If you can't beat 'em, join 'em: why con-tech integration is key
Oracle Construction and Engineering has been steadily growing since it formed with the takeover of Primavera 10 years ago. Since then, Oracle has made other notable acquisitions, such as Textura and Aconex, in addition to its notable organic growth.
Mike Sicilia has been along for the entire ride. He began with Primavera in 1993, working his way up through the ranks in programming, sales and consulting before assuming his current role of senior vice president and general manager.
Sicilia recently spoke with Construction Dive about Oracle’s presence in the con-tech space and what trends to keep an eye on as technology continues to transform the industry.
This interview has been edited for clarity and brevity.
INDUSTRY DIVE: Why did Oracle feel the need to be in the con-tech space?
MIKE SICILIA: The construction space is one of the few areas that's completely under-digitized. If you look at the amount of times we went into construction organizations replacing pen and paper or antiquated email/fax-type solutions with modern digital technologies, I think it's pretty unique. You don't find that at the same rate in other vertical industries. Construction is also an industry projected to grow at a rate that we don't see in other verticals. It is projected to grow faster than the world's GDP throughout the next 15 years. We see a tremendous opportunity to further digitize construction.
How is tech transforming the construction industry?
SICILIA: We think the digitization of construction is having a tremendous impact on productivity, which has been something that's been really difficult in the industry. As much as it's grown and is projected to grow, productivity rates are flat and declining. Worldwide competition for labor is the hardest it's ever been. Supply chains, especially in North American markets, are difficult right now. We think the digitization of manual processes will see a lot of return on investment.
This digital impact on construction is helping to increase productivity and I think that's key. Customers need to do more with the same labor force because the labor force is not growing. How do you get more done and meet worldwide demand for infrastructure? You have to do more with what you have.
As I look to the near-term future and long-term future, I think internet of things and blockchain makes tremendous sense. Construction is very complicated. A lot of things can go wrong in contracting and multiple payment environments, [especially when even the subcontractors have subcontractors]. The fact we can use technology adds a level of faith and security to the construction industry that is maybe not there today.
Will we see more tech integrations throughout the next few years?
SICILIA: It's quite likely. Here's why: There's more private equity and venture capital money in the con-tech startup space than there ever has been. As a result of that there are more startups, more products, more competitors and more choices for customers. One of the things that becomes quite frustrating to customers, particularly with the move to the cloud, is that they have to take care of all the integration themselves. I do think that there will be further cooperation among partners and vendors to make sure the systems are integrated out of the box or at least very easily integrated.
As an example of that, we are building our Innovation Lab right now in Deerfield, Illinois. Inside the lab, we show our Oracle systems working in a real-world project environment and also have a handful of partners to show how their systems are integrated, collectively working along with ours.
I think the integration piece is compelling. The challenge is you have so many startups and so many smaller companies in the industry today that obviously won't all survive. We'll have to see over the next few years what happens with some of these organizations. Certainly integration is becoming a more popular request from customers.
Cloud computing has become a broad term. How does Oracle view the cloud and what all falls under it in your definition?
SICILIA: We view it as four things.
Infrastructure as a service, meaning that your basic computer storage and all those things are part of the cloud.
On top of that you have an extension of the infrastructure that includes things like blockchain, IoT and analytics, for example.
The application layers that include Primavera, Aconex and Textura.
Finally you have data as a service — aggregate data across the entire spectrum or even the ability to aggregate data from other files.
I think today sometimes the word "cloud" is used interchangeably when we mean native cloud applications vs. hosting legacy applications. There's a difference.
In the native cloud application set, which is the one I outlined, everything is updated automatically and is dynamically available to customers. As new things are developed and released there isn't any upgrade or process to go through; you simply get to take advantage of those things, whether they're all the way down at the database security level, at the IoT registration level or whether it's a feature or function in the scheduling or it's a new analytic that's available in the data as a service.
In the hosting world, that means internal, on-premise applications will be hosted in the cloud, but they're not real cloud applications. They're applications that formally run on-premise and still have to go through upgrade cycles.
Contractors are at all ends of the technology spectrum. Some are using some of the most advanced tech available and some are only using rudimentary tools. What barriers do you see to adoption of tech for those who are more wary of it?
SICILIA: We are embracing all ends of the spectrum. For those that are wary to embrace technology, we have to make our tools work on multiple levels. It's quite feasible and quite possible that an iPhone or Android may be the only user interface some folks ever use on a job and they're running solutions totally on those. I don't envision that smaller general contractors and those who have been tech-wary will suddenly become technical revolutionaries and have an IT staff. We have to embrace the way folks work.
The short answer is we have to do it all. We have to do the big stuff and we have to do the small stuff. We have to have technology solutions that span the enterprise for the large GCs and have to have things that work dynamically, quickly and are very intuitive to use on devices.
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