• New maps "mash-ups" - using either a Google Maps portlet or a Microsoft Virtual Earth / Bing Maps portlet. The Virtual Earth portlet supports 3D visualisation, meaning users can render their 3D models and make them accessible within Virtual Earth - a useful area for collaboration to support building information modelling too (and potentially useful to teams competing in next month's BuildLondonLive).
• NEC Manager - Extensions to the Asite NEC Manager mean it now fully supports NEC variants: ECC, PSC, TSC, and ECSC for NEC3, various NEC2 versions, and the Procure21 NEC2 and NEC3 flavours. A graphical dashboard report "shows contract status across project portfolios containing many concurrent NEC contracts with a simple red/amber/green visual approach". The NEC contract administration field has become quite competitive in recent times. At one point, MPS seemed to have the space to itself, but collaboration firms such as [my former employer] BIW Technologies were soon integrating their document and process collaboration platforms to support NEC workflows.
• Asite Navigator - as part of Asite's investment in web 2.0, its Asite Community functionality, launched in the Summer 09 release in June 2009 (post) is now accessible via Asite Navigator, giving users access to the Asite forums, blog, Twitter feed, and Asite on LinkedIn directly from their desktop. Maybe this will increase the volume of user interactions - which, when I checked last week, didn't appear to have maintained the levels achieved in the first 100 days.

What attracted me to this news story was that 10-strong Leighton Group subsidiary WorkCast is headed by Gerard Callaghan, ex-sales director at construction collaboration technology provider and former Leighton company 4Projects (though I don't think he ever "headed up" the firm, as the report suggests).

I wonder if this overlap in personnel might see 4Projects incorporating WorkCast's conferencing application into its collaboration platform?

At the time of its 2007 figures (published very promptly in April 2008 - post), directors of the Unit 4 Agresso NV subsidiary were optimistic about being able to "deliver sustainable growth in line with its strategy", but the global financial crisis and the associated construction downturn had then yet to appear on the horizon.

Nonetheless, turnover for 2008 was up 10.6% to £3.11m (from £2.81m in 2007), while the pre-tax profit was £221,367 (up from £162,557 in 2007). Average staff numbers increased from 30 to 34. Of the turnover, all but £20,460 (attributed to Europe) related to operations in the UK and Ireland.

However, the market downturn that hit during the latter part of this reporting period and which has continued during 2009 has prompted a pessimistic note on the future outlook from Business Collaborator's directors:

"The decline in the general economic climate has affected customers of the Company, particularly those in the building industry. The directors recognise that the Company is unlikely to deliver sustainable growth in the coming year but believe that the business outlook has stabilised and by focusing on customer care they are confident that current levels of activity can be maintained."

Analysis

The directors' cautious note perhaps reflects the halving of revenue growth from the rates seen in previous years: 19.6% in 2007, 22% in 2006, and suggests there may well be a decline in revenues for 2009. It sounds as though Business Collaborator - like Asite (post), Storedata (post) and Sword CTSpace (post) - has yet to report the full impact of the UK construction recession (it also makes 4Projects' March 2009 figures, the latest we have for a UK-based vendor, something of a trend-bucker - post).

Moreover, Business Collaborator does not have the 'safety net' of an Aconex-style wide network of international, and to some extent transferable, operations to avoid the risk of exposure to a single market (see yesterday's post) - its fortunes are very much tied to the buoyancy of the UK building industry.

None of the leading vendors that I monitor is obliged to publish results anytime soon (Business Collaborator's 2008 report was signed off very close to the 10-month deadline), but as they emerge during 2010, I suspect we will see a few downward ticks for 2009 in the revenue and profitability graphs.

However, Aconex's financial report is also made a little more difficult to interpret due to a change in revenue recognition policy, and to the restructuring of the group's balance sheet after the capital raising exercise completed in September 2008 (see Aconex gets private equity injection). To make sense of the changes, in addition to a copy of Aconex's statutory accounts, I received a summary document based on an extract from the firm's shareholder report put together by Aconex CFO Matthew Walsh, and then had a telephone conference call with Matthew, operations director Paul Perrett and marketing chief Frank Carron (the tele-conference was to have included Aconex co-founder and product director Rob Phillpot but that product-focused conversation will now take place shortly).

Revenues up (restated)

The consolidated Aconex group generated revenues of AUD$38.923m (or £17.985m at average exchange rates) in the year to 30 June 2009, up - at first glance - a healthy 34% up from a restated figure of AUD$29.033m (or £13.413m) in 2008. However, the figures have been restated due a change in revenue recognition policies implemented because the directors felt:

"... recognition of revenue more evenly over the life of each individual contract will provide more relevant information, and result in a more accurate indication of the financial performance of the group...." (p.25)

In short, Aconex's old accounting policy effectively over-stated revenues during the early stages of projects, whereas some other SaaS collaboration software companies, such as [my former employer] BIW Technologies, have tended to apply a more conservative, straight-line policy, only recognising revenues as they were received. (For me, it's a welcome policy change, as it makes for easier comparisons between the different SaaS vendors - though not all will be conservative as Aconex or BIW.)

There is a time-lag between when customers are invoiced and when revenues are received; Aconex says it invoices a significant number of customers upfront, and as a result its invoicing for the year (AUD$48.9m) is significantly higher than revenues.

Aconex revenues for 2008 were originally stated as AUD$41.59m, and if Aconex had stuck with the previous accounting policy the 2009 revenues would have been given as AUD$41.652m, suggesting growth of just under 1.5% (the relevant note to the accounts doesn't roll-back the impact of the policy change to years beyond 2008). However, Matthew explained the revenues were also affected by project cancellations (see Order book, below), meaning that the 2009 revenue figure had to be adjusted downwards - making the 1.5% a little pessimistic. He continued:

"In terms of comparison between results of different vendors, we believe operating cash flow and invoicing are the key metrics which illustrate success in developing / growing businesses in this space."

Losses

According to the statutory accounts, the consolidated group made a loss (EBITDA) of AUD$6.48m (or £2.99m), an apparent improvement on the restated AUD$12.379m (£5.72m) figure given for 2008.

Order book

A major virtue of SaaS businesses has been that the subscription model makes future revenues from existing contracts very predictable. With clients being billed on, say, a monthly or quarterly basis for projects with a duration of perhaps three or four years, it was easy to forecast what the company would earn even if it didn't win any more projects. However, project postponements and cancellations can damage that predictability, as Aconex has found. It says:

"Historically, the number of projects that finish prematurely is low, however over the last year a large number of projects were cancelled, which reduced the order book by $12.1 million. Most of these cancellations occurred in the United Arab Emirates and are related to sales in the previous financial years. As of 30 June 2009, the order book stood at $49.3 million (2008: $62.0 million). Approximately 75% of this will be billed over the next 3 years." (p.4)

I had been wondering what impact the Dubai downturn would have on one of the collaboration vendors most active in the UAE and that reduction in future order book to AUD$49.3m (£22.78m) - roughly a fifth - shows that such IT businesses have been scarred in the same way as contractors and project managers working in the region.

Paul and Matthew said that after a strong first quarter, the market downturn began to take hold in late 2008: "In Q2 we saw some weakening and quarters 3 and 4 were poor, though we did start to see some improvements in June this year." Indeed, the shareholders note says: "June was one of the strongest bookings results in the history of the business".

Employees

I was told that Aconex staff numbers peaked at around 370 in October 2008, but the business then shed some staff, particularly in Dubai, while others were relocated to other locations. By the year end, the business employed around 330 staff, but has since started to grow back towards its late 2008 levels. The company's Middle East operation (it's largest after Australia/New Zealand, which was apparently "the clear standout financially with outstanding results across all key financial metrics") had seen project wins in Qatar, Oman and Abu Dhabi, helping compensate for the cancellations experienced in Dubai.

Financing

The Aconex report also covers the period during which a deal for new investment in the business from US-based technology investor Francisco Partners was concluded (see Aconex gets private equity injection). As mentioned in last year's report, AUD$25m of the initial AUD$57.5m tranche was used to complete a buy-back of existing shares, and the company's balance sheet at 30 June 2009 showed cash and cash equivalent assets of AUD$25.9m as against just AUD$1.48m a year earlier. Under Australian accounting standards, the investment has to be accounted for like a debt instrument, resulting in some notional figures appearing in the P&L covering interest expenses and a liability appearing in the balance sheet.

Regional operations

Again, apart from the direct references to the United Arab Emirates, there is precious little detail in the accounts about the performance of different geographical Aconex segments. I guess we will have to wait for publication of the next annual results from Aconex (UK) Ltd to gauge what impact the downturn has had on its British-based operations (2008 results covered here); and these numbers will also be restated in line with the group's revised revenue recognition policy.

I asked Paul about Aconex's international strategy and he said they had been building a wide footprint in Asia, particularly in places like Hong Kong, China, India and Singapore: "Hong Kong is our head office and currently biggest largest office in the region. These are key markets and we are working very hard to grow business in them - growth has been slow and steady."

Southern Europe and north Africa, notably Libya, were also reasonably buoyant, and the company's push into North America has given Aconex some traction in that market too; the shareholders note cautioned that these markets were "volatile due to their relative infancy".

Analysis

I have been downbeat about the impact of the recession on the financial performances of the various UK-based collaboration technology vendors (see Gloomy times for SaaS collaboration vendors), and this mood was, to some extent, justified by the the June trading update released by Asite (post) and figures given for industry minnow Storedata (post). 4Projects most recent results (see Good numbers from 4Projects) and the apparent turnaround in Sword CTSpace (see post) appeared to buck the trend, but I wonder if they were boosted by a good first half of the year before the recession really began to bite 12 months ago. My conversation with Matthew and Paul seems to suggest this might be the case.

When I wrote about the Storedata results in August, I had just met Paul and he admitted that the company had taken a hit in the Middle East, releasing some staff in Dubai, so I wasn't really expecting a repeat of previous years' stellar growth figures. But whether you take the given figures or look at the restated numbers, at least Aconex has continued to grow, whereas some rival vendors have actually seen revenues shrink. As Paul suggested to me, having operations in a spread of regions - some of which are less affected by the recession - has proved to be prudent strategy for Aconex, enabling it to weather the storm better than rivals focused on just one or a handful of countries.

While surfing around the collaboration technology providers' websites, I also noticed that another one of the smaller players, e-box (who'd almost disappeared off my radar - I last wrote about them 18 months ago) had overhauled its website too, though it says very little about the application or company.

Rob Phillpot, Aconex co-founder and Product Director, said:

“Life is much easier when the tools we use can talk to one another. Opening up our system so that it can connect with other products is a significant step for our business as we increasingly become the hub for connecting people and information on construction projects. Our clients will benefit by leveraging the industry-leading Aconex platform to manage project information across multiple applications.”

The Aconex release explains the need to help clients avoid double-handling data, by seamlessly connecting the Aconex SaaS platform with their other applications (eg: internal document management systems).

Aconex is not the first collaboration provider to offer APIs. Back in June, for example, I talked about another Australia-based vendor, Incite, offering an API allowing customers and developers to build their own applications, integrate enterprise systems and access project data within its Keystone system, and UK-based vendor Asite also announced its own AppBuilder (post). I expect other vendors to be following suit in due course.

Update (09 November 2009): I forgot to include Business Collaborator among the vendors already with an API. According to its website: "Applications that have already been developed and integrated include programme management, cost and tender management, communities of practice, and a news ticker."

Another vendor going mobile

Phillpot says Aconex is already developing an application for the Apple iPhone "which will enable Aconex users, whether online or offline, to manage documents, mails and tasks".

Putting construction collaboration applications on mobile devices has been a recurring theme this year, of course. I have written before about Woobius, which has an iPhone application for its core file-sharing platform, and an innovative - and award-winning - prototype tool for real-time mobile collaboration: Woobius Eye. Incite's Keystone already has a mobile application, and an iPhone application is promised for its new Toolbox platform (post). And the results of an Asite online survey of its user community indicated strong demand for a mobile Asite application (post). Again, these are important developments that I'm sure other collaboration providers will also be looking to emulate for their own platforms.

Update (09 November 2009): I was contacted by Chris Brandt of Munich, Germany-based vendor conject AG who told me: "We feel, that we are the first in the market to already offer an iPhone App for construction collaboration - http://www.conject.com/en/project-management/iphone-app.html." However, this appears to have been released last month, October 2009, sometime after I saw both the Woobius and Incite Keystone apps.

(I spoke with three Aconex executives in a conference call earlier this week and am hoping also to speak to Rob Phillpot about Aconex's product strategy for another post shortly).

It is an intriguing concept, but currently only sketchily described (and with no website screenshots to give some idea of what the service looks like). Basically, Howzee is an internet-based platform designed to support communication between parties involved in residential lettings. It is intended to enable faster, more efficient communication between property managers, property owners, tenants and other stakeholders. In use:

... each flat in a property will get their own web service that is open 24 hours daily. Through that channel property managers, tenants, landlords and other stakeholders are able to take care of daily matters and access to the vital data concerning about the flat.

Apparently, over 70 property management companies are using the Howzee service daily (no customer names are provided, though I understand the business is active in both Finland and the UK).

Echoes of other conversations

The Howzee concept is something that some of the leading UK construction collaboration technology providers have previously considered; I have also seen a Web 2.0 tenant communication platform marketed by a UK company, ResidentsHQ, whose Asesh Sarkar presented at Be2camp 2008 (which I co-organised); and I recently read a ReadWriteEnterprise article on a very similar US-based business, BuildingBulletins.

While at BIW Technologies, for example, I heard clients ask if its project management platform could provide information down to individual units - for example, individual houses or apartments in a residential development, or individual stores in a shopping centre. The requirement was basically to provide a "micro-project" view of each plot or floorspace that could then be used to share information with the owner/tenant and any contractors or other service-providers involved in fitting-out, providing utilities, refurbishing, etc. It was envisaged that each micro-project could be populated with design and construction data from the parent project and then modified according to how each house/apartment/retail space was fitted-out and serviced by its owner/tenant.

Technologically, I think it was relatively straightforward; the main issues were (a) getting buy-in from the development master-planners and/or architects to sub-divide their information down for micro-project use (issues of intellectual property) and (b) selling the concept to each owner or tenant and their respective supply chains - some of whom, particularly when it comes to shop-fitting, might be using other collaboration systems. Potentially, the approach could also be applied by local authorities, housing associations or private landlords to create detailed records of the facilities provided and to then manage the history of repairs and maintenance, etc.

Though with slightly different approaches, ResidentsHQ and BuildingBulletins both offer social networking targeted at the 'hyper-local' level - an individual building or group of related buildings - allowing residents to exchange views with their neighbours online on anything from local restaurant recommendations to arranging squash partners, and/or to interact with the development's management (perhaps a residents association, or - as with Howzee - the owner/facilities manager).

While the latter two products (and Howzee) are not appropriate for managing the design and construction of a development, it is conceivable that construction specialists like BIW could work with hyper-local community platforms, populating their systems with as-built information that could then be progressively updated by the likes of Howzee, thus ensuring that the owner/tenant always has an accurate and up-to-date record of their property's fabric. I can see advantages already in using an online system to manage condition surveys (including photos), inventories, contracts, service level agreements, etc. This might also be extended to cover environmental sensor data - a la Pachube - so that owners/tenants can monitor the energy efficiency of the building's design. Moreover, in the UK at least, think how much easier it will be, if you have all the data in one place, to compile a Home Information Pack (HIP) when it comes to selling one's property.

(This is a slightly amended version of a post from my pwcom2.0 blog.)

This morning I discovered a SCRI Research Report, Future Generation of IT (PDF), published in June and reporting on discussions held at a 'vision planning workshop' hosted at Salford University back in January (2009). The aim of the event was to "identify possible futures that the construction industry might face and to start developing a construction IT vision for the year 2030".

I have attended a number of SCRI events over the year, and have always enjoyed the exchange of ideas between academia and industry participants (though this event looks like it was heavily dominated by the former). At first glance, I felt the 28-page report had overlooked the potential impact of 'social media' (neither that term, nor 'Web 2.0', feature anywhere in the document), but reading the document, I think the tools and techniques we currently associate with social media are implicit in a lot of the discussion and recommendations. The term 'collaboration' is also used extensively. For example, the executive summary talks about more flexible and holistic approaches:

People will have more time to do creative work and the new technologies such as ubiquitous computing, collaboration tools, [and] decision making tools will enable a more flexible working style. Integrated, flexible and adaptable IT which was implemented with a holistic view was also another vision for 2030. (p.2)

The teams involved in the design can be globally dispersed. Free access to information will start to emanate from society and from the industry. Collaborative workspaces will enable sharing knowledge between people with the knowledge throughout the world. (p.18 - my emphasis)

... Home working, remote working, mobile working will be much more possible and feasible. ... Technologies like second life might provide the means for the interaction of the whole supply chain and design teams. ... In future, IT will naturally become a part of the life of end-users. IT tools will become much more ubiquitous, pervasive and intuitive. ... (p.20 - my emphasis)

Other future-gazing

The SCRI report represents the distilled views of just 28 individuals and yet provides a surprisingly wide-ranging forecast of the future of construction ICT. For me, it makes additionally interesting reading as the SCRI workshop was conducted almost entirely separately to a similar exercise undertaken for the National Platform for the Built Environment.

I was part of a working group that produced a scoping study on ICT and Automation (PDF) in late 2007. Following the completion of two other parallel reports, the National Platform published a revised Strategic Research Agenda (PDF) in July 2009, but in the meantime, members of the working groups had been engaged in a further workshop session in London in March 2009 - leading to several potential projects being identified for further research - many of which (thankfully) parallel recommendations made by the SCRI study - including a whole batch devoted to building information modelling (BIM) and others about 'cloud computing'.

According to the news release, Meridian is encouraging people to join the site. I've applied and got a message saying my "account is pending approval" - thought I'm not sure if I'll get much further as I'm not a Meridian user. It says the forum is "a key component of the Meridian SupportLink Website... available to Meridian customers with active support and maintenance agreements".

[Update (2 November 2009): Received email today saying: "we can only approve accounts for customers that have purchased Meridian products. As of current, I do not see any under your name. If I am mistaken, please provide me with your Meridian serial number so I can verify your purchase."]

Contrast this closed approach with the more Web 2.0-savvy open approach adopted by UK collaboration vendor Asite who launched their online community in June (see also my pwcom 2.0 post, Asite community: the first 100 days). I was able to login without approval and was soon getting direct feedback from Asite staff (even though I am not an Asite customer).