Back in the fall of last year I got on the phone with Sean Flaherty, CEO, of Nemetschek North America, to discuss his company's recent new release, VectorWorks 2008. What was expected to be 30 minutes turned into more than an hour of intense discussion about not just the newest version of the venerable VectorWorks CAD/BIM software, but a broad discussion about the nature of BIM itself, the opportunities for integration at the software level (both horizontal and vertical), and his parent company's (Nemetschek of Germany) decision to acquire rival Graphisoft, makers of ArchiCAD.

In this series of interview articles Mr. Flaherty answers questions that have been on the minds of analysts and end-users alike. What will happen to both VectorWorks and ArchiCAD long-term? Why did Nemetschek AG buy Graphisoft to begin with? Why doesn't Nemetschek of Germany have a stronger reputation in the United States? Will VectorWorks ever hold the reputation of being a true BIM?

These are just some of the many facets of this interview series, along with a topical coverage of what makes VectorWorks 2008 such a strong product, what makes it unique, and what the product holds for users in the future. This first segment gets us started with some global perspective.

Japan, the US and the Big Firm

AFR: How did you come up with the name of VectorWorks 2008? Does this have anything to do with how Nemetschek AG named the new Allplan 2008?

Sean Flaherty, CEO (SF): We wanted something very physical to indicate the change we are making with this version. We have been on roughly nine month [development] cycles up until now, with every other release being the first digit chargeable upgrade. [Now we are moving to an annual development cycle.]

The engineering team is breathing a big sigh of relief that we are going to a longer product cycle. From a marketing stand point I guess we are shortening the cycle but from an R&D standpoint that was one of the big drivers here—to get the team timed to handle some of the bigger functional requests.

What's the difference between big and small in terms of the cycle?

(SF): I think we have been putting in a lot of important efficiency gains into the product and a lot of these tend to luckily be small programming projects. What we are seeing ahead of us now is a growing pile of fairly big things that we need to do and so this will give us a little more time for that.

Secondly, we are steadily moving into the larger and larger offices of 30 plus people, where you tend to have an IT Manager that is in charge of not only the CAD applications but budgeting. We hear a lot that they wished they knew how much it was going to cost every year so that they could get it on the budget and get the technology when they need it. We find that the annual cycle matches well with how large companies do their spending. It has nothing to do with the avoiding the number 13. Not that 13 is a bad number. [Laughs…]

Your comment about larger offices is interesting. If I understand you correctly one of the key things about this is that you are now talking more to the IT Manager and this involves the strategic costs of implementing VectorWorks long term.

(SF): Yes. What is interesting about this is that it is a very different type of marketing and when we talk to sole practitioners and small firms you are usually speaking to an architect. We are finding with the larger customers they are weighing a lot of other factors in addition to CAD.

We just want to make sure we are in a good position. The small offices are still a big priority for us but in order to continue our growth we need to make sure there is a configuration for everybody and we need to consider the needs of the larger offices. That is particularly the case in the US where we tend to have a strong hold among smaller firms. Internationally, we tend to have a bigger share of the 30-100 person firms.

Why do you think that is?

(SF): The US is one of the few countries that Autodesk has a strangle hold on the market. But it is not so in Europe, Japan and Asia. And they are important players to us because of their sheer size.

But what about cultural differences?

(SF): That too. In the US architectural market firms tend to be conservative in their risk sense, but not in their technologies sense.

Explain...

(SF): They tend to adopt things more quickly than in a lot of other countries as far as integrating new technologies go, but from a risk sense we have a lot of trouble having them look at us. They seem to want a big brand.

Our biggest problem is not convincing them that VectorWorks is a good product but getting them to stop for a second and let us start our convincing. We have a very good close rate once we get people to stop and look at our company.

And you don't have that problem outside the US....

(SF): It is interesting when I go to Japan we have 3000 person offices using VectorWorks...hundreds and hundreds of persons all using VectorWorks. We are looking at what we can do in the US to match this.

Is it also about the type of work that the architectural professionals are working on? In Japan they have manufactured housing, things like that.

(SF): I think the residential architectural market is a much bigger industry here in the US just because home ownership in the US is much higher. I probably shouldn't say it without the stats to back it up but it is just my perception.

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