Given the rate at which construction software providers are consolidating, could the market be positioning itself for a comeback led by the use of technology?
The market is really moving fast. Now we will bet most of you never thought you would ever read or hear those words referred to the construction industry. But after years of such slow progression, we are now in the midst of an amazing surge of M&A (merger and acquisition) activity unlike anything we have ever witnessed before. Record mergers are nothing new for many other vertical markets. However, the construction technology space is just now starting to catch up, and 2012 is quickly proving to be the biggest year in M&As since the dot.com bubble burst in early 2000s. It was obvious the dot.com boom and bust was a cause and effect of too much too fast.While a lot of this happened because of corporate greed, much was based on too much enthusiasm and a lack of a real understanding for true market potential.
Today stakeholders are keeping an even closer eye on their investments, while still demanding significant ROI (return-on-investment). As a result, many construction technology firms are finding that organic growth has been too slow to meet their stakeholders’ demands. Therefore, this has led to an increase in M&As as acquirers are attempting to stimulate organic growth in the businesses they buy and the technologies they are attempting to incorporate. In particular, we have seen much activity with estimating software being scooped up by providers looking to incorporate the solutions in bigger sets focused around BIM (building information modeling).
In the months ahead it will be interesting to see the M&As shake out and how well all these companies incorporate solutions into their technological mix. Some will succeed, others will fail. But if there is one thing for sure it will certainly get exciting.