Re-evaluating Real Estate: How CEOs Can Optimise Office Space

Darren Watkins, managing director for VIRTUS Data Centres, explains how business leaders can effectively optimise office space.

COVID-19 might be the most used word over the last 24 months, but that’s no surprise given how it has turned our personal lives and the working world upside down. It continues to impact all of us, but dare it to be said that not everything is potentially negative. There is no doubt that we are facing unprecedented challenges – but has the way we work changed for the better?

The pandemic has forced the adoption of new ways of working and expectations around work, and the workplace has fundamentally changed, accelerating the trend of remote working that was already evident over the past two decades. 

According to a report from the ONS in June 2021, of working adults who were home-working at the time, 85% wanted to use a “hybrid” approach of both home and office working in future, preferring to swap the commute for more time with friends and family. The benefit to workers is that they can make financial savings and boost their sense of wellbeing and productivity. Companies that adopt a hybrid workplace are estimated to save circa $11,000 per employee who works remotely half of the time, according to a report from Global Workplace Analytics. The savings come primarily from increased productivity but also from real estate savings and reduced absenteeism. From this, it would appear that a full return to the office is unlikely and maybe this new way of working is here to stay.

This trend is causing many CEOs to rethink their real estate strategies and investigate what office space is actually needed. Some are already in the throes of finding new premises, some are renegotiating existing contracts and others are reimagining their current layout. One thing to consider is rethinking the space that on-premises IT / server rooms occupy. Simply moving infrastructure off-site will free up existing space or reduce the space needed in new offices. Now could be the time to work with a colocation provider. 

Lessons learnt

CEOs are using the lessons from this large-scale work-from-home experiment to reimagine how some desk-based work is carried out and what role offices should play, whilst looking to create safe, productive, and enjoyable jobs and lives for all employees. The physical aspect of this is transforming how real estate and office space is used, to ensure they remain the ultimate enabler of productivity, a recruitment and retention tool and the key for post-COVID organisational success.

The office of the near future will need to be a collaborative and social hub, where people come together to discuss ideas, come up with solutions to problems and be together. Convincing home workers to make the leap of faith and return to the office – even if it is for a proportion of their working week – may be critical for the future success of businesses. The office location, size, design, layout and how they make workers feel are some of the issues that will require scrupulous attention over the coming months.

Technology and IT teams will continue to evolve as enablers of remote and hybrid working. This change will be simpler for those organisations that have already been through some form of digital transformation, and who are more cloud-enabled as a result. But that isn’t the full extent of how IT can help this new way of working be a success.

Office space reimagined

CEOs are also looking at other office space strategies and challenges. Will organisations change location, adopting a hub and spoke model? Will they occupy more or less space over time? How will landlord and tenant relationships change? What will the design look like? Overall, how much space is needed – more or less? And the amount of space companies occupy is a critical concern for CEOs who are faced with fast-approaching lease renewals. 

Whether this results in a reduced or increased demand for floorspace will depend on individual business activity and cultural dynamics, but IT teams can help free up whatever space is available. Regardless of how digitally transformed or cloud-enabled an organisation is, there is still hardware to be considered. Even if the organisation chooses not to have a physical office, equipment like servers, routers and storage all have to go somewhere – and that somewhere has to be robust enough to support remote and hybrid working. 

Almost all organisations will have a data centre of some sort. It could be anything from a few servers in a small room, to an entire floor of IT equipment, to a warehouse full of infrastructure taking up space. With office space now at a premium when planning for this new hybrid working, now could be the optimal time to move IT equipment off-site and free up valuable real office space for the new way of working when on site.

Now is the time to move IT

The most effective way to do this is to use colocation facilities in a data centre. Data centres aren’t just reserved for the large hyperscalers, but providers are available for any sized organisation to benefit. Colocation is the simple practice of renting space in a third-party provider’s data centre facility. As well as enabling businesses to streamline their own physical presence, there are plenty of other good reasons to migrate servers from on-premise organisations infrastructure. 

Importantly, having IT assets in a colocation facility allows fast, easy connectivity to the cloud services which are almost certainly a part of any digital and/or remote working strategy. The robust, reliable data centre interconnected infrastructure can enable access to the critically needed cloud environment much faster than using in-house IT infrastructure.

The beauty of colocation is that it doesn’t just meet the needs for today but also supports plans for the future. Colocation allows flexibility and scalability to expand or reduce infrastructure to fit the needs of the company, whether it’s room for more servers, or cutting back on power at times when operations are less busy. In addition, the responsibility of providing up to date and best of breed facilities falls firmly on the shoulders of the provider.

It is clear that hybrid working is here for the long term. In the future, many more people will continue to work remotely when the task is appropriate — their decision based on cost, convenience and company policy. However, office premises are likely to remain part of the business set-up whilst there is an inherent personal limitation in solely working from home, which lies in the need for and the value derived from face-to-face human connections. How the office is designed will have a strategic impact on the success of an organisation, so how much space and how the space is used will be critical. Reimagining IT would be a good place to start.