Procore vs. Autodesk: Is a Dysfunctional Relationship Good for Customers?

There's a GIF that came to mind recently – a continuous loop of Stephen Colbert eating popcorn with a smiling, entertained look on his face. It demonstrates the somewhat detached but entertaining view of the bad blood happening between two architecture, engineering, and construction (AEC) heavyweights – Procore Technologies and Autodesk. While we're interested (and can't look away), this feud doesn't necessarily impact the companies' respective products today. It does, however, have dramatic implications for the future software landscape. But is this dysfunctional relationship good for customers and stakeholders in the companies' products? This post explores what we see happening.

First, a bit of background. Autodesk is obviously the industry stalwart, and its design, modeling, and management products are used on nearly every project in the US and the majority of the rest of the world. Autodesk products are as common as concrete on projects. Procore, meanwhile, is a venture-funded enterprise resource planning system that focuses on managing business processes for the contracting community. Procore has raised $179 million in venture funding and has been aggressively building a network of users for its project management tools.

We don't know the complete story of the bad blood between Procore and Autodesk, but some tidbits have bubbled to the surface. For example, Autodesk wouldn't allow Procore to exhibit at last year's Autodesk University as a vendor. We also heard Autodesk isn't letting Procore integrate into Forge, the web viewer for project models and data. Finally, we just saw the announcement for Procore's industry conference, Groundbreak, scheduled for November 2018. No surprise when it's going to happen – the same week as the annual Autodesk University in Las Vegas.

Below are three observations that we have about the effects of the ongoing feud:

  • It makes Procore look important

    Procore and Autodesk aren't obvious competitors. Autodesk's AEC backbone is its platforms for design and modeling – AutoCAD and Revit. These platforms have insane switching costs to other software companies and are clearly industry standards. Procore is focused on cloud-based project management tools for contractors. While there's some overlap with older Autodesk products, like Buzzsaw, and emerging cloud products like BIM 360, we don't see much in the way of direct competition on the core businesses. So why the kerfuffle? We don't see Procore as a significant competitor to Autodesk today but the squabble appears to make Procore look like a threat, possibly even a bigger threat than it actually poses.

  • Buildings = Data

    We think Autodesk needs Procore. The old Case Design tag line was "Buildings = Data." If you follow trends in machine learning and artificial intelligence (AI), you know that data is a very, very precious commodity because it informs and fuels high-end computational tasks. Procore happens to manage some of the most important data involved in a project – project management documents and project financials. Procore could potentially start to correlate the project information it manages with 3D models. This could lead to actionable correlations and insights that would be very valuable to project teams. For example, the mashup of Procore and building information modeling (BIM) could create the following example insights for a contractor:

    A. On pharmaceutical projects, the biggest change order risk for mechanical, electrical, and plumbing (MEP) systems is the 50 feet closest to owner-furnished equipment. (Change orders geo-located in BIM with pattern matching.)

    B. Project teams consistently underestimate the schedule durations for exterior cementitious plaster systems, like stucco. (Schedules and schedule changes correlated to exterior systems.)

    C. Late modeling of steel supports for hanging toilet partitions result in coordination costs equivalent to 25% of the value of the partitions. (Model change correlated to BIM planning and schedules.)

    You can't make these conclusions across data sets without the project and financial information that Procore manages. And with this data, you could get specific values that would allow project teams to manage problems. It would absolutely be in Autodesk's best interest to focus on an integration into this data, rather than fight it. Autodesk has nearly no exposure to any financial data on projects right now.

  • Which company will leverage McKinsey's productivity report?

  • McKinsey & Company wrote an outstanding report earlier this year titled "Reinventing construction through a productivity revolution." It has been cited by many, including Autodesk, to prove that technology needs to be leveraged to increase AEC productivity. What many miss is a huge conclusion of the report – that the best way to increase our productivity is through a project production system. The McKinsey report spends 11 pages (pg. 115 - 126) directly describing the value of such a system. The report estimates it would have a five to ten time productivity boost in some market segments. No other innovation is given as much coverage in the report. By comparison, the word "drone" is used on just seven pages and never in its own paragraph. Which company is better positioned to leverage the findings of the report? Procore's growth into management of subcontractors positions it perfectly to make a production control system a reality. We see no similar movement by Autodesk.

In the end, the current kerfuffle between Autodesk and Procore doesn't have much of a current impact. While I'm sure the lower price point of Procore's Groundbreak will cause many professionals to opt for that trip over Autodesk University next year, it does make us think about the future and what software landscapes these companies are trying to protect. It will be interesting to watch it fully unfold.