Nemetschek become majority shareholders of Graphisoft

It would appear that the people at Nemetschek were busy over the Christmas holiday purchasing the majority of Graphisoft's shares. Nemetschek Vectorworks and Graphisoft ArchiCAD are two highly respected CAD/BIM packages that form a significant portion of the CAD marketplace (behind industry leaders AutoDesk and Bentley). At the end of December Nemetschek purchased all the privately held shares of Graphisoft and sometime during January they aim to capture the remainder which are publically held. The intital deal involved 5.7 million shares valued at 51.8 million Euros (approximately NZ$98 million). This purchase turns Nemetschek into a very serious AEC software vendor with a user-base of around 270,000 people.

What this means for the two competing CAD products is difficult to say. Vectorworks is very strong in the two-dimensional arena whilst ArchiCAD has a very mature 3-dimensional Building Information Model (BIM) core. It would be difficult for Nemetschek to continue marketing both products head to head considering the competition within the Architecture, Engineering and Construction space. It is also dubious whether the underlying software architectures are similar enough to warrant some kind of software merger considering both have a long development history. Given that it is unlikely that one of the products will be phased out (due to their entrenched users and functionality), a more likely scenario will see Vectorworks focus on the traditional 2D marketplace whilst ArchiCAD will continue to pursue BIM ideals at the expense of pure-2D functionality. This is the strategy employed by AutoDesk with their AutoCAD and Revit platforms and it seems to be working quite well for them. But unlike AutoDesk there is significantly greater functionality and ideology cross-over between Nemetschek's products which may prove harder to resolve internally in terms of where the two sit in the market and relate to each other.

Hopefully once the buyout is complete the long-term future for both entities will become a little more clearer. From a spectators position it certainly wouldn't be interesting to spend almost NZ$200 million and just maintain the status quo, but it may make the most business sense so I wouldn't be surprised if nothing exciting happens immediately.