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The Revit Open Letter Through the Lens of QWERTY-Nomics

Economist Milton Friedman said, “the most important single fact about a free market is that no exchange takes place unless both parties benefit.” The truth of that fact is up for serious debate amongst AE firms who have signed the recent Nordic Revit Open Letter.

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Superman Syndrome and IBM

One may say then that many architects are set up exhibit Superman Syndrome. When it comes to the world of design, they are encouraged to be Superman; when it comes to the world of technology and business, they revert to Clark Kent, Superman’s incredibly conservative and cautious alter ego. 

Clark Kent is the type of man who, if tasked with the selection of acquiring new technology to run the newspaper business where he worked, would surely call up IBM. In a fascinating article from Forbes titled “Nobody Gets Fired for Buying IBM,” author Duena Blomstrom, author of “Emotional Banking” and co-founder and CEO of PeopleNotTech, opines, “why didn’t they?”

The article explores the rationale of why people did not get fired for buying IBM in the 20th century. Blomstrom writes, “According to them, it was the only safe bet—when employees in various organizations were mandated to find the best piece of software or consultancy for a certain project, should they have bought it from IBM, this was to shield them for repercussions if anything had gone wrong as they presumably had the strongest of reputations for not allowing that to happen.” 

In the mid-late 20th century, IBM was known for only taking on projects they believed could deliver on what was expected. Blomstrom writes, “It’s a fascinating lesson in branding.” As hereto mentioned, Autodesk’s brand reputation in AEC has similar gravitas, but one built around a security mindset of avoiding the negative externalities that Autodesk AEC rivals cannot yet ensure their customers may experience. 

A Way Forward

Open Letter firms are not trapped; they have options. The first thing they ought to set straight is to figure out if their organizations are what Blomstrom calls “IBM-buyers,” meaning IBM-buyers don’t feel entitled or mandated to take what appears to be risky decision-making on behalf of the company. 

Not wanting to condemn IBM, which does make wonderful products, Blomstrom advises: “Organizations that learn how to create and then religiously foster true bravery are incommensurably more successful than those that don’t, and the gap only stands to become more pronounced in the years to come, where the human element of decision making will become the competitive advantage.”

It is a stunning quote for the Open Letter folks to hear, and it has this author contemplating the notion that the human element grows even more critical in the future when over-the-shoulder AI becomes more common. As for bravery, some firms from the Open Letter have stepped up evaluations of alternatives. 

Nils Fischer of ZHA says, “Quite frankly, it is at the point where any viable product is now being investigated.” Dave Moyes of SimpsonHaugh adds, “for my practice, we have started investing in other tools, and we are actively engaged with the usage of Archicad.” While some firms may move slowly in this direction, others on the Open Letter will take a wait-and-see approach, perhaps even more, now that Autodesk has announced its paradigm-shifting direction with Forma. 

Forma for others will have precisely the opposite effect. We opened this article around the story of the QWERTY keyboard path to dominance. QWERTY-Nomics as defined by economists Paul A. David looks at factors like technical interrelatedness, economies of scale, and quasi-irreversibility. All three conspire to direct decision-making that compounds net benefits for the adoption of the system with the most significant adoption. But Forma is starting from ground zero. 

The announcement of Forma sends powerful signals to the market. Eschewing the details, for now, one signal is that further investment in Revit should be likely tempered. Until Autodesk explains how future Revit investment carries long-term value into Forma, the Revit market is expected to be cautious. Another signal is to firms on alternative platforms. Why point the ship towards Revit now if a massive paradigm shift is afoot? The Forma announcement just solidified the user bases of rival BIM systems, who may coincidentally have little interest in a paradigm shift. 

For Open Letter firms, Forma does provide some form of an answer by Autodesk about the Letter’s issues. To discuss their reaction to Forma is deserving of a separate article. 

Closing Thoughts

During the 1940s, the US Navy experimented with the faster and more efficient Dvorak Simplified Keyboard. The Navy’s studies showed that the cost of retraining on a new, more efficient system paid for itself quickly. But a government study and the stochastic decisions of a free market lead to different outcomes. In the case of QWERTY, the free market failed. The less performative system became the de facto standard keyboard layout that is seemingly intractable.

What the Open Letter group should be asking is: does the AEC market truly function best under a de facto standard, or would it perform best without one? Because of network effects and various positive externalities—including those that universities reinforce for selfish and unselfish reasons—some technical markets tend to steer towards de facto standards. 

 

 

Organizations that learn how to create and then religiously foster true bravery are incommensurably more successful than those that don’t, and the gap only stands to become more pronounced in the years to come, where the human element of decision making will become the competitive advantage.

Duena Blomstrom

 

 

Such standards, like whales in too shallow of water, can run a ground whereby the core benefits of the system diminish against a landscape of extensive positive externalities that ultimately do not fully compensate for the core system’s shortcomings in the final benefits analysis. Friedman will say no exchanges occur unless both parties benefit, but some exchanges are now taking place with one party feeling far less benefit. It thus begs the question, is the AEC software market not genuinely free or simply perceived as such? And does the difference really matter? Either way, the Open Letter firms have options and will make choices. 

In the meantime, David’s QWERTY-Nomics does clarify aspects of the AEC market that seem especially pronounced. The Open Letter groups should invest time in helping the overall AEC industry (including academia) understand how factors such as technical interrelatedness, economies of scale, and quasi-irreversibility of investment have led to where the industry stands today. 

Revit is not a market failure like QWERTY. Revit is a market success that has—along with its key rivals—ushered in the BIM transformation. But this overall transformation—the complete digitization of the AEC/O industry—requires much further optimization and specialization, and the big failure point now appears to be industry concentration itself because it is unable to keep abreast of the industry’s development needs at the pace required. 

In other words, if the AEC industry had true neutral data interoperability standards (industry-wide compatibility), providers’ economic incentives and activities would shift away from focus (or reliance) on network externalities and lock-in and instead be forced into faster-paced competitive races or shift into specialization—both factors that would increase the social welfare of the entire AEC industry. 

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