Autodesk recently announced it was going to buy PlanGrid. Being perfectly candid, I am upset I did not write this post sooner because it would have made me look significantly more insightful. Regardless, I think the Construction Management Software (CMS) space has incredible potential.
CMS’ main purpose is to reduce friction among construction players. There is no need for me to lay out the ecosystem for you, but there is a lot of coordination among an absurd number of contractors, subcontractors, project leaders, engineers, and more.
To convince you of the need for the industry, roughly 5% of the value of an entire construction project is rework. And that only includes direct costs. As you can also imagine, there are a number of indirect costs like time and missed projects. 5% alone may not sound like much but think of the projects that cost tens or hundreds of millions. Furthermore, plans are getting increasingly complex and it becomes harder to manage all the information, make sure everyone is on the same page, edits were circulated, etc.
CMS basically makes a set of cloud tools for sharing, collaborating, marking up, and creating files. The theme of recent years has been easy, centralized access. iPads have become a part of the BYOD (bring your own device) model so that workers can access the information out in the field. And a company like PlanGrid makes everything available. It is a central hub for everything.
I think this is so exciting because it acts as a consolidator. For example, there are a lot of one-off products in the construction space like 360-degree photo capture. While the technology is great, it is unrealistic for an a contractor to manage 20 apps. However, BlueBeam can easily integrate all of these companies and create significant value by attaching them to plans, sharing 3D files and so on.
This means that a lot of these one-off companies have a great M&A market and these CMS, general platforms have signficant growth opportunities just by integrating tech that already exists. Just as a proof of thought, this has already happened; Plangrid and Bluebeam are two of the most successful of these platforms and they have achieved this by being quick to integrate technologies - OCR, file conversion, Excel export. These techniques are older even. This proves another strength of the industry in that the winning game plan is simply applying what we know to the context of construction.
Lastly, construction robotics are starting to become a big deal. There are brick laying robots, robots that crawl projects and assess completion, and more. This budding industry can also integrate so well, just like these one-off products.
This became a longer post and may turn into more as I am very excited about the potential here. TLDR: Construction tech is cool, high growth, and highly necessary.