The earth is shifting under commercial real estate (CRE) these days. Indeed, the coronavirus pandemic turns out to be the Big One for them. The CRE community, including the vendors that serve them, is on a steep learning curve to keep their businesses, and their tenants’ businesses, alive. I like learning – and change and disruption – so long as it does not take too big a bite out of my livelihood or personal equity. This learning curve has my full attention.
Two of the startups I work with bring compelling value propositions to IT environments in commercial offices. Karl May, with whom I have worked and learned from for 20 years, runs a company called Join Digital that provides building owners (including enterprises as well as commercial real estate (CRE) companies), landlords, and tenants with turnkey LAN, WAN, IT, and analytics capabilities. Shankar Mukherjee, whose companies I have advised for almost as long, runs Dhaani Systems (“dhaani” meaning “green” in Hindi), which uses machine learning to save up to 80% of the energy in PCs (especially desktop PCs) and other IT gear, no device client required. Dhaani’s primary customers are government agencies (in the U.S.) and large software houses (in India). For both Join and Dhaani (and countless other companies), most, if not all, their value accrues when people are working in offices. But who is working in an office now?
Going to Work – What?
When I began my career at IBM and worked in an office (in a three-piece suit – good grief), most of my interactions were with people in my office and were essential to my getting my work done. Plus, the office provided a social setting, though rarely one from which my closest personal friends emerged (as it had during graduate school). Over the years, my interactions spread beyond my immediate office to others in the same company and eventually to other companies. But the office was always a place to brainstorm, hear what others were up to, and express a corporate culture.
I have not had an office to go to since late 2016, so I am no stranger to working from home. And like many of you, I have traveled a lot and done my share of working from airports, hotels, and motor vehicles. But the quarantine has changed how I work, even from home, and Karl and Shankar are causing me to think about that.
Earlier in my career, I designed network protocols, which was pretty solitary, though it required gathering requirements from users and constraints from implementers. When I moved to standardize these protocols, I needed to travel to meet other contributors, listen to them at length, and build trust through consideration and compromise. And collective industry decisions, such as those for networking standards, required physical attendance at designated meetings. In my early years in management, I relied on face-to-face meetings with individuals and groups to assess the feelings behind the words and to hash out conflicting viewpoints, but much of my work was paperwork and, therefore, solitary. As globalization broadened my horizons, I, like many others, learned to exploit telephone calls and videoconferences to help me make decisions, and less and less of my time was spent heads down alone.
Immediately before the pandemic, three distinct activities dominated my at-home workday:
- solitary, creative activities like writing position papers and emails and creating presentations.
- remote conversations with others (more by audio conference than video).
- in-person local meetings (anchored by coffee).
Plus, about a third of my year was spent in other cities at conferences and smaller meetings, where I directly engaged with others. (In the absence of these engagements, one of the things I do instead is write blog posts like this.) Now I am exploring the future of work from both Join Digital’s and Dhaani’s perspectives.
Going to Work – Where?
Karl and Join Digital enable customers to offer secure, high-speed networking as a utility like they do with power, lighting, and HVAC. Smaller companies have moved quickly toward cloud-based applications, so they don’t need on-premises data centers. Large enterprises have likewise been moving (at non-uniform speeds) to cloudify their businesses and reduce in-house IT. But they have also latched onto a new phenomenon: getting out of the real-estate business. To this end, they sell their buildings to CRE companies and sign leasebacks. This buys them greater business agility, especially with shorter leases.
Many of Dhaani’s customers rely on centralized teams working at desktop computers, and energy has become a highly-managed cost. Consequently, they exploit increasingly individualized, software-based regimens regarding work hours and locations to reduce electricity consumption, especially when diesel generators augment grid power that is often not reliable. Those organizations are quite traditional, and working from home has not been an option because the machines are not portable, conditions at home are not amenable to working, and information security protects only the office. Some of the individualized, software-based regimens for saving energy can also be applied to health and wellness practices in the office.
What About the Pandemic?
Alas, the pandemic has emptied most office buildings. Tenants struggle with rent payments, and many workers revel in not having to endure long commutes. Building owners who until recently enjoyed occupancy rates over 90% in popular locales and hardly had to compete on amenities suddenly face a nasty choice: invest in empty buildings or write off immensely expensive assets. Advances in IT are giving them tempting reasons to invest.
Sure, a landlord can offer great Internet and cloud access, maybe even better than their competitors. But IT now pervades OT (operational technology in buildings) in two critical ways. First, it enables owners to quantitatively manage the entire lifecycle of the building (buy, develop, improve, operate, sell) to optimize utilization and minimize expense (energy being but one of many categories of expense). Second, it provides the framework for safely bringing people back to work. From visitor management, space assignment, and proximity sensing to movement tracking, contact tracing, and security audits, innovations in data sensing, collection, and analytics have become the essential tools for creating smart and safe buildings.
In following hasty developments in CRE, I have pretty quickly concluded that it is far easier for a modern networking company to add sensors and analytics than it is for a BMS (building management systems) company to add networking and software capabilities. Indeed, as enterprises transition from concentrated facilities in high-cost areas to more distributed facilities with suburban locations, distributed networking with cloud-based management of both IT and OT throws a life raft to enterprises and CRE landlords, and this is what aggressive startups are now doing.
The Troubling Question
Karl May, Shankar Mukherjee, and others offer impressive capabilities for bringing people back to the office to work in a healthy fashion. But many of the provisions for safety – distanced workspaces, vertical barriers, one-way paths, no common eating areas, and general sparseness – inhibit the very interactions that make working in a shared office beneficial. Karl and Shankar have not taught me how to solve this yet, but I’m sure they will.