Oct 17 2014

Why the UK BIM toolkit is a key building block

The BIM ‘Digital toolkit’ should help UK firms, including SaaS vendors, adopt and then export BIM skills, practices, procedures and standards and apply them in other markets.

Just as sustainability saw an explosion in ‘greenwash’ – sometimes spurious claims about the ‘greenness’ of various products or services – so building information modelling has seen frequent ‘BIMwash’, with firms asserting that they are already delivering Level 2 or even Level 3 BIM. The fact that the Government’s BIM Task Group had not yet defined a full set of Level 2 components did not appear to hinder the hype. However, recent announcements will mean, from early 2015, that such BIM competence claims may more easily be substantiated.

NBS BIM toolkit

dPOW logoOn Monday 22 September, the Technology Strategy Board, now Innovate UK, announced that a team led by NBS had won a £1 million contract to take forward development of a “Digital Toolkit” for BIM, creating the last two building blocks of Level 2: the digital Plan of Works (dPOW) and a classification system for construction objects.

The award follows a two-stage competition to examine the feasibility of the project. The first stage, kicked off in February (post), attracted around 70 expressions of interest, including a strong submission from a pan-industry group of professional institutions (C8, which included the Institution of Civil Engineers*), but just three were selected to submit proposals for the second stage.

NBS – whose team includes the BIM Academy, BDP, Laing O’Rourke, Microsoft and Newcastle University – is contracted to deliver the first elements of the toolkit in early 2015, and then maintain it as a free-to-use industry resource for a minimum of five years. This commitment was too onerous for the C8 consortium, but NBS has since courted their continued involvement.

Richard WaterhouseRichard Waterhouse (right), chief executive of RIBA Enterprises, which owns NBS said, “We already have the backing of key organisations such as CIBSE, CIOB, ICE, IStructE, RIBA and RICS and we will be extending and widening this dialogue over the coming months.” The institutions will form part of a toolkit advisory board providing direction and also potentially undertake subcontracted work.

The dPOW will become an important resource to help technology vendors, particularly providers of SaaS construction collaboration platforms, provide a ‘common data environment’ to support sharing of structured data across a project. The classification development will see Uniclass 2 clarified, reworked and extended to ensure comprehensive and international coverage of all professions’ needs across all disciplines, including infrastructure projects, says Waterhouse.

NBS will ultimately be the ‘guardian’ of the BIM toolkit. It will be able to use expertise and experience gained in creating toolkit elements to offer other value-added products or services, but the ‘toolkit’ will remain freely available to UK construction (Waterhouse told me he expects it will need to be freely available for longer than five years as some sectors will lag in developing BIM expertise). NBS will be talking further about the toolkit at NBS live on 4 November in London (details here).

The resource should also help UK firms adopt and then export BIM skills, practices, procedures and standards – some, like PAS1192:2, set to become ISO standards – and apply them in other markets. This was something anticipated in Richard Saxon’s “Growth Through BIM” report for the CIC last year (see my recent post: A BIM boom for SaaS collaboration vendors?).

CapEx + OpEx = TotEx

While many UK architecture, engineering and construction businesses appear keen to exploit BIM, some have been adopting a ‘wait and see’ approach pending the completion of the Level 2 roadmap. Meanwhile, client owner/operator organisations are also beginning to realise that BIM can help improve the operation and management efficiency of their built assets across their life-cycles.

Ultimately, this is what will drive and reinforce BIM adoption. As clients start to insist on more efficient procurement, delivery and future management of their facilities (TotEx), their suppliers will be striving to innovate. Linking ‘smart’ built assets, connecting both historic and real-time data, aggregating it and integrating it with metrics from key business or organisation processes, will help owners identify what makes customers spend more, students learn more, patients recover faster, office workers be more productive, etc.

This may seem like utopian future-gazing, but it’s about owners’ business outcomes. Data will be the key connector, and the BIM toolkit is an important stepping stone towards that brave new world.

This is a version of a comment piece I wrote for Construction Manager’s recently launched BIM+ portal, published on 29 September. [* I am a deputy chair of the ICE's Information Systems Panel.]

Permanent link to this article: http://www.extranetevolution.com/2014/10/why-the-uk-bim-toolkit-is-a-key-building-block/

Oct 16 2014

Basestone 2.0 launched

Basestone’s new iOS mobile application features (it says) the market’s “most intuitive interface”, but in a busy market, integration matters as much if not more than interface design.

BasestoneAfter meeting Blue Ronin/Basestone‘s team in January 2014 (and at other events since then), I have kept an eye open for developments from the London-based startup. In early September 2014, it launched Basestone 2.0, the latest iteration of its iOS mobile-based application for viewing and collaboration on construction sites.

According to the company’s blog post, the biggest change is a complete makeover of the interface, recognising that “when you’re working on site, the last thing you want is to be fiddling around with confusing technology”. The new-look app features what Basestone claim is “the simplest and most intuitive interface of any on the market”.

Basestone interfaceInformation about a single issue is grouped together, aggregating data from multiple Basestone annotation tools and photos, allowing users to capture the progress of an issue from beginning to end, including interim snagging, and ‘before’ and ‘after’ photos. With the issues list, it’s now also easier to get an overview of all issues related to a particular drawing: who created them, how urgent they are and what their status is: simply tap on any issue to zoom into the detail.

Also new in 2.0 is the ability to create projects directly in the app, as well as via the basestone.io website back-end. Users can also import files from other applications, including Dropbox and Box, direct from an iPad. Pricing-wise: basic use of Basestone (enabling sharing of up to 50 drawings) is free; for over 50 drawings, a Professional account (up to 500 drawings) costs £19.99 per user per month, while unlimited storage comes with a £99.99 price tag.

My view

This is a busy and fertile market at the moment with a lot of development activity, sometimes across all the main mobile operating systems, sometimes just across one or two. The main BIM authoring software vendors (Autodesk, Bentley, etc) are creating mobile tools, as are the existing vendors of SaaS (eg 4Projects, Aconex, Asite, Conject) and other collaboration platforms (eg: Newforma’s SmartUse); there are also some long-established mobile developers (MCS Priority One, plus others focused on point solutions such as defects management), and then there has been a flurry of tools created by startups in the US (Plangrid, FieldLens), UK (Cadbeam, Sitedesk) and mainland Europe (GenieBelt), all seeking to make on-site collaboration including access to drawings and/or, in due course, building information models, easier.

The mobile-first developers can create applications designed from the ground-up for ease-of-use on site, focusing on what their end-users require most in terms of functionality, and optimising the connectivity and communication capabilities of the devices they work on. They can quickly attract bottom-up adoption, perhaps from site-based users frustrated at the sometimes over-complex, feature-bloated functions of rival solutions, which can try to squeeze all the capabilities of existing desktop or browser-based applications into the mobile experience. As such, I welcome the disruption of new startups like Basestone.

However, ultimately the security and reliability of the hosting environment and the ability to create and review archives of information captured during project delivery will be what matters most to main contractors and owner/operators. How well a mobile application’s data can be integrated with the rest of a project delivery technology ecosystem will guide its success or failure. As well as a shake-up, there will be a shake-out. While some new businesses may thrive, others will be acquired, or will wither and die. Just as we saw a flurry of construction collaboration businesses launched in the original dot.com boom, we are now seeing a mini mobile boom, and – as before – not all will survive.

Permanent link to this article: http://www.extranetevolution.com/2014/10/basestone-2-0-launched/

Oct 14 2014

More on Newforma’s SmartUse acquisition

Newforma-logoI met up with Newforma CEO Ian Howell in London on Friday (10 October) and asked about the recent SmartUse acquisition (see post).

From his perspective, the deal was the next stage in Newforma’s “mobile-first strategy,” building on previous deals (2012) to add mobile and cloud-based capabilities to the Newforma portfolio, while satisfying the company’s VC backers that they could deliver the required growth. Buying SmartUse was primarily about acquiring “a software technology that allowed sheet sets to be rapidly synchronised to all devices and which allowed mobile cloud collaboration across them all.” Ian was keen to stress that this was also about helping constructors and owner/operators view and collaborate on drawing-based information:

“We are an AECO business: we started with the A and the E, and we’re now complementing this and helping the C and the O.”

SmartUse TableNewforma is not about to become a hardware vendor. While SmartUse’s A0 smartboards make it easy to view drawings full-size in the construction site office, the market for the product is already becoming ‘commoditised’ – many existing offices have smartboards already, there are other products in the market, and prices are dropping. The deal was about acquiring mobile-oriented software that could help users view drawings on any smartboard, plus a range of other mobile devices, Ian said.

We talked briefly about BIM too. Newforma’s view is that the UK BIM mandate is currently mainly focused on designers (“the A and the E”), whose needs the company is currently meeting through the Project Center platform’s support for sheet set export from Autodesk’s Revit. Ian also highlighted the platform’s integration with Bentley’s Projectwise (see June 2014 news release), stressing that enabling easy access to secure in-house installations and to Newforma-hosted data had to be better than uncontrolled corporate use of consumer-oriented solutions like Dropbox or Box.net. The current SmartUse mobile application is purely about 2D collaboration, he added; it doesn’t offer BIM viewing and collaboration support “yet”.

Permanent link to this article: http://www.extranetevolution.com/2014/10/more-on-newformas-smartuse-acquisition/

Oct 13 2014

Aconex valued between $350m and $410m

Aconex logo 2014News reports from Australia (The Australian, for example) say SaaS construction collaboration software business Aconex will float as a public company on the Australian Securities Exchange in late November (see previous post) with a market capitalisation of between Au$351 million and Au$406.5m (£190m-£220m).

Joint lead managers Macquarie Capital and UBS priced the float at the weekend after analysts estimated the enterprise value at between $350m and $405m (this is towards the lower end of previous speculation). The pricing equates to $2.20 to $2.60 per share.

According to the reports, Aconex launched its roadshow in Sydney today (Monday) for an initial public offering of the business, earmarked for late November, and will raise between $122m and $135m from investors. The investor roadshow will end in Melbourne later this week and then head to New Zealand and Hong Kong.

Australian Financial Review says the size of the IPO raising will be clear once Aconex’s existing shareholders – which include co-founders Leigh Jasper and Rob Phillpot, VC firm Francisco Partners and several smaller investors – nominate how many existing shares they will sell at the float. Francisco Partners, which has a 24% stake, is expected to sell some of its shares.

A bookbuild for the business is slated for 27 October, and the prospectus will be lodged by 28 October.

My view

There is, of course, no precedent for this IPO, as no SaaS construction collaboration technology business has previously floated. We have had a number of mergers and acquisitions over the years, but none valuing a business at anything like the level of Aconex – but then Aconex is, by some distance, the only vendor achieving significant global revenues. In the year to June 2013, total revenues were Au$52.6m, c. £28.4m (see post); recent reports relating to the IPO suggest revenues are now around Au$66.2m (£35.9m), with losses down from Au$8.9m to Au$4.1m, and CEO Leigh Jasper saying the business is on track to move into profitability next financial year.

Aconex Revenues Profit/Loss 2005-2014

Talking with various competitors, UK and US-based, there is a view that Aconex invested hard to grow awareness and a strong presence in the US market, but hadn’t reached the penetration needed to do an IPO in the US, hence the Australian flotation. This may reduce pressure on Aconex’s balance sheet – it is six years since the company secured a Au$107.5m (then £48.8m) private equity investment from Franciso Partners. The business’s expansion since then has yielded one small acquisition (Grazer in 2012) and in a market that was also badly hit by the global financial crisis, Aconex has been accumulating losses since 2008 as well as weathering a few boardroom storms.

The Francisco Partners investment then valued Aconex at between Au$215m and Au$300m, then rating Aconex somewhere between five and 7.5 times revenues – not far short of the 7.6 multiple achieved by SaaS web conferencing business WebEx when it was acquired by Cisco Systems in 2007 (see my Valuing a SaaS business post). The 4Projects MBO in 2007 valued that business at around 6.7 times revenues (post). A more recent comparison might be the 2013 IPO of US-based SaaS construction payment management business, Textura (now opening in Europe), whose initial price was about 9.8 times revenues (albeit in a US investment market hungry for SaaS operators with industry-leading products).

Looking at the forecast valuation, therefore, it appears Aconex is valued at between 5.3 and 6.1 times revenues (AFR reported the IPO pricing represented “3.9 times to 4.6 times revenue on an enterprise value to revenue basis”) – on the face of it, slightly below previous deals, but, of course, we are dealing with different companies in different investment markets at different times.

Update (15 October 2014) – Are some Australian market-watchers and fund managers getting slightly twitchy about the Aconex IPO? For example, reporting on the IPO roadshow, Maggie Lu Yueyang writes that:

“Aconex is trying to persuade fund managers that it sees great global market opportunity for construction software, and its offshore expansion post IPO is not risky. …

“It is understood that Aconex sees the low penetration rates for construction collaboration software globally as an opportunity to grow its business after the IPO, estimating the global market to be worth around $5 billion.

The company is aiming to ease fund managers’ concerns around its offshore expansion plan, and will argue that it actually started offshore expansion 10 years ago and has become profitable in certain offshore markets.

The article goes on to mention various large-scale projects Aconex has worked on, including Hong Kong Airport, the Venetian Resorts in Macau, the Marina Bay Sands project in Singapore, the Panama Canal expansion (mentioned in a Conject blog article today) and the New York City Hall project.

Permanent link to this article: http://www.extranetevolution.com/2014/10/aconex-valued-between-350m-and-410m/

Oct 10 2014

4Projects reports record revenues

4Projects turnover in 2013 reached £6.351m. The SaaS vendor reported its seventh straight £1m-plus profit, and sees BIM as a key to sustained future growth.

4Projects by Viewpoint - blueNewcastle, UK-based SaaS construction collaboration technology develop 4Projects, since February 2013 a subsidiary of US ERP vendor Viewpoint, has reported record turnover for the year ending 31 December 2013. It achieved revenues of £6.351m, generating a profit of £1.6m., the

Direct comparisons with the previous year are slightly difficult as the business changed its financial year-end from 31 March to 31 December, so the latest accounts only show a comparison with the nine months from April to December 2012. However, I calculate the 2012 full-year equivalent numbers were turnover of c. £5.651m, and pre-tax profit of £1.489m (though this latter figure would have been higher but for exceptional items of £616k – “made up of employee incentive payments and professional fees relating to the acquisition by Viewpoint Inc. on 1 February 2013 and other non-recurring costs.”). On the full-year equivalent figures, the 2013 results represent a 12% growth in turnover (as indicated in September 2013‘s double-digit trading update), and profit up 7%.

UK vendor turnover

International operations

Most of 4Projects’ reported revenues – 80% – still derive from UK operations, but the overseas portion is clearly growing, up from 9% the previous year. In a conference call with MD Alun Baker, finance director Chris Baty and VP BD EMEA director Steve Spark, I learned that much of the growth was due to business in the Middle East (“we will see significant further expansion there in the next six to 12 months”), continuing growth identified by Chris in 2012 (post). Turkey and Italy were also identified as particularly strong market opportunities.

The report is also EMEA-only – it excludes revenues from selling the 4Projects solution – or Viewpoint for Collaboration as it is there known – in the Australasian and north American markets (“we are happy with the momentum achieved there”). This makes the increase in overseas revenues even more significant, and 4Projects is investing in its international channel partners programme to develop this still further (Michael Romero will be joining 4Projects from Asta to lead this expansion, I understand).

Steve told me 4Projects has also been benefiting from more customers adopting an enterprise approach to collaboration rather than thinking project-by-project. Another trend was that more asset owner/operators are starting to use the platform, in both the pre- and post-construction phases of the asset lifecycle.

4Projects 4BIM4BIM

Building information modelling is also a strong factor in uptake of the 4Projects solution, he said, particularly among asset owners. Having participated in Viewpoint’s user conference in the US last month, the team believed there was substantial American interest in the core product (“the market is now understanding the connection between collaboration and ERP,” said Alun), and in adoption of BIM-based approaches. The UK’s BIM programme is also opening doors for them; Steve told me:

“While some are interested in the big BIM picture, others just want the earlier base functionality, knowing that they can extend to the other 4Projects functionality, like BIM, when they need to.”

Alun talked of a five-year development programme at 4Projects which envisages growing numbers of organisations migrating to SaaS-based BIM solutions so that they can apply real-time collaboration approaches, integrate asset data with other business informatics (he mentioned ‘Big Data’ in this context), and provide “clear ROI measures to the whole value chain” (see my previous post: A BIM boom for SaaS collaboration vendors?).

My view

From the published results of all the leading UK-based SaaS collaboration vendors, it appears the corner has well and truly been turned, though some took longer to return to growth than others. If industry predictions about construction market growth are correct, we should see these upward trends maintained for the next few years, but the angle of travel may vary according to the relative strengths of the different solutions in a changing technology market.

As I suggested in my ‘BIM boom’ post, adoption of BIM is likely to prove only a gradual boost to the fortunes of leading vendors, but is also likely to change the complexion of the vendors’ customer base. As 4Projects are finding, asset owner/operators are likely to be more motivated to look at whole-life information management, and rather than leaving system selection up to their Tier 1 contractors, may mandate a selected system so that all their asset information is collated in one platform. This can then be integrated with other business systems to provide greater visibility of the impact of asset operations on business performance.

Permanent link to this article: http://www.extranetevolution.com/2014/10/4projects-reports-record-revenues/

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