It seems every year right as we are in the throes of the painstaking Constructech 50 research companies on the list decide to make big moves in the space. This year is no different.
Just last week two very big announcements hit the wires. The first is the news from Viewpoint Construction Software’s office. The company announced after more than 41 years in the technology business, Viewpoint’s owner, CEO, and Chairman of the Board, Jay Haladay, has announced his retirement. Even though he will still serve on the board, his everyday presence will be missed.
However, the second announcement—while not a complete surprise—does pack a big punch, and will change the landscape of technology in the residential construction market. I am referring to MiTek’s acquisition of BuilderMT.
For those of you who are not familiar with MiTek, a Berkshire Hathaway company, the tech giant is a diversified, global business supplying a range of engineered products, software, and equipment to the construction and industrial market. However, Warren Buffett’s company has been investing quite a bit specifically into the residential software market.
Roughly five years ago, Buffett sent a message to the homebuilding industry, addressing the value of adopting the principles and practices associated with things like BIM (building information modeling).
In that letter, he says, “The homebuilding industry provides more than housing for Americans. It is fuel for our economy as well as for the American dream.” This is a key reason why he continues to invest in companies in the homebuilding industry.
In fact, the chairman and CEO of Berkshire Hathaway went a step further that year, investing in software company Simpad/Blackpoint Services. What followed in 2013 was the acquisition of Kova Solutions, and last week the acquisition of BuilderMT.
Today, Blackpoint and Kova are integrated, providing the foundation for MiTek’s SAPPHIRE Build—a single platform for sales and marketing, purchasing, production, land management, and customer service. Certainly, the acquisition of BuilderMT points to continued investment in SAPPHIRE Build in the future and the company’s vision for piecing together an end-to-end software platform for production builders.
However, it goes a lot deeper than integrating those products (remember Buffett recognizes the value of BIM). See, in addition to SAPPHIRE Build, MiTek also provides a whole suite of SAPPHIRE products for the supply chain, which is designed to manage operations, while also sharing files to help design, estimate, and build accurately from a single, 3D model.
MiTek’s vision is a great one—something that parallels Trimble’s ideas for BIM on the commercial side of the market. However, candidly, a vision is just a vision, and only provides true value to an industry when follow-through on that idea occurs.
The challenge is BIM in residential construction has remained relatively stagnant, as the market has dipped. Now, as home sales pick back up, there is an opportunity for builders to really embrace what is being brought to market and leverage BIM. The question remains: Will that actually happen? With a man like Buffett behind the charge, the answer will hopefully be yes.
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