Smart Buildings

Hybrid Work: Driving the Workplace Technology Market!

Here is the recording and presentation from our live stream last Friday, discussing the impact of hybrid work practices on commercial real estate and how it is driving growth in the workplace technology market.

We discussed how growth is being driven by businesses exploring reconfigured solutions for hybrid work spaces and an emphasis on real-time occupancy data to inform future space requirements. We also talked about how the competitive landscape remains diverse and potentially confusing for buyers, with numerous vendors offering both point solutions and platforms.

Don’t forget you can now Subscribe to ALL our video content via our YouTube channel, The Smart Building Series.

Live Stream: How Hybrid Work is Driving the Workplace Technology Market!

Transcript of ‘Hybrid Work: Driving the Workplace Technology Market!’

Welcome to our live stream for September hope everyone’s doing well out there it’s Friday afternoon here in Stockholm so yeah I hope everyone is looking forward to the weekend.

before we get there let’s have a talk about hybrid work and the main part of this discussion today about how this you know phenomenon of hybrid work is driving the workplace technology Market so I’m just going to wait and so make make sure we get as many people in before I start the presentation so we’ll do a little bit of housekeeping first.

we’d be really interested to hear people’s thoughts on hybrid work any questions you have for me and so on some of the research that I’m going to show so you should be able to put those in the comments section on the LinkedIn page and I’ll be able to read those in in a few
minutes so we’re probably going to take about 15 minutes to do the presentation maybe 20 and then after that we can do a bit of q a what else can I say yeah of course we’re recording this as well so it will be up on LinkedIn and we’re going to put it on our YouTube channel as well so if you want to share it with your colleagues that would be awesome please do so let’s get started

what I’m going to present today is sort of a combination of some of the work that I’ve noticed from from other research companies but also of course from our own research and these are the two most recent reports we’ve done looking at workplace technology so the first one occupancy analytics and inbuilding services we did a complete Market survey of the vendors in that space and then also the global market for workplace experience apps again you know a fully updated market review of the size and structure of of the market for that type of Technology so yeah you can find more information on our website about that

so anyone who’s interested in sort of understanding about occupancy I definitely recommend that you keep an eye on the free space index this is they’re putting together anonymized data from over a hundred thousand occupancy sensors in different offices around the world and they produce a monthly report on how that’s looking so actually in August this year 29 of global average occupancy across their senses so okay that might be skewed slightly you know in terms of like the month August a lot of people away but still it’s actually 79 of offices that are returning to work that’s there that’s what they’ve calculated and that figure is nine percent more compared to August last year which I suppose you would make sense right as we were coming out of the pandemic a year ago

I think you know what I take away from this is you know occupancy is still a challenge of course you know we can see that that’s that hybrid work and remote working is really is definitely having an impact on occupancy in in office space so as I’ve written here

I think there are definitely as we all know challenges in the commercial real estate market but of course on the flip side of that there are opportunities opportunities from a technology perspective right and you know I’ve heard this phrase quite a lot where they talk about flight to Quality you know so okay we’re gonna we’re gonna use less office space but that office space which is of a a very high end will be the well you know will still be rented out will still be at a premi that people want to use and you know I think that’s that’s one of the key messages that that I think people should understand about the office sector going forward

another challenge for commercial real estate I think is this this impact of regulations and building legislation another interesting report that I think and we’ve written about this on our website the Siemens Financial Services did some modeling and they think that it’s 93 billion pounds worth of commercial property in the UK is at risk of becoming stranded assets so what do they mean by that well it’s to do with the latest update to what they called minim energy performance standards in commercial real estate and that they have to it’s going to have to have an energy performance certificate rating of at least E to be rented out

of course it can’t be rented out there’s no income coming in and even the government is suggesting that around 11.4 of existing commercial buildings in the UK would currently fail to meet that standard and that’s I guess where they’re getting that 93 billion figure from so there’s some definitely some you know an issue I think to deal with there and again with these challenges coming with hybrid work I think it’s going to be hard to manage those things as well at the same time now that figure they do say of course does depend on on building type and region okay

so you know looking at our work in workplace technology we’ve seen growth being driven by businesses exploring reconfigured solutions for hybrid workspace of course you know everyone’s  trying to manage this you know how people are coming into the office when they should  be coming in and and you know around sort of the impact on teams and things like that  I think obviously what we can what we can all say is that hybrid work is at least in the medi term  is very much here to stay and companies need to manage that process right

they need data to manage it you can’t manage what you don’t measure so occupancy data is increasingly important and we’re definitely seeing that drive market for occupancy analytic analytics and workplace experience so you can see my second point there you know from the work that we did earlier this year if we combine the markets for occupancy and workplace experience we think they’re going to reach a combined value of over 8.7 billion by 2028 so growing at around 13 to 14 over the next few years what we’re also seeing is that workplace experience platforms are increasingly being added to and expanded to the address the needs of not just tenants but also employees and you know this is this is really important

I think what what people want more and more is a unified platform they want to employers and people who rent buildings out want to make the workplace more sticky for both tenants and employees and technology is really an enabler for that so I think there’s some it’s good news you know for for workplace experience technology there’s a lot of opportunities to expand and be useful right we often talk about this convergence of people place and Technology at that being workplace experience now what do you think I guess is the the biggest component of this triphate you know in my opinion it’s people right that’s what we’re that’s what we’re trying to do here we’re trying to really ultimately do things like Talent retention improve employee experience improve productivity engage people better and it’s technology that is the the enabler to that

so you know I’ve recently read a book where they talk about culture culture trumping everything now environment changes our biology and you know our Behavior so think about you know when let’s say someone who’s normally loud or whatever might walk into a library they lower their voice they it’s not their biology or their personality that’s changing it’s they’re responding to more appropriately to that kind of cultural expectation that’s placed on them

and you know I think you can draw out that analogy into the workplace again like a non-related  anecdote but I always think of something like CrossFit right having a really strong culture why is that you know it’s not it’s almost like the the anti-gym isn’t it like you know they’ve created these spaces that are deliberately like not refined  it’s it’s really about like it’s it’s so much about culture it’s about having this shared experience with like-minded people who you know have sort of don’t want to be associated with that more refined image of the gym they want to you know actually be more about you know lifting weights and like they don’t they don’t want to care about them the environment in the sense that you know they it’s not important it’s about the workout and I think those are important things to think about when you know you’re creating your your workplace as a company you know it’s very much an extension of your culture and the culture that you want to and and Vibe people with right

So to that end you know every company is different every company has has use cases that may want to achieve and you can see here like we did this a few years ago but it’s a mapping of some of the some of the different use cases that we can use workplace experience for and we split them into four areas and you know I’ll we can share this up these slides will be up online for everyone to look at you know around  personalizing workspace communicating finding things all things that can benefit the the employee because at the end of the day and I think this is really important is that technology is a means to an end not the end in itself right it’s it’s a tool for us to use to create the environment that we want the culture that we want within within our workplaces

so just to finish I’ve got a couple of slides on how I see the the vendor landscape it definitely remains a bit confusing for buyers there’s a lot of it’s quite diverse and I think  you know from someone they’re looking at some of the statistics  there’s about 58 of those companies that we’ve that we’ve identified that were formed in the last decade and that’s around 121 I think in total and it does indicate that you know this is sort of a fairly low barrier to entry business and you know there’s been a lot of disruptive influences from software as a service analytics the internet of things all of those things are combined  to create this sort of like very diverse and landscape

but again from the buyer perspective it’s not always ideal right like they want to be able to Benchmark and compare and understand who can provide the service and the use case and deliver on the use cases that they want  so we need to I think collectively do some work on that yeah and I think you know these are some of the workplace management occupancy analytics companies that we’ve identified as part of our research it’s not it’s not like you know everybody but some of them what can I say I mean there’s definitely also been an uptake an uptick in workplace technology deals recently I think in in 2022 we we saw quite a lot of consolidation in this space

and you know that’s going to continue in in our opinion for the next few years so yeah I mean our report are specifically our occupancy report identified 151 Acquisitions in the sector in the past six years and actually that Trend kind of aligns quite well with something like the broader M&A activity we’ve observed in the smart building space and in the proptech space so I think there’s been quite a lot of talk about you know propTech in in the prop Tech smart building space perhaps there’s been sort of and actually in VC in general right less deals being done and yeah I think from what we’ve seen so far in 2023 that’s definitely the case but but there’s still activity out there there’s still  deals being done and money being raised just I guess you will if you’re expecting to raise  then you’re going to have to have a solid business case

so would be happy to take people’s questions now or indeed like comments anything you want to add  something I’ve missed something I’ve got wrong please make a comment we can cover that stuff now and then just also to say you know if you like what you hear and you want more information about what we do and you know look at our more of our research you can subscribe so if you go to subscription you can sign up and we publishing research content and research notes all the time so there’s plenty of content for you to conse we also have a Weekly Newsletter as well so you can sign up on our on our home page to to receive that every Wednesday morning

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