This article was written by Daphne Tomlinson, Independent Senior Research Associate at Memoori.
The announcement last week that MCS Solutions is being acquired by Nemetschek Group is an indication of the trend for software providers from the Architecture, Engineering and Construction (AEC) sector to move beyond design and construction towards operational management in the lifecycle of the building.
MCS Solutions offers an integrated and modular Integrated Workplace Management System (IWMS) that covers core functional areas in real estate, facility and workplace management for large private and public organizations. Additionally, MCS Solutions has developed a smart building platform based on Cobundu IoT sensors and big data analytics to optimize productivity and efficiency in both occupant experience and facility service delivery.
MCS Solutions employs over 200 people. In addition to its headquarters in Antwerp, the company has 7 regional offices in Europe, USA, Middle East and APAC. MCS Solutions anticipates revenues amounting to around €15 million for the year 2018. The purchase price represents a revenue multiple of between 3-3.5x.
By acquiring MCS Solutions, the Nemetschek Group will enter the building operations management market. At the same time, Nemetschek will address a new customer group in the Manage segment and considerably extend its target markets beyond Design and Construction, where Nemetschek already has a leading market position.
“MCS Solutions is a perfect match for our solution portfolio that opens up a new market segment in which we will build to a leading market position as we have in BIM (Building Information Modelling) for Design and Construction. With the integration of MCS Solutions, we drive digitalization through the entire building process and are going to realize a seamless exchange of information before and, continuously, during the usage of a building,” says Patrik Heider, Spokesman and CFOO of the Nemetschek Group. “With the strong and global market position of MCS Solutions, we are taking on the role of being an innovator for the entire lifecycle of buildings.”
The Nemetschek Group, the No 1 AEC software provider in Europe and one of the top three global AEC software vendors, is driving the digitalization of the building industry, through its portfolio of independent brands, including Allplan, Bluebeam, dRofus, GraphiSoft, Nevaris, Vectorworks and Solibri focused on BIM. Publicly listed since 1999 and quoted on the TecDAX, the company generated revenues of €395.6 million and an EBITDA of €108 million in 2017.
Previous acquisitions in the building operations management field include Crem Solutions, a leading German provider of software solutions for commercial and technical real estate management whose core product is iX-Haus.
Other leading AEC technology vendors, AutoDesk and Bentley Systems have been mainly focused on consolidating their construction software portfolios, but software providers, such as Trimble and Addnode have been active in extending their portfolios to the building operations and maintenance management sector.
- Service Works Group (SWG), an international provider of facilities, property and workplace management software, was acquired in July 2017 by Addnode Group, a leading European supplier of software and services for design, construction and product data information to over 600,000 engineers and administrators.
- Manhattan Software was acquired by Trimble Buildings Group in 2014. The acquisition united Manhattan's IWMS and CAFM solutions with Trimble's portfolio of construction management, analytics and visualization tools.
BIM, an important element in digitalization of buildings has been on the radar for over 10 years, but has not been adopted widely in the operations phase of the building lifecycle. Technology is not the main hurdle to adoption; rather, it is obtaining buy-in from owners, consultants, and software developers. If it is to deliver on its maximum potential, its use must be driven throughout the building life cycle and buildings need to be designed with long-term maintenance in mind from the beginning.
Back in 2015, Memoori predicted that BIM would become mainstream for smart buildings. It is taking longer than anticipated, but with partnerships between all participants in the building lifecycle and the leading AEC technology vendors addressing building operations management, it may finally come to fruition.
BIM technology should be seen as a ‘collaboration’ between the architecture, engineering and construction sector and software industries and enable an environment in which there are opportunities and synergies for both.