Why Workspace-as-a-Service Needs a Global Distribution System (GDS)

Workspace Association of NY Annual Conference

Workspace Association of NY Annual Conference

1.3 Billion Mobile Workers

I’m sure you’ve seen that statistic before.  According to the International Data Corporation (IDC) , by 2015, the world’s mobile worker population will reach 1.3 billion, representing 37.2% of the total workforce.

I believe that’s a conservative number.

I could go on and list a ton of statistics from various research entities, such as the Telework Research Network & IDC, citing the growth of the U.S. and global telework and mobile workforce populations.  But if you’re reading this post my bet is you already agree the proliferation of mobile workers isn’t slowing down anytime soon.

The Nature of Work Is Changing

People used to retire after 30 years of working for the same company. They went to the office every day because that’s where their work was.

But today people work for numerous companies, or start their own, before reaching retirement age. We are no longer chained to our desks 40-50 hours per week. Technology has given us the freedom to work anywhere, anytime.  Work is what we do, not where we go. We’re shifting to a results-driven workforce from a clock-driven one.  Employees demand flexibility and quality of life. There is no longer a need for an expensive permanent office because today’s work is in the cloud, and on-demand.

The office will be too, and Workspace-as-a-Service (WaaS) will see rapid growth.

Image Source: Miguel de Arcos

Over the next 10 years workspace-as-a-service will become mainstream.  The economic downturn between December 2007 and June 2009 caused individuals, businesses and governments to tighten their budgets and look for ways to cut costs.  While the concept had been around for a while, the collaborative consumption economy began to take off as the world economy emerged from the recession.  New companies like ZipCarand Airbnb saw rapid growth as they chased an expanding market.

Today, although we are in economic recovery mode, budgets are still tight — something that will not change anytime soon, if ever.  Companies see collaborative consumption as a way to reduce costs, and technology has enabled a willing mobile workforce. Combine these three trends and you can see the future of commercial real estate.

The Future of Commercial Real Estate

The consumerization of commercial real estate is beginning indeed.  Tomorrow, every office building will support workspace-as-a-service (WaaS).  New WaaS operators will enter the market.  Building owners will seek out partnerships with operators.  Traditional commercial real estate firms will add the WaaS business model to their service lines, or partner with existing operators.  Supply will initially struggle to keep up with demand, but will catch up as commercial real estate adapts.

Corporate real estate departments will shift from managing the square feet in their portfolio to managing workspace reservations.  A new model of commercial real estate management services will emerge — one that is similar to corporate travel agents.

Over a billion people will work remotely and require professional workspace on-demand.  Millions of reservations will be made daily across the globe.

Satisfying Demand, On-Demand

Because work is what you do, not where you go, companies are no longer limited to recruiting the best talent in their geographic area.  Government agencies are implementing telework strategies.  Entrepreneurs are able to travel and stay productive.  Operators can no longer depend on local marketing to keep butts in the seats.  Exposure to a global audience will be necessary.

Before that can happen, inventory distribution infrastructure must be seamless.  There can be no room for human error and double bookings.  An automated reservation network is needed to process millions of reservations effectively.

Case Study:  The Consumerizaton of the Travel Industry

Let’s look at the travel industry as an example.  In the 60s, the major airlines created the first automated central reservation systems designed for use within the airlines’ own internal reservations centers.  They soon realized that deploying their systems in travel agencies would deliver accurate schedules, fares, availability, and booking capabilities instantly at the point of sale, thus extending the same efficiencies gained internally to the travel agency distribution channel.

By the mid 1980s, the technology systems had evolved into larger, more complex companies known as global distribution systems (GDS) that enabled travel agents to access and compare fares and schedules across multiple airlines and get real-time confirmation and availability for seats.  The hotels would soon follow.

The consumerization of travel began in the 90s when the airline and hotel GDSs connected to the internet, supporting a direct connection to consumers through various travel websites, thus creating a 24/7 online marketplace.

The GDSs have become central to travel distribution because they enable travel suppliers to reach an expansive global marketplace of millions of customers through thousands of distribution channels more efficiently than if they did it on their own. The GDSs distribute the products of thousands of suppliers to nearly half a million travel agents and millions of consumers almost instantaneously for shopping and booking.  In effect, the GDSs function as an efficient gateway to new points of sale. Travel suppliers do not need to open sales offices or invest in expensive technical infrastructures in each market to receive bookings from people all over the world.  Today, both large and small suppliers connect to the GDSs to compete for consumers across the globe who expect an efficient way to find and reserve travel.

Personal example:  In the 90s, I worked in the hotel industry.  We went through the pain of working with online travel agents that were not yet connected to the GDS.  When reservations were made on the online travel agent’s website, someone faxed (yes facsimile) the reservation details to us.  We then had to enter the reservation manually into our reservation system.  This ended up being a customer service disaster.  People would arrive that we had no record of.  We overbooked the hotel at times.  It was not efficient.  Once connected to the GDS, the process became seamless.  As a result, we increased the amount of bookings from this distribution channel.

GDS For WaaS

There are parallels between the travel industry and workspace-as-a-service.  Hospitality and customer service is what sets a brand apart from its competition.  Just like the airlines and hotels, many WaaS operators have their own internal reservation systems.  A global consumer market is ready to be connected to and can be satisfied by offering choice, transparency and most importantly, automation.  It’s like the 1990s all over again!

To fully realize the consumerization of workspace, the inventory distribution infrastructure must be seamless and automated.  I shouldn’t have to make multiple phone calls to check rates and availability at various locations to book a meeting space.  An entrepreneur should be able to fire up his smart-phone to quickly find a place to touchdown in between meetings.  A corporate executive traveling from Washington, D.C. to Chicago should be able to book her flight, hotel room, rental car, and on-demand office all from the same place.  Tomorrow’s corporate real estate department should be able to manage the company’s external hoteling needs effectively.

Our industry faces a great challenge to keep up with the demands of the changing workforce.  Within every challenge there is opportunity.  WaaS operators have been on the cutting edge of technology for decades.  We can meet this challenge together and build something great, or we can let technology leave us behind.

I believe a Global Distribution System for Workspace-as-a-Service is how we meet this demand.