Bentley’s Now Public—YII20 Highlights and Re-Attacking the Architecture Market

BENTLEY’S YEAR IN INFRASTRUCTURE 2020 was held virtually this year, following the pattern held by almost all conferences due to the global pandemic. In this article, we want to cover two primary themes, the first being a general summary of highlights on this year’s YII2020 conference and, secondly, a discussion about how Bentley aims to re-engage with architects in the BIM market with its OpenBuildings Designer platform.

Bentley YII 2020 Highlights

One of the key themes Greg Bentley made clear in his opening remarks this year was the importance of infrastructure resilience. This had new meaning this year, given the global pandemic’s impact on the entire world. Certain infrastructure—like digital communications infrastructure—became suddenly much more important, as the world’s population isolated at home and places of work in towns, cities, and suburbs largely became abandoned.

 

 

 

 

Bentley also noted that as a global software company, their own transition to work-from-home orders went seamlessly as they are already accustomed to working remotely amongst their various teams worldwide. They took that expertise and applied it to their customers to help them better transition to work-from-home (WFH) methods and workflows. “Many have said that ProjectWise was a saving grace for virtualizing their work in the world,” said Greg Bentley during his Media Day remarks. In fact, Bentley offered the most generous and extended trial of ProjectWise 365 during this year’s pandemic, taking free use from the spring time-frame all the way into the fall.

Economics

This year Bentley went public (only several weeks ago) and is now traded on the NASDAQ under the stock ticker BSY. As such, the company revealed market segment financial data as part of its communication to investors. As you can see from the first image below, Bentley’s Commercial / Facilities sector—which the company refers to as “vertical infrastructure” extends from the 12 o’clock position to about the 1 o’clock position, making up about 1/10 – 1/12 of revenues by all sectors. Greg Bentley referred to this segment of their revenue as “relatively small.”

The next sector, Industrial / Resources, relates to the energy and commodities markets and is “exposed to cyclicality,” as Greg Bentley noted. The next sector is actually part of a larger public works sector and that is Roads and Bridges (what the company lumps into their “horizontal infrastructure” category), which makes up slightly more than twice the revenue as vertical infrastructure category where buildings and facilities live. Bentley’s next sector is T&D Utilities (electric transmission and distribution), Municipal and Mapping, Rail and Transit, and Water and Waste are the final sectors. As you can see, the green sectors are all part of Public Works & Utilities and makeup approximately 60 percent of their entire revenue. (next image)

Bentley’s public financial numbers state the global CAD giant posted revenues USD 737 million in 2019, a 6.5 percent increase in growth compared to 2018. Gross profit was USD 593 million. Bentley’s EBITDA margin is 28.12 percent, beating a sector median of 12.67 percent. It is a very efficient company in terms of its employees with net income per employee at USD 31.28 thousand, besting a sector median of 7.97 thousand. The stock IPO’d at USD 22.00. As of this writing, it is trading at USD 36.93.

Greg Bentley stated that Bentley believes they are the world leader in software technology for the global infrastructure market, with sector leadership in Roads and Bridges, T&D Utilities, Rail and Transit, Water & Waste, and in the structural engineering disciplines and the geotechnical engineering disciplines generally.

Bentley began with one application, the CAD application called Microstation, in 1984. That application in the United States and other western markets like the United Kingdom captured significant market share by the 1990s in the AEC industry, competing head-on with Autodesk’s popular AutoCAD. By the start of the current century, and with the BIM market blooming around the high-profile Autodesk acquisition of Revit by Autodesk, Bentley began to focus more on horizontal infrastructure, becoming the world leader in CAD technologies for transportation departments in many countries, including the United States. (see image)

Their Open Modeling application tools began in the early mid-years of the aughts decade, taking the company into the BIM market for AEC. Open Simulation applications came next, and then AssetWise emerged to help their clients manage infrastructure, a key new source of revenue after the Great Recession decreased global infrastructure spending. In 2018 they announced iTwin Modeling after Reality Modeling technologies also emerged. All of these vectors of tools and technologies have enabled the company to offer a complete stack for 4D Digital Twins, leaving the company very well positioned for the next wave of global infrastructure and smart infrastructure investments.

Markets and AEC

Greg Bentley says that his company’s strong suit is its “comprehensiveness.” Other competitors may have strong single or multiple applications addressing various parts of the infrastructure market, but only Bentley has this full stack of solutions. Larger companies like Hexagon, Trimble, and Autodesk offer a far less complete set of infrastructure solutions. And Bentley is a leader in “structural and geotechnical engineering software” that compliments infrastructure design software—whether horizontal or vertical in nature.

In some ways, Bentley is similar to Germany’s Nemetschek Group. Both companies make approximately the same amount of revenue with similar gross margins. While Bentley’s focus and strength and revenue are more on its “horizontal infrastructure,” the Nemetschek Group’s focus is more on “vertical infrastructure.” Both companies own leading engineering analysis tools for structural engineering, and both have solution portfolios focused on the management of infrastructure assets. A small difference with each company is that Bentley has just gone public while Nemetschek has been a public company for much longer and has seen substantial growth in its stock price.

In the wake of the Revit Open Letter in the UK, I asked the company to discuss its position in the architecture market. Building design and engineering all fall in their “vertical infrastructure” category. Given the Revit Open Letter’s timing and that, nearly all of the large AE firms who signed the letter were, or are, Bentley customers, it seemed appropriate to discuss with Bentley where its OpenBuildings Designer application is headed and if Bentley has any interest in re-attacking the architecture market. It turns out it does. But before we get to that, let’s recap some of the highlight news from Bentley’s YII 2020 conference.

One final point, though. Greg Bentley noted that 30 percent of the world’s infrastructure expenditure comes from China, while 50 percent comes from Asia. It is not surprising then to see the sheer amount of projects submitted for its YII awards program coming from this region of the world. From the image above, we can also see that the global infrastructure market is worth USD 3.2 trillion, while Roads and Bridges are worth 1 percent of global GDP, and Rail is worth 0.4 percent of global GDP. Using 2019 global GDP, that amounts to 1.42 trillion and 0.56 trillion, respectively. From 2016 until 2040, the infrastructure market is worth USD 79 trillion.

Announcements at YII 2020

This year, there were several interesting announcements, including items we have already covered on Architosh, such as its finalists and winners of its Year in Infrastructure Awards, the appointment of three new key executives, and Bentley expanding its alliance with Microsoft to accelerate infrastructure digital twins. You can read all about these at the links just provided.

The first of these interesting announcements was about FutureOn, a fast-growing Norwegian software company with a growing global customer base of energy giants. It has secured an investment from Bentley’s Acceleration Fund and partnered with Bentley to combine FutureOn’s award-winning field design app (FieldAP) and its API-centric collaboration platform (FieldTwin) with Bentley’s iTwin platform. This will give joint customers a next-generation digital twin solution. You can read more about that here.

Another announcement was that Bentley and Siemens Energy are now offering a joint solution to deliver intelligent analytics to oil and gas operators. This solution should help equipment uptime and reliability while reducing the cost of maintenance and safety risks. The new solution is known as Asset Performance Management for Oil & Gas or APM4O&G and taps the power of AssetWise. You can read more about that here.

next page: Bentley and Architecture

Bentley and Architecture

During Bentley’s conference, I had a virtual meeting with Susanne Trierscheid, who is a senior director at Bentley (and educated as an architect in Germany) and is now the lead person for all the “vertical modeling” tools (including OpenBuildings products and all similar products around Plants and all the structural detailing engineering tools); I also spoke with Eduardo Lazzarotto who is the product manager for all the “building” modeling tools, of which the most prolific tool is OpenBuildings.

 

 

 

 

One of the things I brought up in this conversation with Susanne Trierscheid and Eduardo Lazzarotto was my discussion with Elaine Lewis of Cadventure in the UK. I told them that I was surprised to learn from that conversation that many of the firms who signed the Revit Open Letter were at one point (five or more years ago) on the Bentley platform. I asked Trierscheid if Bentley was now, in light of the Revit Open Letter, recognizing new opportunities for them back in the world of Architecture.

She answered in the affirmative, saying, “we believe that this is a good opening for us to tackle that again with the architects.” “We talk to Cadventure a lot, and we know each other well,” she said. “And of course, we listen to their messaging because they talk to a lot of users. So we believe that at the moment, the opening is very good.”

While it has appeared that Bentley has backed away from the architecture market, Trierscheid explained that Revit’s dominance in common sized firms, which range from very small to medium to very large made it more logical for Bentley to retarget where they would market their building solutions. But things are changing for them now due to a confluence of inputs, and the Revit Open Letter was just another one highlighting some factors. For example, a major complaint of the UK firms who signed the letter had to do with performance and commitment to interoperability and open standards.

 

 

 

Bentley knows from their own award program that their Microstation-based products like OpenBuildings Designer can handle massive projects on the performance front. This is why it has been successful in large infrastructure, whether that infrastructure is vertical or horizontal. “So we need to focus on the larger practices,” said Trierscheid. “They need to feel our rekindling of focus on building and modeling again.”

“I think we are going to really go after the larger projects and tackle this whole collaboration angle,” said Trierscheid, “as well as the modeling because that is also where we are really strong. ” For those who are not aware, Bentley’s Microstation-based technologies tap the power of the Parasolid modeling kernel, the world’s most advanced 3D modeling engine.

OpenBuildings Designer has a sibling product called OpenBuildings Station Designer to address rail and transit station design. It features industry-leading pedestrian simulation technology, which can now address social distancing and other pandemic response design. (see above). This is a sub-sector focus backed up with specialized tools for this sector.

Trierscheid also noted that OpenBuildings Designer could focus on sub-sectors like manufacturing and large campuses, in addition to architecture related to rail stations. With the former, Bentley’s GenerativeComponents (GC) algorithms-aided design (AAD) technologies can address layout optimization inside factories. GC and OpenBuildings Designer (OBD) core strengths in modeling also make it highly suitable for buildings with complex forms. While a lot of this work is now done in Rhino with Grasshopper, OBD can reference Rhino files. A smarter move might be to tap the Rhino.Inside API and enable Rhino and Grasshopper directly inside OpenBuildings Designer. Such a move might seem to conflict with Bentley’s own GenerativeComponents. Still, I would contend such thinking led to the hesitation of integrating third-party renderers in leading BIM programs, but today the more rendering tools you can tap into, the better and more flexible the BIM solution is to users.

It is time all BIM platforms start recognizing that generative design or AAD tools from third-parties need pathways into these BIM solutions, even if those BIM solutions feature home-grown AAD technologies. The mantra in the market is “agility,” and the democratization of tools aids that agility. Bentley should take its GC technology and build-out “ready-to-go” computational design workflows that buttress and support targeting sub-sectors of the building and campuses market. Tools for large, expansive complex roofs typical of airports and large rail hubs could be dovetailed within OBD and Bentley’s structural analysis tools, for example. GC technology can be customized for optimized layout design in factories and manufacturing, as Trierscheid suggested. Those efforts are not mutually incompatible with allowing Rhino.Inside into OpenBuildings Designer (OBD). Allowing Rhino and Grasshopper functionality directly inside OBD gives OBD instant access to a large ecosystem of AAD specialized toolsets.

OpenBuildings Designer—Today

Lazzarotto ran through the latest version of OpenBuildings Designer (Update 7). It was released a few months back. A big new feature is integrating OBD’s structural elements with Bentley’s ProStructures, a software used for structural detailing. “What this means said Lazzarotto, is that the architects or engineers can now detail some parts of their project to a much higher level of development for their project, and it makes it a lot easier for them to integrate with products like STADD and RAM for structural analysis.”

They also integrated Bentley’s separate product Hevacomp Dynamic Simulation into the latest release of OBD. “What we did is convert that tool into what we now call OpenBuildings Energy Simulator,” said Lazzarotto. Bentley also offered two language versions of OpenBuildings Designer, targeting the Czech Republic and Russia’s growing markets. “Russia is a growing market for us, not only for OBD but for a range of Bentley products like OpenRoads, OpenRail, and so forth,” he added.

Update 7 also addressed major fixes and added new features, like improvements to the stair tool and also curtain walls, which are relatively a new feature in OBD.

OpenBuildings Designer—Future

Without getting into specifics, Lazzarotto said that GenerativeComponents (GC) was now a technology at Bentley and that Update 8 for OpenBuildings Designer will tap more of this AAD functionality. Providing a clue, both OpenRail and OpenRoads tap the power of GC now. “What we are doing is treating GC as a technology rather than a product…and we are investing in the technology itself and the functionality and capability of that technology,” he added.

 

 

 

 

In asking about the future of API integrations with OBD, Lazzarotto said it was a great question. “We name our products ‘Open’ because we want them to be interoperable with other applications in the market. All of our digital twin apps are actually open-source code. iModel.js is actually open for any developer who wants to build solutions on top of it,” he said.

Another issue that came up in the Revit Open Letter was standards. Lazzarotto said that they are working to align their data sets to ISO 19650. “That is something we will definitely want to talk about early next year with our next release,” he said. Bentley is also still investing a lot with buildingSMART given IFC 4, Reference View. He added that it is more than just the architectural side but the structural side as well. “Of course, the whole idea of Reference View is that users can make their data portable and take that data into other applications and add value to those applications.”

Closing Commentary

Bentley looks to be acknowledging the importance of convergence in our world. By building out solution stacks (combinations of apps that work together in well-honed workflows) built specifically for “vertical infrastructure” related to the “horizontal infrastructure” where the company is a market leader, you end up with offerings like OpenBuildings Station Designer. This product’s unique selling point (USP)—a topic in itself we covered in our last Xpresso issue—is its ability to simulate a station’s usage and operations and predict real-world performance. With COVID-19 now a part of simulation criteria, it was not surprising to learn that LEGION’s latest updates could handle new social distancing simulation.

Could there be more OpenBuildings-branded product suites to come? Susanne Trierscheid noted that it might not make sense for Bentley to compete against BIM tools like Revit that are aimed at the whole of the entire architecture market. Specializing on large buildings, buildings tied to horizontal infrastructure, campuses, and manufacturing seems like a strategy that will enable Bentley to offer deeper capabilities and unique selling points (USPs) that separate them from the crowded BIM market.

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