IN THE FOLLOWING INTERVIEW, CEO Daniel Csillag answers questions about Graphisoft and its future direction. The interview took place at Graphisoft Park during the press day following the global launch of Archicad 28.
Interview
Anthony Frausto-Robledo (AFR): What is your global vision for expanding Archicad worldwide and in markets like North America?
Daniel Csillag (DC): If you look at the overall design markets, the average global growth is about 8 percent per year. Most software companies would love to have an 8 percent growth per year, and Graphisoft has always done better than that average.
Just to clarify, are we talking about top-line revenue growth at 8 percent per year?
Yes. So, in the case of Graphisoft, it is already doing better than this industry average, and that is a good thing; we can do even better.
Daniel Csillag, CEO of Graphisoft.
Graphisoft has grown due to great technology and a very strong community [of users] that is spreading word-of-mouth about how good the software is. However, this was the case for so long that we only invested a little effort in “go-to-market” activities. That is something we aim to change because I am clearly interested in much faster growth.
The North American market, specifically the United States market, is clearly the largest in the world, and Autodesk is the big leader in that market. What country do you lead the market?
Germany is our market leader, and we are number one in that market. We need to invest ourselves anew in the North American market as our marketing activities are not focused on winning new customers. North America is the most attractive market of all, but it is also the biggest battlefield because it is Autodesk’s home market, and they have a large base of users. However, we are also growing rapidly in other significant European markets. We have seen significant mid-double-digit growth rates in Iberia (Spain), Italy, and France.
The award-winning BIMx platform started with mobile BIM model viewing but works across desktop and web on both platforms. The system has developed into a robust coordination platform for all project stakeholders with support for BCF workflows.
What are some ways you can grow further in North America?
One way is to deliver unmatched, unique technologies that the leader [Autodesk] does not have and can’t deliver. Another way is for us to partner with other software companies in North America with large and robust market shares, and we are looking at several.
I would imagine that winning in the United States versus winning in Europe is a bit different. American marketing is more aggressive, and in America, you are up against a massive player.
Everything that works well in the EU doesn’t necessarily work well in North America, and Autodesk has a similar problem here as well. Specific geographies need different marketing strategies. And yes, American marketing is more aggressive, and we have always been nice and friendly.
North America is the most attractive market of all, but it is also the biggest battlefield because it is Autodesk’s home market, and they have a large base of users.
There is certainly room for improvement. When we look at the global market, we want to see the Americas represent 25 percent of our portfolio, if not more, and we have much to go to get there. We want to see this rise significantly.
To get there, will you then have to target larger firms? You already led the global market in BIM server technologies that larger firms always needed and now, post-COVID, everybody needs.
Yes, we have built our solution to be very attractive to large enterprises, and we continue to be more appealing to larger firms. At the same time, our average customer continues to grow, but we want to move further up-market.
Does the marketing message to large enterprise firms need to be different than the one to smaller firms?
Yes, because they have different requirements. MEP integrations play a much more significant role in large firms designing much larger projects. For larger firms, the requirements are partly different.
BIMx is one of Graphisoft’s crown jewels technology-wise. The system will play a central role in the One Nemetschek Cloud for the entire group.
Your sister company, Bluebeam, has a considerable presence in large North American construction companies. Will you collaborate there to specifically target larger firms?
Yes. I am in constant contact with Usman Shuja, the CEO of Bluebeam and the chief division officer of the Build & Construct division for the Nemetschek Group. We discuss matters frequently, exchanging ideas about how Bluebeam can help Graphisoft be more successful in North America and how we can help Bluebeam be more successful in Europe.
You mentioned BIMx—an award-winning product—as part of Graphisoft’s secret sauce. Is there some integration potential with Bluebeam?
There is nothing else in the industry like BIMx. With BIMx in 3D, we can do with information what Bluebeam can do with information in 2D. I think the combination of both might be super attractive to larger companies in the North American construction markets.
I saw some integrations at the global launch event, showing Archicad 28 interacting with Bluebeam Cloud in the web browser running on the Mac and managing issues. It seems that tying BIMx to Bluebeam in the same way offers possibilities that users of both software would be looking for.
Right. Here, we have some work to do, but that is clearly a vision we have in front of us. And this is a benefit of having a sister brand like Bluebeam. Graphisoft and Bluebeam are the two largest brands in the Nemetschek Group.
There is nothing else in the industry like BIMx. With BIMx in 3D, we can do with information what Bluebeam can do with information in 2D. I think the combination of both might be super attractive to larger companies in the North American construction markets.
Getting back to the growth story and markets, these integrations with other Nemetschek brands, and so forth, are you thinking about SaaS in the cloud at different price points? Are you thinking about tiers with subscriptions?
Yes. In the past, we offered customers more or less one solution, and then we added BIMx to that. You can add BIMcloud as another add-on to our offerings. But what we will do going forward is optimize packages for different customer groups and then build add-ons on top of those packages.
In the evolving world of cloud-based API connections, it is easy to understand that direction. Would Maxon visualization also continue to be one of those add-on services?
We support Open BIM as our philosophy, so we will always let the customer decide on their rendering technologies. However, Maxon’s technologies continue to develop quickly with impressive advanced features, and that can be one functionality built onto a package.
I want to close by reviewing your markets. What are your strongest markets by country in the EU, Asia, and the Americas?
Germany is our largest market in the EU, Japan is our largest market in Asia, Brazil is our largest market in South America, and the United States is our largest market in North America.
You said, in earlier remarks, that you are the market leader in many key markets or the first challenger or, in a few instances, the second challenger.
In Germany, we are the clear market leader. If we had the same market share in the United States that we do in Germany, we would be world champion. So we have some work to do in the United States.
BIMx continues to advance into a full-fledged BIM model coordination system without losing its initial clarity and charm as an engaging and simple app that relates the user’s experience between the BIM model and drawings.
It is not easy to move people from solutions with large installed bases, but the history of technology is filled with stories of where that happens.
We must make compelling arguments for users to understand the move’s value, and we envision compelling technologies and integrations moving forward.
Thanks for the conversation.
Anthony, you are very welcome.
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