Owners Will Drive Standardization of Online Collaboration Tools, But Not Yet

October 26, 2000

By Judy Schriener

Now that Cephren and Bidcom have announced their merger into Citadon, they would like the construction industry to think that other online collaboration service providers might as well go home. Well, not yet. Standardization ultimately will come from owners' mandates, but, like the Dow Jones hitting 11,000 again, don't watch for it any time soon. Adoption of any online collaboration tool is the name of the game for now.

The Citadons, Constructwares, Buzzsaws, e-Builders and Bricsnets of the world are trying to extricate themselves from the hype wars (though e-Builder and Bricsnet largely watched in horror and chose not to participate) and concentrate on bringing in revenues. That means they have to impress the construction industry. Members of the construction industry don't care about glowing articles in the Industry Standard, Red Herring, Business 2.0, or Upside. They care whether the service has the functionality they need, whether it can save them time and money, whether it's reliable and whether the vendor can adequately train their people and support their service. This is the ultimate tough crowd.

Today's big questions are two:

Does the Cephren-Bidcom merger into Citadon mean it will be the standard of the industry?

What are the other major collaboration service vendors doing?

Does the Cephren-Bidcom merger into Citadon mean it will be the standard of the industry?

Citadon Chairman Rob Majteles and CEO Doug Sabella would love for it to be "Game Over!" for all collaboration solutions except theirs. Nice try. The Mets are hoping for that too. As yet there is no industry standard, and the fact that Bechtel, Fluor, Pantellos (a business-to-business marketplace for a consortium of utility and energy companies) and several other seemingly large users of online collaboration have endorsed either the Cephren or Bidcom service doesn't mean that all others are null and void or will be any time soon.

Bechtel is very decentralized and uses several extranet services company-wide, despite being an investor in Cephren for the last two years. The company wisely did not mandate any one particular service. Fluor is just beginning the process of standardization. Even though they are the two largest contractors on ENR's Top 400 list, together they don't comprise 1% of the construction value of projects in the U.S. Pantellos as a unit may endorse a unified extranet solution, but the individual companies that comprise it are free to use any service they want. One of the Pantellos utilities, Duke Power, signed on at Cephren-now-Citadon for about 100 projects, so that's a start. Just like construction services, extranet services (synonym for online collaboration services) still are primarily sold locally and regionally. People do business with people they like, especially if they are not experts in the field, and most design and construction people would not consider themselves experts in online collaboration, so they will rely on people they know and trust for guidance.

Citadon is going after owners that have hundreds and thousands of projects worldwide. GE Power Systems already is using Cephren's-now-Citadon's ProjectNet on 450 projects, which is significant. Marriott is scheduled to use the service for 1,400 projects over the next five years. Citadon is hoping for a trickle-down effect. Majteles is looking for thousands more projects to come through for Citadon from the individual Marriott hotels and the individual companies in various consortia that sign up for the ProjectNet service.

The benefit to the industry from the merger of Cephren and Bidcom will be to speed adoption in the industry of the online collaboration services. With owners, consortia of companies and major engineering and construction companies pushing their constituents to use these services, adoption of these industry-changing tools that have been around for the past few years can finally begin in earnest.

What are the other major collaboration service vendors doing?

Constructware, Buzzsaw, e-Builder and Bricsnet are not languishing. Constructware claims to be serving 30% of ENR's Top 100 contractors, 17% of the ENR Top 400. Constructware has more than 250 paying customers, or about 14,000 individual users. Sales are growing at a rate of 15% each month, according to CEO Scott Unger.

Buzzsaw.com just hit the milestone of 20,000 projects. People make fun of the fact that Buzzsaw's system is simple and free (for formerly up to 100MB of space used, but now for 25MB), but Buzzsaw CEO Carl Bass asks, "So what's the problem with that?" He is taking a bottom-up approach to the adoption challenge. "Others are focusing on big clients, but that is not Buzzsaw's strategy. Big clients need lots of customization, and it's basically an outsourcing of their IT department, kind of SAP for the construction industry."

e-Builder is forging deals with several large owners, which e-Builder sales director Neil Ferree says it will announce in the near future.

Bricsnet has just announced that the STAR Team, made up of DPR Construction, Callison Architecture, KPFF Consulting Engineers, Mazzetti & Associates, Kinetics, ACCO (Air Conditioning Co. Inc.) and Oregon Electric Group will standardize on Bricsnet's collaborative ProjectCenter platform.

Bass sums up the standardization situation when he says, "The industry is wide open-90% of them have no idea who any of us are."