The new race to sell office software

The Big Story

The smart(er) office of the future

When sweeping lockdowns began in March 2020, speculation was rampant about the future of the office. Now, as some of the less dire predictions come to fruition, there's a new software battlefield emerging.

Businesses can finally begin to think about reopening their headquarters on a more permanent basis now that the global vaccine effort is underway. And many are turning to the real estate giant JLL for help. The company operates hundreds of commercial offices around the globe, many with rising vacancy rates as enterprises rethink their physical footprint, and it estimates that 50% of workers will be back in the office by September. While plans will vary, one factor appears to be consistent across clients: the need for new (or at least improved) technology.

• "The pandemic has accelerated technological disruption in the commercial real estate industry," JLL CEO Christian Ulbrich said on an earnings call in November. And "investments in our technology platform have proven to be a strong differentiator."
• Among those investments was JLL Jet, a workplace application developed by JLL Technologies which allows employees to reserve desks and building operators to communicate with tenants through push notifications, among other features. The company declined to say how many users it currently has.
• And portfolio company VergeSense uses sensors to measure stats like conference room usage and employee movement, which can help reveal adherence to new safety protocols or inform new floor designs. JLL is using the tool in several of its own offices.
• Future products are likely to include online marketplaces for services or facilities management, per JLL Technologies Chief Product Officer Sharad Rastogi.

Many of the traditional IT vendors also sense an opportunity in providing software for the offices of the near future.

• If you ask Rastogi, the runway for tech transformation within one of the world's largest asset classes is massive, particularly since real estate has lagged well beyond other industries in digitizing its operations.
• Salesforce released Work.com, its office management application that serves a similar function as JLL Jet, in 2020. ServiceNow is also offering a suite of related products.
• And Honeywell teamed up with SAP on a new offering to help property owners cut costs through more efficient operations, like improved energy efficiency.

"It's become the new shiny object today," said JLL Technologies co-CEO Mihir Shah. "Anytime there's a new hot thing … you're going to get people that quickly pivot to take advantage of the opportunity and maybe they don't understand the depth of the pain points."

• Still, Shah senses his own opportunity there, too: He doesn't "see any reason" why JLL can't partner with providers like Salesforce and Workday to help distribute their software.
• In comparison to those vendors, JLL Technologies is still relatively new; it was launched in September 2019. Along with Rastogi, a former exec at Dell Technologies, it brought on Eric Wittman as chief revenue officer, among the slate of other leadership hires.
• JLL, however, has the advantage of being one of the world's top commercial real estate managers, with a broad customer base of building operators and investors.
• "There's a lot of aspects, if you look at this app as a platform, that we build ourselves, that we have a great field of expertise in," Shah said. "It'll be harder for people coming from horizontal software companies to compete."

The emerging battlefield in real estate is yet another example of how big data is here to stay. Whether those advancements actually provide tangible benefit in the new hybrid-work world is still an open question.

— Joe Williams

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Coming Up This Week

Another big week of earnings, posing a possible test of whether the war between Wall Street and retail investors could have broader implications for the equity markets:

Feb. 1: Zoom Chief Information Officer Harry Moseley, Google Chief Privacy Officer Keith Enright and others speak at The Economist's "Innovation@Work" conference.

Feb. 2: Google, Amazon and Alibaba report earnings. Slack co-founder and CTO Cal Henderson and others speak at The Economist's event.

Feb. 3: Qualcomm reports earnings. The Economist hosts Microsoft Vice President Jared Spataro and others.

Feb. 4: Former Google CEO Eric Schmidt, former Yahoo CEO Marissa Mayer and others speak at The Information's "Future of Startups" conference.

In Other News

• Microsoft Office 365 is the most popular work application: at least, according to Okta, which every year reports out on the top applications accessed via its authentication system.
• And Amazon Business is the fastest-growing app, per the same Okta study.
• SolarWinds wasn't the only source of the recent hack. Roughly 30% of the victims had no connection to the company.
• Workday acquired Peakon, the employee sentiment-tracking company, for $700 million.
• SoftBank is planning to pour $100 million into the burgeoning Miami tech scene.
• How Deloitte spent $44 billion to build a vaccine database that is now a "cuss word" among state officials.
• WorkBoard bolstered its board of directors, adding former Ancestry.com CEO Margo Georgiadis and former Deloitte vice chairman Cathy Benko.