Space As A Service – but bigger than that.
I first started talking and writing about #SpaceAsAService several years ago: Duke Long
and I have 'debates' about who got there first! Either way it is gratifying that today the
phrase is commonplace and barely a day goes past where it doesn't crop up somewhere
What isn't commonly understood is that this is the single biggest flashing red sign that
#PropTech is at a watershed moment. #SpaceAsAService is only an everyday term
because technology, in the widest sense, is fundamentally transforming the real estate
industry. As Sundar Pichai, CEO of Google said recently, we are now in an 'AI First' world.
And this matters hugely to everyone in Real Estate.
In our industry what really matters, above all else, is what our customers want and need
to do within the spaces and places we create. Everyone has a 'job to be done' and it is
that that AI and other technologies is fundamentally changing. The bottom line is that
anything 'Structured, Repeatable or Predictable' will be automated. Not might be, will be.
The incentive to do so is too great to be ignored: regardless of whether that suits us as
In early 2017 McKinsey wrote: “Overall, we estimate that 49 percent of the activities that
people are paid to do in the global economy have the potential to be automated by
adapting currently demonstrated technology.” And in July 17, in a report, published by the
RICS no less, it was stated “Surveying appears to be an industry in which 88% of the
core tasks are ripe for automation to a greater or lesser degree.” In this world the
purpose, function and form of the spaces we create, as an industry, has to change. And
that is why PropTech and #SpaceAsAService is at a watershed moment: the days of
digitising the past are over. Either the industry embraces the ethos of #SpaceAsAService
and leverages an emerging breed of #PropTech to catalyse this change, or we'll all suffer
the waves of destruction that follow losing 'Product/Market' fit.
#SpaceAsAService is a deceptive phrase; it is often used simply as a proxy for space that
is available on demand, but it embraces far more than that. It is a actually a philosophy of
space, a foundational way of thinking about the spaces and places we create, manage
and occupy. It represents an attitude of mind, towards colleagues, clients and suppliers
and between 'landlord and tenant'. It is about thinking about Service not Product, long
not short term. About networks, ecosystems and lifetime relationships with customers. In
many ways it is the antithesis of the traditional real estate mindset.
Ant therein lies the problem, for the industry. To become a true #SpaceAsAService
operator incumbents need to be transformed; organisationally, culturally and financially. A
#SpaceAsAService real estate company needs to think like Apple does, who despite only
having a 17% share of the smartphone market make 85% of all the profits. Why?
Because they have embraced Steve Jobs' mantra of marrying technology with the liberal
arts, of controlling both hardware and software, and thus being able to create a uniquely
desirable user experience, which their customers are prepared to pay uniquely high
margins to acquire.
As with the iPhone I do not think #SpaceAsAService will be for everyone. Make no
mistake about it, the iPhone is designed, branded and managed for a specific target
audience. It is globally the smartphone for the upper end of the market, and everything
Apple do is predicated on that market positioning. Within real estate I believe
#SpaceAsAService will not be as 'tribal' as Apple is, but it will be for the most creative,
innovative, progressive and knowledge based companies.
It will be for companies that invest in their 'people', respect their skills and want to
provide them with 'Space' that serves them up what they need, when and where they
need it. Space that understands who they are, what they need and desire, and how to
help them become as productive as they possibly can be. It will be for companies that are
prepared to invest to make this possible, but who also understand that, like software, a
workplace is always but a work in progress. It will be for landlords that can breach the
tenant demise and instead of simply providing a functional shell for their occupiers to
occupy as they wish, partner with them to provide a range of very domain specific skills
that enable them together to create exceptional workplaces.
Space needs to become #AsAService because in a world where the 'structured,
repeatable and predictable' is taken care of by technology, creating a flexible, agile,
activity based workplace is significantly more complicated than it used to be. The largest
occupiers may have all the skills and resources to create these spaces but most
companies do not, and cannot be expected to acquire them.
These companies are not after an office, they are after a productive workforce, and a true
#SpaceAsAService operator (be it Landlord, 3rd party or partner) could be their route to
achieving just that.