The office is a continuously evolving space. Over past decades we have seen the slow transition of layout from cubicles to open plan and of design from formal to comfortable, as well as the rise of health and wellbeing features. We have also seen a steady increase in the amount of technology in offices, with the emergence of computers and printers, security and surveillance, HVAC and improved lighting. In the last decade, workplaces began to chase the smart building dream, where all these systems could be joined together to create unprecedented efficiency and limitless new applications. Then, there was COVID, which disrupted the commercial building landscape and set a new and accelerated course for digital workplace evolution.

“The digital workplace sector is a rapidly evolving market opportunity within commercial real estate. The market is in the early stages of maturity, having seen considerable activity over the past two years accelerated by the COVID-19 pandemic. Companies need new ways to deliver an environment in the post-pandemic era that the modern workforce demands,” reads our latest report. “Workplace experience platforms and occupancy analytics solutions will prove a pivotal fixture in the future of ‘connected’ real estate and the workplace at large. With many occupiers exploring options to downsize offices or move to hybrid working, a growing number of landlords will be eager to tap into the opportunity for a more digitized workplace experience.”

Our new workplace research study forecasts that the digital workplace market will grow rapidly at 20% per year between 2021 and 2026, rising from $3.70 billion in 2021, to $9.21 billion in just five years. Due to the continued challenges of COVID, market growth will be largely driven by cost-control measures such as space rationalization and reconfigured solutions to help create safe and hybrid workspaces for the pandemic era. There will be a renewed emphasis on healthy buildings as a tool to mitigate virus transmission, make returning workers more comfortable, and attract increasingly health conscious talent. The technology required for the adoption of these pandemic driven applications then provides a platform for the acceleration of a wide range of occupant-centric solutions.

“Solutions to ensure the most efficient use of space in office buildings have been available for many years, but with the advent of IoT-driven real-time occupancy and location analytics, combined with the focus on workplace experience and the COVID-19 pandemic, digital workplace platforms have evolved to support more accurate insights into the critical context of where, revealing previously hidden patterns into the actual use of space and enabling improvements in the location-based experiences of building occupants,” the report states. “These platforms are important tools for commercial real estate providers, as working styles change, hybrid working models and flexible offices increase in number and the workplace needs to retain talent and attract a multi-generational workforce.”

Digital workplace growth trends are not solely due to the pandemic and current growth would not have been possible without the availability of solutions. All this workplace technology was ready and looking for a way into the market, the barriers to entry were slowly being eroded, successful deployments were already demonstrating use cases for all building types to grow confidence in smart building technologies. The pandemic then suddenly made specific demands of the workplace —social distancing, mask wearing, contact tracing, remote work, occupancy control, and extra cleaning— and various smart building technologies were presented with an opportunity to skip barriers and adapt their solutions to the new needs of the market.

“During the pandemic, every industry and almost every building has been impacted, many workplaces have not seen a full complement of staff since March 2020. After the initial attention on remote work, enterprises are now focused on how to get their employees back safely, comfortably, and productively, which is creating more interest in the occupancy analytics market. We have moved from ‘how to get the best out of your building’ to ‘how to get the best out of your building at 30%, 50%, or 75% occupancy,” continues the report. “Many companies have pivoted or rebranded their offering to target flexible and hybrid work practices, which now appear to be the dominant approach for enterprises.”

Major growth barriers persist, however, such as the continued disconnect between landlords and commercial occupiers, the high implementation costs of solutions, and the capability to demonstrate tangible ROI for many use cases. Despite the obvious advantages of data gathering and surveillance for virus mitigation efforts, privacy and data security remains a major barrier in Western markets. Significant implications in terms of consent and personal data privacy as well as confusion and suspicion over the variety of smart technologies, vendors, and solutions will also hold the market back. Customer confusion still reigns in general in the market, exacerbated by the lack of uniform solutions for the very diverse buildings market.

“Navigating through the wealth of use cases in the smart building landscape is not easy. Although technology is evolving rapidly and offers a vast number of smart building solutions, there is no one path on how to transform an office into a more human-focused building. There is no predefined sequence of measures to be taken. The only right way is an individual customized approach, following a process of evaluation and prioritizing one's own use cases,” explains the report. “Use cases must be the starting point of any technology project in people-centric office buildings because they substantiate the need for investment and budgets and ensure that an outcome- driven solution is the focus.”

Despite persistent challenges, the pandemic has reshaped the digital workplace market by removing certain barriers and driving certain solutions, and this focused market penetration should then open the door to the wider workplace and smart building technology spectrum. During the pandemic, occupancy levels will have to be measured one way or another, many buildings will take the opportunity to use a monitoring system that also directs cleaning schedules, tracks contact between, recognises social distancing or mask wearing issues, and promises many more benefits. COVID has knocked the market in a new direction and given it new momentum, it is now up to the industry to overcome remaining barriers and seize the new growth opportunities.