Architosh Staff (info@architosh.com)

no date.

 

Working Edit: Dialog from Graphisoft Interview

Edit Version: 9 Mar 2002. -AFR

Note to Chris: Please preview the text and feel free to make edits on your commentary. COPY AND PASTE EDITS INTO YOUR EMAIL PROGRAM AND SEND MY WAY. INCLUDE TEMPORARY NUMBERS IN BRACKETS.

AFR Graphisoft has been in the virtual building CAD market for a long time. How has that history helped prepare you for some of the new model-based architectural CAD rivals?

[1] CB. Sure. The history really helps us in a lot of ways. Not only have we tried a lot of different avenues with the development of the software but more importantly we have collected feedback from our customers for about twenty years. And what that means is that it gives our products a more robustness and thoroughness that is hard to achieve in a brand new product like Revit. So in many ways there are aspects of ArchiCAD which solve problems which some of the newer CAD players don't even know exist yet.

AFR. In regards to Revit—because this is probably one of your strongest new competitors—how has Graphisoft ratcheted up some of it technology in regard to Revit's parametric features?

[2] CB. Well...we've been doing parametrics for almost twenty years now. In terms of ratcheting up the technology to compete with Revit? That's not really a factor. Where we ratcheted up our technology is really in response to our customers. Certainly we look to see what some of our competitors are doing and if it's great we'll see if it's practical to incorporate it in our technology. However, it's very dangerous to be driven by a competitor and not by your customers.

AFR Sure. And where does Graphisoft get most of its user feedback? How do you capture that data from customers?

[3] CB. We keep an ongoing database of user 'wish lists' and we spend a lot of time out in the field getting direct feedback. We also look at what new technology is out there. Customers may not be asking for it but it is our responsibility to project what customers are going to need.

And one of the unique things about ArchiCAD is that there are a lot of architects who are in our [software] development, bringing their own experiences—you know they aren't just a bunch of programmers out there, but people who bring the 'architectural experience' into the process.

AFR. You are talking about programmers at Graphisoft's headquarters, right?

[4] CB. Yes.

AFR. Throughout the years Graphisoft has made a number of significant contributions to the whole CAD market and since the 90's the company has been acquiring smaller technology companies. What is leading the incentive to acquire some of these smaller players?

[5] CB. I think there are two things. One is that Graphisoft has gone public in the early 90's and has had the where-with-all to acquire new technologies, but also it is part philosophy: as 3D technology became a reality in the CAD market it became apparent that users could use 3D technology...the price of hardware has gone down while the power has gone up...and it has meant that 3D technology would grow and with that growth would require new technologies.

AFR. Prior to Graphisoft's going public (they are traded on the Budapest and Frankfurt stock exchanges) the company when through a large growth period. Was that growth driven by going to Windows or was there some other driver there?

[6] CB. Well, in part is was support of the Windows platform. Also many CAD vendors out there gave up on the Mac and those users which were loyal to the Mac platform found that we were a good solution for them. So Autodesk's decision to abandon their Mac Autocad users left users looking and they found that they could get a great solution from Graphisoft.

AFR. Right.

[7] CB. ...so it was a combination of various moves in the industry.

AFR. Right. So the elimination of Mac support by Microstation and Autocad actually drove users to come knocking at your door?

[8] CB. That's correct.

AFR. Now Graphisoft has been a true CAD innovator going all the way back to your early work in the 80's with Apple Computer. Where do you think your innovations will come from going forward...where will they be implemented?

[9] CB. Well, there are some ways you can predict this and other ways you just can't. One of the initiatives which we have been involved with from pretty early on is the International Alliance for Interopability (IAI), and the goal of this group is to not really have all these kind of 'islands of CAD data' but to create some standards for exchanging intelligent CAD information, not just drawings but CAD models..

And we have been involved with a project there called BLIS (Building Life-cycle Information Software). And what it is is lot more than just passing drawings between one CAD system and another. In this project we started with an Excel spreadsheet and a building program and brought that into Visio for a schematic diagram, then that data went into ArchiCAD to create a 3D architectural model, then that model was used by Timberline to do cost estimating on the construction. Another product called Energy Plus, by the Department of Energy was then used for energy analysis.

So what we started working with was...rather than a bunch of electronic drawings...really working with a digital model of the building and starting to explore what the real possibilities were for simulating the performance of the building, ultimately to improve the design of the building. So you know, going to 3D is not just for 'eye candy'...it's not just a marketing tool. It's really powerful as a design tool-used by the designers-not just some guy in a lab coat in another room.

AFR. What is the argument Graphisoft makes there?

[9a] CB. If we can model a building we can improve it. If we can really simulate what it's going to look like when we walk through it, what the sounds are going to be like when you are sitting in a auditorium, what the implications of the materials and the cost are...I think that is really the next phase of innovations.

Most CAD to this point has not really been about design, regardless of what many people say; it has really been about producing working drawings. And I think we (Graphisoft) have that handled really well. The next frontier is really to make the computer a real design companion for architects.

AFR. Along those same lines, some of your competitors like Autodesk are coming up with 'electronic sketching tools' and tools like SketchUp—these more naturalistic computer tools which are supposed to simulate the architect's more traditional drawing methods. What is Graphisoft doing to address that front?

[10] CB. Well I think you will see some things later on in the year that will address that specifically...not just turning a sketch into a model but in the modeling environment which will give you more tools to do those types of things.

I think there is a danger when you take the computer and try to turn it into a sketch pad. I think that part of the challenge, taking the type of environment where the architect is familiar with and trying to imagine where that environment can be with computer technology, is where Graphisoft wants to be.

It is more than just sketching. But you know, I love SketchUp, I think it is a great product. The nice thing is if you can take that more sketchy model and bring it into a more architectural modeling program like ArchiCAD. There is a benefit there.

AFR. Speaking of sketching and the like, a lot of architects now are walking around with Palm Pilots and other PDA or smart devices and so forth....and there seems to be a push to get CAD data on these small devices. Will Graphisoft be addressing that front?

[11] CB. You know I actually don't know if we have anything yet planned for a handheld computer. I think a lot of that is being taken care of by the hardware itself. Today what I can do on a laptop would have weighed about eighty pounds ten years ago.

AFR. So your users are not asking for that kind of a product? The PDA CAD solution?

[12] CB. No. Not yet. There are certain areas with the facilities management where that functionality is needed, but for the designer they want to sit down and have both hands free.

AFR. Sure. Let's talk a little bit about your userbase. I know you guys are grabbing a lot more users. For example, in a Boston area an architects' survey ArchiCAD had about fifteen percent (15%) of the market, whereas Autocad was down to just 49 percent (49%). Is Graphisoft targeting Autocad users directly...going directly after Autodesk?

[13] CB. Absolutely. For a number of reasons. One, Autocad has gotten as good as it's going to get in terms of drafting. There just aren't too many more ways to draw an arc.

AFR. Makes sense. I completely agree with you there.

[14] CB. And, quite frankly, they have in the US, a dominant marketshare. So most users are going to be coming over from Autocad. We like to say 80 percent of ArchiCAD users are ex-Autocad users.

AFR. Is that true?

[15] CB. (laughter...) Yea! when you stop to think about it it is not at all that surprising. Quite frankly, while Architectural Desktop has made a lot of strides, it is still something that was built on top of something that was meant to be a 2D drafting program. It doesn't have the type of system architecture you need to have to do real 3D, architectural [intelligent] modeling.

And so we would like to be in a situation where we are competing head-to-head with Architectural Desktop because it would become very clear to someone who is comparing them side-by-side that one is just much less cumbersome, much more designed for its purpose.

The other side to this is that throughout the 90's people were very busy and didn't have the time to learn, or just stop and evaluate a new CAD program...but things are changing a bit now. There isn't that backlog of work maybe...and they realize now is the time to sit down and do an evaluation. They know 3D is coming and they now have the time to be interested.

AFR. That makes a lot of sense. I talk to many folks regularly and it is true, they get too busy and they literally do not have the time to learn a new system and that is definitely a challenge for utilizing new software during a boom period.

AFR. In terms of an approach to persuading an Autocad user, what is your angle?

[16] CB. I think there are two things. One we talk about the productivity. There is a quote from one of our customers-Orcutt Winslow Partnership, who have about 65 Macintoshes using ArchiCAD in Phoenix-and they said, "by the time I'm done with design development my construction documents are about 60 percent complete". And that really gets to the real advantage of model-based design inherent in ArchiCAD. The construction documents are almost bi-products [of the model]. So there is tremendous productivity there.

And then the other things is that when you have a lot of people drafting with Autocad, you usually have a lot of designers designing and then you have the production crew drafting on Autocad. With ArchiCAD it's is a different situation. The people doing the designing are working with the product. You know, the thing I like about ArchiCAD is it just puts the fun back into design.

Designers can design up to the last minute, they can revise the design in the model and not just think of it as a marketing tool. So the two things we really push in our marketing to Autocad users is the enhanced productivity and the fun.

AFR. I want to talk a little about your users. Do you know if many of your ArchiCAD users on the Mac are migrating to Windows or vice versa perhaps?

[17] CB. You know, there is very little migration off the Mac. What you have is the remaining folks coming from Autocad and Microstation [Editor's note: both produced Mac versions which are no longer supported]. The people that were using the Mac and not getting the support anymore are migrating to ArchiCAD because they don't want to give up the value of the Macintosh.

There are some cases where a firm has not really made a commitment to any one platform and they have done an evaluation and and some cases they go with the Mac and sometimes they go with the Windows platform. But generally, if someone has been using the Mac they stay with the Mac, they are quite loyal to that platform.

The reason why people would migrate off the Mac is because they can't get a software solution that they need. And our customers [on the Mac] are finding solutions they need and want.

AFR. So the kind of peripheral solutions for ArchiCAD architectural users are out there...they are available?

[18] CB. Yes. They are out there. There are probably fewer of the heavy engineering solutions for Macs, so if a firm is doing heavy engineering work in addition to architecture then they want to be on the Windows platform.

AFR. I read somewhere on your site that in 1991 ArchiCAD was the top architectural CAD product in Europe on the Macintosh. Do you still know if that is the case today?

[19] CB. Well...I don't think that anyone else has come along and changed that, so yea. And some of the other architectural packages that were on the Mac have gone away over the years and, of course, VectorWorks is a package that has some presence in the European market. But we are actually quite strong there...we (Graphisoft) have a bigger marketshare there than we do in the US.

AFR. Your marketshare percentage is bigger in Europe than in the US?

[20] CB. Yes.

AFR. What is your worldwide userbase?

[21] CB. Just over 100,000 users.

AFR. And what percentage of the overall market does that constitute?

[22] CB. Well, on a worldwide basis it's probably—if we look at just the architectural CAD market—it is probably just under ten percent. But in certain markets—like Germany, which is the third largest CAD market—we have about a 30 percent market share. And understandably, in Hungary we have about a 75 percent market share.

AFR. Right. So on a European basis then your numbers are actually quite high?

[23] CB. Yes. In the US we are probably about ten percent.

AFR What percentage of your total customers are on the Mac versus Windows?

[24] CB. Right now its pretty much evenly split, 50-50. I would say among new customers it's probably a 65 to 35 percent in favor of Windows.

AFR. Well that ratio makes sense given that you are going after and grabbing Autocad users [which can only be on Windows for the most part].

[25] CB. Yea.

AFR What percentage of ArchiCAD users are non-architects, do you have a lot of downstream users like builders, contractors and subcontractors?

[26] CB. You know we do have a lot builders and contractors, home builders for a number of reasons. One, they can use the model to get very good quantity takeoffs, because of the parametric objects they can change the materials of say, facades from brick to wood and so forth and automatically see the cost implications. That kind of flexibility with object technology is very attractive to home builders.

Facilities management is a big target for us too. For a couple of reasons. One if you look at the overall demographics of the building industry something like 80 percent of the buildings in our life time would have been built already. For a lot of these buildings, the industry is really focused on maintenance and management of these existing buildings. And the other reason for this is that as we start to build a virtual model of the building that information has a useful life beyond construction and it's only natural to bring that into the facilities management market.

AFR. Now does the ArchiFM product have its own internal database or can it interoperate with databases products like FileMaker, Access or Oracle?

[27] CB. It works with Oracle and SQL.

AFR It doesn't work with FileMaker?

[28] CB. No, I don't believe it does yet.

AFR. Is it also true that ArchiFM is not available for the Macintosh?

CB. The main ArchiFM software runs on Windows only. A Mac on the network can be a client and view the ArchiCAD data, but the program has to be run from a Windows machine.

AFR. Now your GDL technology is really crucial to ArchiCAD. Is that GDL technology crucial to ArchiFM as well?

[29] CB. Yes, because ArchiFM is using the same objects as ArchiCAD. Basically ArchiFM is an add-on to ArchiCAD.

AFR. Now in the objects technology, are you guys getting a good rate of adoption from building manufactures?

[30] CB. Most of the focus in targeting that has been in Europe first, for a couple of reasons. First, in some ways the European manufactures have been more embracing of new technology. They see the value of having something more than just 2D information. Some of the areas where we have had the most interesting adoption is in Japan...where they are really looking at more than just placing symbols in a drawing. They are really looking at using the parametric capabilities of GDL objects as a 'configuration tool'.

For instance, there is a division of a large Japanese modular kitchen manufacture that basically uses GDL objects to configure almost a million different configurations of this modular kitchen system. And then from the model data they can derive product drawings and a bill of materials down to the screws for the cost for it.

AFR. Right. That's powerful stuff.

[31] CB. We expect to see more and more of that. In fact, in the US, Office Depot has gone with GDL [3D objects] and they are using it for their online catalog. You can literally rotate their office furniture online and even open up the drawers and look inside, all from the Web as a potential customer. ArchiCAD GDL technology has a wide array of industry applications.

AFR. Why is Graphisoft investing in company's like ObjectsOnline and Expression Tools?

[32] CB. Well, in terms of ExpressionTools—that's been a couple of years now—it's a great technology and used very widely in the Japanese market. It was also to work with them to get them to support GDL technology in their rendering technology.

AFR. I see. Does that functionality of GDL exist now?

[33] CB. Yes. ETShade supports GDL now.

AFR. Do you know if a lot of ArchiCAD users are using ETShade as a highend rendering tool?

[34] CB. Not sure about how that has taken off. In respect to ObjectsOnline, one problem with GDL objects is how do you get that technology out to people and ObjectsOnline is one example of how you do that.

There are about 100,000 objects in different categories online at ObjectsOnline. It's valuable stuff. I will give you an example. You may have an architect doing a health club and instead of creating all the models for all the gym equipment he can utilize these pre-made objects and incorporate them into the model. In fact, the new iMac 2 by Apple is already a GDL object.

ArchiCAD on the new UNIX: Mac OS X

AFR. Let's talks a little bit about Mac OS X. You guys were the first CAD platform to be on Apple's new UNIX operating system. Was that push driven by your customers or was it a strategic marketing move?

[35] CB. It was more strategic. Part of it was wanting to demonstrate our ongoing commitment to Apple's Mac OS platform. And when one out of every two customers is a Mac user it's kind of important to be early.

Our principal motivation was to show our commitment, that the Mac is an important platform and that we would be there for our customers.

AFR. Did Graphisoft feel that with OS X being a UNIX-based system that perhaps there was even more of a reason to support Mac OS X?

[36] CB. Well, I think that it will make it an easier support, a more robust operating system and as OS X continues to develop there will be some noticeable performance reasons. The development process was pretty straight forward for us and was not a horrendous effort.

AFR. I think there has been a lot of comments about Linux, especially in the last week, with the Linux conferences, about Pixar and Dreamworks switching to the Linux platform...and just the highend 3D market's interest in Linux over proprietary UNIX OS's. So it seems that it is only a matter of time before Linux lands on the architect's desktop. Is there any discussion at Graphisoft about that?

[37] CB. Yeah. I don't necessarily think that it is part of our product plans-though we are always looking at product trends-I mean any more than UNIX has been a major factor on the architectural desktop. It is one thing for Pixar where they are really doing highend stuff and they have never really been involved [users of] with the mass operating systems like Mac or Windows.

We will look at what our customers want. We won't do it just to do it.

AFR. With new 3D architectural CAD products like Revit and BOA coming on the scene, they seem to be validating Graphisoft's original CAD thesis about the "virtual building" paradigm. But how is Graphisoft going to compete with these newcomers in the future since they seem to be offering the same CAD promises and paradigm as ArchiCAD but at a much lower price point?

[38] CB. Well, I'm not really familiar with BOA yet, but with Revit's pricing model I don't think it has been one that is very successful. There is a real problem with an architect operating a mission critical piece of software like CAD and if they can't make their payment their tools go away. That's just bad-it doesn't work.

The architectural business is very cyclical, can go very up and down, so it is important for architects to own their software tools.

AFR No, you raise a very good point. The AEC business can be very uneven even in the middle of an economic cycle.

[39] CB. I think for some customers the price is the overarching issue. But for most because this is the tool of their trade, they don't want to buy a cut-rate tool. My challenge is to provide enough benefit and value so it is worth the cost.

AFR. I guess one of the things I continue to think about is that with sophisticated CAD products like yours where there is a continuous increase in new functionality, isn't that pushing your product more up-market? And if so doesn't that require a larger revenue base or more margin thus driving the price up?

[40] CB. No. I think the market is moving upmarket anyway. People are becoming more sophisticated in their use of computers and expecting more for it. And we are not raising the price of ArchiCAD...in fact we just lowered the price of the first seat.

AFR. How has the Mac Graphisoft userbase reacted to the new OS X version of ArchiCAD?

[41] CB. I would say that it is a little early to say. They really like the implemenation in terms of the user interface (UI). We had to wait to 10.1 because there were some issues in respect to printing and so forth. And also because architects don't rush out and upgrade to new software generally. Especially with an upgrade to a new operating system and then to put on top of that a new CAD system.

There tends to be a slower adoption. But the initial reports have tended to be positive. And we will continue to improve it and take advantage of some of the performance features there.

AFR. How as Apple been as a developer to work with?

[42] CB. You know I can't say directly because the development takes place in Budapest, but as you know we came out virtually simultaneously with OS X and Windows XP and I would say Apple must have done a pretty good job to support us, to make that happen.

AFR In terms of that peripheral of software products built around ArchiCAD, have you seen a lot of support there with OS X so that ArchiCAD users on the Mac can come over to OS X?

[43] CB. Umm...That's a good question. Those products that have always enjoyed a substantial part of their userbase on Macintosh—like Art-lantis—you can be pretty sure they will be on OS X soon. And for those products, since they run inside of Graphisoft or are connected, they had to wait until we were over on OS X. It's a two step process.

AFR. Sure.

[44] CB. You know from a user perspective, I think people are really looking forward to the type of performance and user stability that OS X promises.

AFR. Right, well certainly from the point of view stability the operating system (OS X) is....(laughter) light-years ahead of where the old Mac was -- and even ahead of where Windows is today in my opinion. But we'll just have to see how that plays itself out.

AFR. You mentioned Art-lantis and I wanted to ask you a little bit about modeling and 3D because a lot of action in the studios in architecture schools, both here and around the world, is taking place with more advanced tools, like Alias's Maya, Lightwave 3D and others...students are obviously encouraged to be inventive and they have their heroes like Frank Gehry and so forth and they are trying to do some really cutting edge stuff.

Are more advanced 3D modeling functions planned for ArchiCAD to get beyond the normal box-functions that make up traditional buildings?

[45] CB. Yes they are. And some of these things will be incorporated into the next version which will probably come out towards the end of the year. There is a difference between completely free-form design...and Frank Gehry is certainly at the cutting edge. I think he actually uses CATIA and can go straight from model to manufacturing...but certainly...in architectural design today there is much more interest in being able to do a more free-form. And where we try to be is to maintain the balance between pre-defining certain types of objects and giving the architect the tools he needs to easily construct custom ones.

Some of the tools you just mentioned tend to be a little too expensive for most architects...and that is the other problem we are trying to work with: looking at the tools which most architects want to use and can afford and try to respond to that.

AFR. Is Graphisoft still motivated to partner with companies that provide advanced rendering technology or is Graphisoft thinking of providing those technologies inside ArchiCAD?

[46] CB. Well...we want to focus on what we do best. And we have had a long and very good relationship with Artlantis and of course some others—you mentioned ExpressionTools (ETShade)—so, yes, we would like to focus on our area of expertise and while we have some rendering technology built into ArchiCAD, we really want to focus on building the model and getting the drawings out.

AFR. Well Chris I want thank you for talking to Architosh about ArchiCAD and Graphisoft's future with architectural CAD and facilities management products. It's been a very interesting discussion and I wish Graphisoft the best.

Chris. Sure. Thank you.

End.