Company focus BuildOnline has just merged with a US rival – and now it’s going global
BuildOnline may be slightly smaller than IBM, but it has adopted its strategy of taking over document management firms. Last month the UK outfit, which provides collaboration software for project teams, merged with US rival Citadon.
The result of this union is a company called CTSpace, with turnover of £10.2m. This creates computer programs that allow the members of a project team to share the data they input. Gert-Jan de Kieviet, the managing director of CTSpace’s North Europe, Middle East & Asia (EMEA) division, says: “We didn’t want to follow the market’s development – we wanted to lead it. I’m 100% certain that what happened in the document management market will happen to our market.”
A former IBM man himself, de Kieviet thinks that the market has matured so that clients want software providers that can follow them around the world, and supply them with ever more sophisticated products. And in BuildOnline’s case, these clients include Balfour Beatty and Ikea.
When BuildOnline set up in 1998, it produced software for use on isolated projects. Once a project was completed, so was the involvement of BuildOnline.
These days clients want to integrate the software with their own files, which means getting two systems to communicate with each other – a longer and more difficult process.
“Clients wanted further development,” says de Kieviet. “More customers were asking for integration, and to finance that you need to be of a certain scale.”
Big customers were also asking BuildOnline to support them in far-flung places, such as Australia and China, and the company was struggling. “As there are more global customers, only a global collaboration firm can support that.”
Finding the right partner was key. The US was the obvious place to expand as it was a market that BuildOnline had hardly been involved with.
“Building something from scratch in the US would have been mission impossible,” chuckles de Kieviet. So BuildOnline scoured the States, talking to the biggest players and some smaller ones.
Building from scratch would have been mission impossible
Gert-Jan de Kieviet
It was clear from the beginning that Citadon would provide the best fit – 99% of its business was in the US whereas 99% of BuildOnline’s was in Europe.
CTSpace now has a global workforce nearing 100, including a team of 35 in India. This was set up 18 months ago as it was “very economical” to do so; the firm has also found its first partner in the Chinese market.
Over the next two or three years, the firm aims to double in size, meaning turnover will top £20m – not bad for a company that does not intend to diversify beyond collaboration tools.
There are three divisions – north EMEA, south EMEA and the Americas (the China division is based in the US).
De Kieviet’s plan is that north EMEA will take on the Eastern Europe market. “We’re quite likely to set up an office there,” he says. “It’s amazing what is happening in Eastern Europe – there’s an amazing amount of business and at the moment we’re just scratching the surface.”
As ever in Anglo-American relations, it’s the Yanks who have the upper hand – CTSpace’s headquarters are in San Francisco – but it was a reality that BuildOnline had to face up to. After all, the US remains the world’s biggest economy.
US or UK-based, though, this is now a truly global business. Unless rivals soon acknowledge that they have been left behind, they will struggle to compete.
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Founded December 2006 out of a merger between the UK’s BuildOnline and US-based Citadon. BuildOnline was founded in 1998, Citadon three years later
Chief executive Howard Koenig, formerly of Citadon
What he says: “Our [Citadon’s] client list already reads like a who’s who in vertical industries. Now combined, we are unrivalled in our ability to provide global collaboration expertise.”
Turnover £10.2m. BuildOnline and Citadon provide roughly a 50:50 split
Offices US, UK, Germany, France, Austria, India, Dubai
Major clients Balfour Beatty, BNP Paribas, Centrica, Chicago Transit Authority, Ikea, Strabag