and office productivity tools), it will provide extranet collaboration services for open social networking, instant messaging, file sharing, project management and web conferencing, but – as a Software-as-a-Service (SaaS) offering – won’t require customers to have in-house technical expertise.

There is clearly a desire here from IBM to experiment with SaaS and take on Microsoft and its software-plus-services strategy. It will also have an impact on Microsoft and its various partners’ SharePoint-based extranet offerings (see previous post).

Permanent link to this article: https://extranetevolution.com/2008/01/ibm-targets-sme/

Jan 23 2008

More SharePoint for AEC

Earlier this week, a Microsoft employee frankly admitted to me that SharePoint was not particularly easy to implement for extranet-type collaboration in the typical geographically distributed structure of a construction project team. As a result, Microsoft has tended to be reliant upon partners such as the Sword Group’s C2Share (see post) to expand its SharePoint footprint in this market sector (I have just found another Microsoft Gold Certified Partner that also supports AEC projects: the Netherlands-based Cadac group, which has a SharePoint product called Organice). In the meantime, I read that Microsoft is also producing a solution accelerator for extranet collaboration.

Related posts:

Permanent link to this article: https://extranetevolution.com/2008/01/more-sharepoint/

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