Consolidation in Property O&M Tech Affirms Shift Towards Data-led Unified Model

An empowering new approach to building operations unlocks the next wave of value creation for real estate owners and operators. The future will require commercial real estate players to depart from the status quo by transcending traditional, siloed ways of operations to a more proactive, unified model.

Things have simply shifted in the building operations industry, distinctly and dramatically. The pandemic has not only accelerated the adoption of digitization but has also given rise to a step change with a splurge of M&A activity in the property O&M technology globally. In the last 18 months or so, the adoption tailwind of data-driven building operations has rapidly gone up with a re-evaluated focus on operational savings and offering a connected and comfortable built environment post-pandemic. For many, this is evidence of a broader demand for technology products that unifies the power of building automation software and enterprise O&M applications in a single platform.

The years 2021 and 2022 witnessed significant announcements from established industry players, including Honeywell, Siemens, JCI, JLL, and MRI introducing partnerships and product initiatives around unified building operations. Honeywell and SAP launched a Connected Building Solution to take advantage of Honeywell’s OT data and utilize SAP’s IT data to optimize building performance. Siemens announced a series of acquisitions, including that of Brightly, to harness offerings around cloud-based asset and maintenance management.

JLL acquired Envio System and Building Engines, strengthening its portfolio to include a well-rounded suite of building automation hardware & software to manage energy & performance as well as enterprise applications to manage O&M services. All this significantly points to the market course-correcting towards a path of a unified operations environment, one where automation management software and enterprise O&M applications sit together in a single platform.

Doing more with less

Commercial portfolio owners in the UAE are looking for complete solutions and pushing for consolidation among O&M vendors to do more with less. It is increasingly difficult and expensive for property owners/operators to make sense of piecemeal software and be locked out at dead-ends of point-solution tools, making them turn towards exhaustive integration projects that are both long and expensive.

Integrating all building systems into a single cloud environment enables system-wide decision-making, execution, and optimization. The result is a future in which stakeholders can unlock the power of systems, processes, and people data to make meaningful real-time changes that optimize operational costs, comfort & energy scores, and productivity of all stakeholders.

In 2021, we saw incumbent software providers like MRI, a leader in property management and leasing software, acquire FSI, a cloud-based FM software provider, to solidify its offering in the O&M space.

With hybrid work becoming the norm, commercial office owners/operators must also equip offices for dynamic space utilization, and digital collaboration and find opportunities to reduce operating costs. VTS, a leader in leasing and asset management software, acquired Lane to position into the tenant/occupant experience category. iOffice and SpaceIQ merged to fulfill the evolving workforce’s demand for digital workplace experience.

Filling gaps vs a platform-first model

In the early 2000s, enterprises purchased ERP to get around the technology outburst. Soon after, customers realized ‘parts were missing’ or ‘it was available but not on the platform’. Leading ERP companies bought smaller companies to fill in gaps and create product roadmaps to fulfill growing needs, eventually opening up the integration frenzy and associated pains.

A similar parallel lurks around the property O&M industry today. A platform-first model that is designed for new-age real-estate O&M needs, a solution that organically augments the building automation sphere via IoT with assets, maintenance, and enterprise O&M management dramatically reducing support/development costs. Such a solution creates a barrier-free innovation adoption with a common interface, no data roadblocks, or the recognized hassles of integrating with competitor ecosystem tech/products.

As a strong advocate of cloud-based unified management of building operations, we continue to champion a platform-first, connected operations model and serve many enterprise customers, including ICD Brookfield Place, a landmark property in Dubai’s Business District; British Land, UK’s leading real estate conglomerate and many more.

“Facilio is not encumbered by legacy approaches and has built its solution with IoT in mind from the outset. We knew that incumbent legacy players that are either repurposed industrial solutions or expensive rigid software wouldn’t cut it for us. We wanted modern and intuitive solutions with end-to-end platform capabilities built to help us deliver a world-class tenant experience,” says Haithem Ibraheem, Property Operations Manager, ICD Brookfield Place, who implemented Facilio’s connected CMMS platform when they launched the project in 2020.

It’s an exciting period for the O&M proptech industry. All these acquisitions are great news validating the unified O&M demands of customers. For many of these acquisitions to become fruitful for customers, the M&A adrenaline will have to be tempered with stronger go-to-market strategies and continued investments in R&D to make it work ‘as one.’

Progressive owners/operators are all in for digitization and unification of lifecycle O&M management from automation systems and sensors—to—servicing, contractor, tenant, workplace management, and more. There are some big clusters that seem ripe for consolidation, horizontally and vertically. The trick to success is for the industry to latch on to the momentum of ‘unifying operations’ and figure out software providers that suit the needs of today and in the future seamlessly.