Guest Editorial
Are You Feeling Smarter?
By A. B. Cleveland Jr.
Let me admit right up front that early last year I was feeling pretty stupid. It seemed that no idea was too bad to be funded as long as it had to do with the Internet. Millions and millions of dollars were invested in ventures where the only objective was attracting "eyeballs" and spending money to build the brand name. Revenue, profits, managing costs and many other fundamentals of the "old economy" no longer mattered this was the new economy. In spite of nearly 30 years in the AEC industry most of that time involved with developing and implementing information technology I just didn't get it. How could these businesses succeed? Why were companies with little revenue and losses forecast as far as the eye could see being valued by the market at higher levels than some of the largest and most successful companies in the world? Man, I thought I was over the hill and I hadn't even seen the hill coming.
Well, like many of you, I guess I'm feeling a lot smarter now. The inflated values of many of the Internet companies have fallen hard. It turns out that "old economy" business fundamentals still apply. The ideas of quality, efficiency, profitability, and so on still matter. I guess many of us don't feel too guilty in having a chuckle at the expense of some of those who were highflying instant billionaires who have come back to earth. But before we get smug with our own self-satisfaction, we'd better recognize that the world has changed. You don't hear too many people confidently proclaiming that "the Net changes everything" as we did just a short time ago but the fact remains the Net did change everything. Yes, the rules of the old economy still apply. In spite of the fact that you can no longer turn a half-baked grad school project into an instant billion-dollar company overnight, the Net has changed everything.
So what are the implications for the AEC industry? Well, it's perhaps useful to first take an inventory of the limits that have been removed in just the past several years and what we can say about them. Computing cycles are free, memory and storage are free, bandwidth is unlimited, and connectivity is global. Now, of course, these statements aren't strictly true but it's important to understand that, if we expect to fully reap the benefits of the information technology revolution of recent years, we need to think and act as if they are true. If the cost of putting computing power in the hands of your employees or the cost of connecting them to the Internet remains a significant part of your calculations then one thing is for sure you're going to be left behind.
Next, we need to recognize that the next "killer application" in our industry is not going to be about "features and functions" as we've traditionally thought about them, as features and functions to improve individual productivity. The next killer applications in our industry will be those whose purpose is to deliver and use information. They will take full advantage of, in fact depend on, cheap local computing power, high bandwidth, and global connectivity. In a world such as this the licensing, distribution, and management of software on a "per seat" basis no longer makes sense. Software subscriptions, software as a service, project based licensing, and constant upgrades are all concepts that we need to understand better. Whether you're a contracting firm, an owner, or a software supplier, those that understand the relevance and benefits of these concepts will be the early winners. Those that understand it's process productivity as opposed to individual productivity, time to market, smart devices, and responsiveness to change that are the keys to future success will be the long-term winners.
My message here is pretty simple. While we may feel justified in gloating just a bit about the hard times that have befallen those upstarts who thought they'd left most of us among the ruins of the old economy, we'd better not ignore the fact that the landscape has changed. The tools we need to change the way our businesses operate, indeed how our industry operates, are at hand. It's sure a lot more complicated than many assumed last year. We still need to create and maintain businesses that make sense. It won't be easy. But that's okay. The hallmark of the AEC industry is not that we do easy things, but that we do the hard things every day.
About the author: A. B. "Buddy" Cleveland, Jr. is a Senior Vice President of Bentley Systems, Inc., and a Director of CSRF.
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© Copyright 2007, The Construction Sciences Research Foundation, Inc. Updated January 12, 2007.
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