Smart buildings: the human deficit

EG’s resident tech columnist Antony Slumbers takes a look into whether real estate is really ready for smart buildings and how London’s proliferation of multi-tenanted buildings require a different outlook How many times have you heard property people say that property is a people business? Hundreds of times I imagine. Now, how many times have you heard them say that smart buildings are about people? Never, I suspect. No-one in property ever says smart buildings are about people because the property industry understands hardware but does not understand software. It understands products but does not understand services. And that leads to the great, glaring human deficit when it comes to smart buildings. It is very telling that whenever smart buildings are discussed it is always The Edge building in Amsterdam that is used as the exemplar, even though that building was finished over two years ago. In the intervening two years we have all heard a lot about smart buildings, it’s just that there don’t seem to be any, apart from The Edge. So what is going on? With so much hype, why aren’t the dozens of prime office buildings completed in the last two years showcasing just how smart they are? Because they are not. The second telling feature of The Edge is that it is occupied and was built in collaboration with a single occupier. And therein lies the dirty little secret about smart buildings. Without the deep technical and human awareness of and involvement with the occupiers of a building, it is not going to be truly smart. What is smart? A Google search defines a smart building as a property that “connects information in an open format, allowing for the development of new applications that save time, energy, and operating costs”. It does go on to mention people and technology, but only in the sense that the people that run a smart building are a crucial component of its intelligence. The definition is fine, but thought of like this, there is nothing smart going on. All we are talking about is buildings with modern, up-to-date systems that can all talk to each other. That is, and should be, table stakes for any new building. Just like any new car is likely to have satnav, cruise control and air conditioning, having a building that uses modern technology is not a big deal, or a competitive advantage. The problem with the way the industry looks at smart buildings is that they think in hardware terms. They talk of smart power grids, building control systems, waste processes, optimising chillers and lights that turn off when no-one is there. All these things are important, but until they connect with the software side of a building, they are, frankly, dumb. Think software The software side of a building is all the things about the building that serve up a great user experience. Think of a smartphone: in hardware terms they are all pretty much the same, it is the layer of services provided through apps developed by an ecosystem of partners that brings the differentiation. Android users might not agree, but the reason the iPhone hoovers up 90% of all the profit in the smartphone market is because of the extraordinary way the hardware and software within the device works together to create a compelling user experience. Sticking with the smartphone analogy, how can these devices provide each and every user with a unique set of tools that is personalised just to them? Because they are packed full of ways to learn about every user in increasingly granular detail. Your phone, and the apps that appeal to you (there is no ‘“standard feature list”), learns about you, your likes and dislikes, your interests and attitudes, and uses this knowledge to tailor the provision of services accordingly. You can opt out of what some people think of as rather spooky “spying”, and that is fine, but the trade off is that you will only get the plain vanilla services, which you can take or leave. Over time, as behaviours become learnt and attitudes adjust to a changing world, few will want to opt out, as the consumer surplus of opting in becomes so great. Which brings us back to smart buildings. Truly smart buildings will be ones that, through hardware, software and a very large input of human skills, understand every person within them and flex, adapt and learn how to provide everyone with the environment that is most suited to their needs at any given time. Smart buildings are learning systems. The more they know about you as an individual and your co-workers and other occupiers as a group, the better the service they will be able to provide you with. Space as a service This is a foundational reason why a large percentage of office users will, within a 5-10-year period, opt to work in offices run along space as a service lines. In spaces like this the entire environment is managed by the same team of people and because they therefore can become intimately aware of how the space is being used, who uses it, and what works and does not, they will be able to tune the smart building to perform as well as it possibly can. The Edge, with Deloitte as a single occupier has this advantage, and it is well known that how the building operates is constantly tweaked in response to feedback from users and systems. Multi-tenanted buildings, where the property manager manages the fabric and common parts and then each occupier looks after their own demise, simply cannot be smart in the manner we are talking about here. They can become efficient but they cannot become smart. They just do not understand enough about how the building really works to do so. This human deficit can only be made good by large standalone occupiers or through space as a service, and with 48% of Londoners working for companies employing fewer than 50 people (99% of all companies), my bet is on space as a service being the route to truly smart buildings. After all, who wants to be dumb? For more on #spaceasaservice visit www.antonyslumbers.com