An Interview with Sean Flaherty, CEO of Nemetschek NA (VectorWorks)

Sean Flaherty is the CEO of Nemetschek North America, the American branch of Nemetschek AG, the German company that is well known worldwide for products like VectorWorks and Allplan. Novedge has been a VectorWorks' reseller in the United States for a few years. The recent acquisition of Graphisoft by Nemetschek was a great opportunity to contact Sean. I invited Sean to participate in the following interview:

Can you tell us a bit about yourself and your company?
Nemetschek North America (based in Maryland) is a wholly-owned subsidiary of Nemetschek AG, a German technology company. Our division is in charge of the development and sales of the VectorWorks family of products worldwide. We were founded as Diehl Graphsoft in 1985, so we have a long history of CAD development, and it has always been our primary mission. The VectorWorks product line is sold broadly around the world. Our biggest markets are Japan, the US, the UK and Germany. Our top customer markets are architecture, landscape design and TV, movie and theater lighting design, as well as scene and set design. But we have a large contingent of customers in a few big sub-markets, such as exhibit design, interior design and mechanical drafting.
I joined the company in 1985 as employee #2 to expand our development team. Since then, I've worked in variety of development and product management roles until taking over as CEO in 2005 when our founder, Richard Diehl, retired.

What changes can Americans expect from Nemetschek after the recent acquisition of Graphisoft?
In the near-term, you can expect very few changes. Nemetschek has a history of acquiring companies and allowing them to compete freely in the marketplace, much as they did when they acquired us (formerly Diehl Graphsoft) in 2000. Longer-term, we're talking with the marketing team at Graphisoft US to see how we might position our products together in the US.
Where our products overlap in architectural design, our products take very different approaches to fulfilling customer requirements and solving customer challenges. I think we can find a way to communicate this to the customer in a positive fashion and focus our competitive efforts outside the company.

Excluding the price factor, why should an architect select VectorWorks over one of the many competitors?

free-form modeling is becoming increasingly important to architects

Free-form modeling is becoming increasingly important to architects as construction techniques advance and architects shift to conceptualization in 3D. VectorWorks Architect has some of the most advanced 3D solids and surface modeling capabilities available among architectural products. We also continue to invest heavily in 2D document quality, as this type of work is our customers' "bread and butter" — even at a time when talking about 2D is considered passe. Quality of line work, integration of raster pictures and illustration effects are some of the reasons our customers consider VectorWorks the best document production tool on the market.
These capabilities are exposed in a very flexible manner. Our product mission is focused on the design phase in multiple disciplines, so we provide a solution that is horizontally integrated across all aspects of a building's design process. Architects are called on to design many different things in addition to the traditional structure — and, with VectorWorks, they only need to learn one product.  Site development, landscaping, furniture design and lighting design are all part of the VectorWorks capabilities list.

What is the Nemetschek approach to BIM (Building Information Modeling), and how is that approach different from that of your competitors?
Nemetschek has a wide variety of BIM applications, but I'll focus on VectorWorks Architect here.  For years, we've concentrated on adding intelligence to drawings without interfering with the design process. Much of the BIM technology I see focuses on extremely large projects and on construction needs, with little discussion about the effect this has on design. VectorWorks Architect allows customers to add intelligence in a scalable way by allowing the user to attach non-graphic data to any object — 2D, 3D, smart or just lines. This simple feature puts much more intelligence into the drawing. I think before architects start doing energy simulation, simple automation of tasks like window schedules, quantity take-offs, etc., should be routine in the industry.
I don't think this type of information requires a completely new design approach or a revolution in the architectural process, as some of our competitors state. I see an evolutionary change requiring data to be generated and managed electronically, and a steady reduction in the importance of paper documents as the preferred manner of passing information between phases in the architectural process. VectorWorks Architect provides a way for customers to scale their current working methodology to these newer demands without having to reinvent their working practices.

The average size of AEC (Architecture, Engineering and Construction) companies is significantly smaller than the corresponding manufacturing companies. Do you see this as an opportunity or as a limitation for your company?
Of course, we see the AEC market as big opportunity for Nemetschek. The size of the firm has a big effect on sales and service strategy particularly, but, by competing in the market for so many years, we've already adapted. The biggest difference between selling to large and small customers that we've seen is that large customers demand a much more turn-key experience with new products. This often means that they will spend much more on the initial purchase for training and customization than on the software licenses themselves. When focusing on smaller AEC customers, our value pricing and inexpensive training options become a big advantage.

Nemetschek tried to enter the mechanical design market without being able to replicate the success it had achieved in the architectural design field. Will we see more activity in mechanical design or will Nemetschek focus on its strongholds in the AEC market?
I think it takes many years to build a presence in a new market, and we continue to evaluate how to make VectorWorks Machine Design a stronger player. There was much less crossover with the general CAD market than we were expecting, so we've had to build from virtually no name recognition.
The mechanical CAD market is also incredibly specialized, so our recent name change from VectorWorks Mechanical to VectorWorks Machine Design is an attempt to better define the mission of our entry. I think our technology is well suited for these customers, so I mainly see a marketing challenge to get our message out to the target customers more effectively.

When people talk about Microsoft Office they say that 80% of users use only 20% of the features. Do you feel the same about VectorWorks?

the more advanced capabilities of a product the customer uses, the happier they'll be

Probably not to the same extent, but, yes, I think there is often much more power in the product than the customer users on a regular basis. I believe that the more advanced capabilities of a product the customer uses, the happier they'll be in the long term. Not only will they be "getting their money's worth," but they'll also likely be using some of the features that differentiate VectorWorks from our competitors. I think this gives them a competitive advantage by using a tool that maybe their colleague across town doesn't have. This is why we've got a big push right now on more accessible training.
We've just launched a series of training webinars aimed at expert users who want to get more out of their VectorWorks investment. Previously, our training has been focused on getting new customers trained–training which wasn't useful for people who have been using the product for several years.

I would like to thank Sean Flaherty for taking the time to speak with me today. All VectorWorks products mentioned in this interview are available online from the Novedge website. If you have any questions for Sean or for Novedge, just leave a comment below, and we will be glad to answer.

Franco Folini