Tailwinds for Web-Based Construction Management Systems

Recently, we’ve noticed a big change in construction firms’ views on the web-based, or Software as a Service (SaaS), model of using project management software. Among AEC companies evaluating new construction management systems, we’ve observed:

• ~40% are asking specifically for a web-based system;
• ~50% understand the web-based model and considering it; while,
• ~10% remain committed to managing software “on premise.”

These statistics are very different from what we saw a few years ago from buyers of construction software. Why is that?
The simple answer is that SaaS has gone mainstream. It’s not a nascent technology concept any more. People get it, and they use it – to bank, to shop, to email…In addition to the familiarity users have gained through using web-based applications in other areas of their life, we see three macro drivers that are making SaaS work.

1. The rising tide of technology lifts all boats
Microsoft, Google, Adobe and other major technology players are all competing aggressively to develop the technology behind rich Internet applications (RIAs). The technology advances made by these big players represents a rising tide for all boats; that is, smaller SaaS vendors – like those in construction – are able to implement those new technologies into their own systems.

The “rich” in RIA refers to the interactivity that we now experience on a web page; we no longer have to wait for a page to refresh for everything we do. We can drag, drop, expand, collapse, sort, update – all without waiting around for our browser to refresh. Most of what we do in a Windows program, we can now do in our web browser.

2. Broadband has become a utility
Broadband Internet access, or a lack thereof, used to be a big barrier to the adoption of web-based applications. Not any more. Among US web users, over 90% have broadband in their office and over 80% have broadband at home. Moreover, use of mobile Internet services like Verizon’s Wireless Broadband cards has made it possible to get broadband at any job site with a decent cell phone signal.

More importantly, broadband Internet has approached “utility-class” service levels. That is, we can depend on the reliability of our broadband Internet to match that of our electricity, water or gas. With that level of confidence, having the “Internet go down” is no longer the concern it was eight years ago.

3. Data center security
Finally, most construction firms are realizing that a professionally managed data center can do a far better job of securing and backing up their critical data than they could ever do on their own.

The modern data centers that host SaaS systems include massive security, redundancy and back-up technologies such as biometric scanning, N+1 redundant HVAC, air filtration, fire suppression, uninterruptible power supplies and separate-point fiber optic carrier access.

If those terms aren’t familiar to you, that’s the point. These data centers are deploying technology and security best practices that no small or mid-sized business could afford to put in place themselves. Contractors are realizing that their project data is safer if managed in a professional data center.

What’s next?
SaaS hasn’t completely taken over the construction software market; its use is still limited when it comes to estimating and accounting applications. However, the progress of SaaS vendors is impressive, especially in project management.

Going forward, we expect that the percentage of construction businesses that are considering both SaaS and on-premise systems will continue to grow. Meanwhile, those that remain adamant about an on-premise system will likely decline.

Don Fornes is the founder & CEO of Software Advice, a website dedicated to helping construction firms research and select software systems.