Office Space Advice
Q & A: Laurent Dhollande Discusses Changing Needs of Serviced Office Customers
Published August 12th, 2009 by Mike Sullivan
The serviced office customer is changing — and fast. So says Laurent Dhollande, CEO of Pacific Business Centers. When Dhollande speaks, people listen. He is steering the success of one of the largest business center operators in the United States with 15 locations and growing.
Dhollande is a visionary. He understands the history of office space — and he understands the future of office space. He understands the importance of office tehnologies and he understands how to compete in the burgeonong serviced office industry.
aBetterOffice.com sat down with Dhollande to discuss these and other issues that serviced office providers — and thier customers — need to know about.
Is the serviced office customer changing?
Yes in several ways. He is becoming more price sensitive, partly due to the recession. His need for technology support is increasing, with managed bandwidth, VoIP telephony, Unified Messaging, and HD video conferencing capabilities. He welcomes the opportunity to outsource non-core activities, which creates more incentives for the serviced office provider to deploy stronger and deeper support services, such as call center capabilities, bookkeeping services, online legal library, and IT support. He needs access to multiple locations, particularly if he is a corporate customer, which constitutes the fastest growing segment of the serviced office space.
Is the mix of full-time offices versus part-time offices shifting?
The demand for virtual offices is not only exploding but will accelerate further. Full-time office users are also increasingly users of virtual office components. They value the ability to access conference rooms and day offices outside of their primary location, thus creating a growing hybrid between full time and virtual office users.
Fast internet, advanced phone systems, videoconferencing, etc. are everywhere in the industry. What else can serviced office companies offer to get ahead?
Optimize and look ahead. It’s not enough to upgrade to broader Internet bandwidth and to a state-of-the-art VoIP telephony system. The serviced office company needs to actively manage and optimize the infrastructure to make it affordable to the customers and keep up with the next wave of upgrades. The job is never complete.
A couple of examples. T-1 lines are not sufficient anymore to handle the traffic of a typical business center. But it is not enough to upgrade to multiple T-1s or to a DS-3 line. The operator needs to actively manage the bandwidth and optimize the use of capacity so as to minimize costs and make an ever more expensive infrastructure affordable.
Video conferencing is everywhere, but Telepresence is not, and serviced office companies need to prepare themselves for that upgrade. The cool video conferencing systems we bought 5 years ago and that can’t handle HD TVs will soon look as old and antiquated as the IBM electric typewriter.
How important is technology?
Paramount. What’s clear is that the value added for the operator is less in providing real estate but more in bundling and integrating services with office space. Operators should look for opportunities to leverage their technology platform to upgrade their service offering but also, in the end, to keep costs down.
How do you deal with ever more expensive infrastructure?
Ever more expensive infrastructure is a blessing for the serviced office space providers. It justifies our existence. Making an expensive infrastructure available to a large number of clients on a shared cost basis is the essence of our value add.
At the same time, the operator needs to justify his value add by delivering and maintaining this infrastructure in the most reliable and efficient manner. This is where economies of scale matter. With a portfolio of 15 affiliated centers, we can deploy technology solutions that are standardized and that rely on our network of centers to optimize cost and Quality Of Service.
For example, many of our centers work as back-up call centers for each other, which enhances the quality of service and avoids overstaffing. We are also partnering with independent operators that have made similar choices of technology platform to ours, to network our infrastructure with theirs, expand our services, and generate more economies of scale to everyone’s benefit.
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Maggie Correta August 12th, 2009 at 6:24 am
I guess technology is at the center of most industries these days, why shouldn’t it be at the center of the serviced office industry. It is a compelling argument to rent these spaces… most entrepreneurs aren’t going to invest in this level of technology on their own. I am interested to see how this plays out for Pacific Business Centers. They are big on the West Coast. Will they branch out with their tech-focused infrastructure?
Elizabeth Sanchez August 12th, 2009 at 6:44 am
It looks like these ‘changing needs’ surround technology. This guy is very focused on the high-tech aspects of officing. That’s a good take, considering the need for reliable communications, a distributed and mobile workforce, etc.
I like his last point: the increasing costs of technology justify the existence of serviced offices. I have never heard such a thing before. At some level, that is very true.
Rob Zeus August 12th, 2009 at 6:54 am
I really like reading the article with Mr. Dhollande’s thoughts. He is insightful about the serviced office industry and where it’s headed. He’s realistic about the challenges facing companies. He’s got a good grasp on what it takes to overcome those challenges. And his company, Pacific Business Centers, is proof that he’s on the right track. Bravo!
Bill Brookshire August 12th, 2009 at 5:26 pm
I think there will always be small operators in the serviced office industry. There are small operators in every industry. But they probably won’t be considered “Class A” executive office suites. Dhollande is always an interesting read. He’s got some very progressive views on the serviced office industry. I liked the last piece also on the office of the future.
Melanie Jones August 12th, 2009 at 5:31 pm
I like the stuff about how serviced office customers are changing. I think he’s right. Recessions always bring about changes. In the last recession, serviced offices didn’t fare as well. But this time around, it’s like the timing is spot on for a different way of thinking about how we use office space. And I think, to his point, technology has spurred and will continue to spur that evolution.
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