Cloud-based software services within the construction and real estate sector
Zutec is developing and marketing cloud-based software services (“SaaS”) with focus on companies within the construction and real estate sector. The company’s products are helping its customers to increase productivity and cost efficiency. Zutec offers solutions within project management, coordination tools for data and document administration, data-enriched 3D-models, defect management, project handovers and operation and management of buildings. The company’s main product is its platform, which can be describe as a cloud-based database. The company can furthermore link several of its modules to this platform to increase functionality after the customer's needs.
Zutec is operating in the market for cloud-based SaaS services, with a focus on companies within the construction and real estate sector. Zutec has observed a substantial trend within SaaS services the last years. The market is quickly adopting new solutions to increase its productivity and cost efficiency. Amongst the current 65 customers lies some of the world’s biggest construction companies, which are operating in docks, airports, hospitals etc. These operations take place in countries like Ireland, Great Britain, Qatar, United Arab Emirates, Australia and Italy.
Today, numerous different methods are being used to handle projects within construction depending on which phase the current project lies. Penn and paper has previously been the most occurring method to document for instance processes and defects. This has today shifted to a more frequent use of digital spreadsheets.
Zutec’s products can be used during the entire lifecycle of a building; from planning phase through the phase of support and maintenance to demolition. Zutec aims to increase digitalization of the construction sector by providing high standard software, broad knowledge of the sector and a constant endeavor for development. The company’s customers experience significant enhancement by using Zutec’s products, such as increased efficiency, control of projects, less errors, reduced costs, access to and distribution of project data. Zutec offers certification logs, automated project updates and simple project handovers throughout the internet. Moreover, customers can make substantial savings in terms of physical storage space since project data can be stored and accessible through Zutec’s platform.
The construction sector is the second least digitalized sector (according to McKinsey) and has for a long time been under-developed in terms of productivity compared to other industries. The company see that digitalization has the potential to drive the construction sector’s productivity recovery. A sector that has started to acknowledge and implement digital means.
During 2016, The Boston Consulting Group published a report, Digital in Engineering and Construction – The Transformative Power of Building Information Modeling, regarding digitalization and usage of Building Information Modeling (“BIM”), which connects data to virtual building models. The report is emphasizing on the future need for the construction sector to prioritize digital resources when building its workforce.
BCG also estimate that a full-scale digitalization of commercial construction within a 10-year period can entail in yearly savings up to 700 – 1200 billion USD in the construction phase and 300 – 500 billion USD in support and maintenance of buildings. Clearly, actors need to increase their efforts in digitalization to be able to seize the potential that can fundamentally change the sector. Those who choose to refrain this risk falling behind other competitors.
Business model with stable revenues
Zutec’s income model is based on license fees for the software, which follows a SaaS-model (Software as a Service). This generates recurring and predictable revenues throughout the construction projects entire lifecycle. Generally, pricing for the planning and construction phases are based on a percentage of the construction projects total budget. Invoicing then occurs on a monthly or quarterly basis for an even amount throughout the projects entire duration. In the event of a postponed project, the company is continually generating income until its fully completed.
After the project has been completed, the customer can continue storing data at Zutec in conjunction with choosing Zutec’s moduls for management and maintenance of buildings. The pricing of these solutions is based on the number of users and the type of user that the customer need. In the event of bigger projects, an additional adaption of the software is done to fulfill the customer’s specific needs. This is further on charged separately.
Watch the interview with CEO Brendan O'Riordan by Finwire down below.