WeWork Inc. is hoping to boost its drooping share price by joining the growing number of technology companies selling apps, data tools and other software to landlords and office tenants trying to adjust to the new world of hybrid workplaces.
Nine months after going public, the shared-workplace operator in July officially launched a service named WeWork Workplace, which includes the software tools that WeWork has been using to power its scores of locations. For the first time, WeWork is now offering these tools to all tenants regardless of WeWork membership.
WeWork executives say Workplace will help businesses lure workers back to offices by giving their employees an app with which they can do such things as book a conference room, post a company announcement or register for a yoga class.
“Companies of all sizes recognize that people aren’t coming in every day,” said Scott Morey, WeWork’s president of technology and innovation. That sea change in the workplace has created challenges that require digital solutions, he said.
But WeWork isn’t alone in looking for new business opportunities in the upheaval in the office-space industry caused by the pandemic. Competitors also offering a range of apps, data, telecommunications and other software include technology companies such as Cisco Systems Inc. and Honeywell International Inc. and startups such as VTS and HqO.
“The race is still early,” Mr. Morey said.
A WeWork location in San Francisco. The company shook up the office-space business in the years leading up to the pandemic.
Photo: WeWork
In the early stages of the pandemic, tech companies raced to help businesses cope with health, safety and telecommunication systems as employees shifted almost overnight to working from home. For example, beer-brewing company Heineken NV used HqO’s office app to maintain a safe level of occupancy and maintain social distancing, said Stephan Ottenhoff, a digital and technology manager at Heineken in the Netherlands.
More recently, tech companies have been trying to help businesses and landlords deal with the slow reopening of traditional workplaces. Most businesses have adopted hybrid strategies combining office work and remote work that have required management teams to rethink conference rooms, design, security, scheduling, food, air quality and other office needs.
Cisco is trying to tap into this demand with a palette of services including its teleconferencing system that cancels background sounds and a space-management tool that tracks employee usage of conference rooms and other office space. Cisco has added all these technologies to its New York offices, which it uses as a showcase for selling these services.
Honeywell, meanwhile, has tried to capture market share with software such as People Counting, a tool that analyzes video from security cameras to keep a real-time log of how many people go in and out of the office.
Cisco Systems uses its New York offices as a showcase for selling a space-management tool that tracks employee use of conference rooms.
Photo: Cisco Systems
Other tech companies are helping businesses and landlords persuade employees to return to offices, something many are loath to do after more than two years of settling into remote lifestyles. Office apps and accompanying data tools are designed to help overcome this resistance by making the workplace more fun, efficient and safe.
The size of the office-software business is difficult to gauge partly because it is so young, but participants estimate that it is in the billions of dollars.
WeWork’s rollout of its workplace-software service marks the latest chapter in the saga of the company. WeWork shook up the office-space business in the years leading up to the pandemic, but a planned initial public offering in 2019 flopped spectacularly.
Since then, a new management team has cut costs by shedding numerous leases. Last October, WeWork went public through a merger with a special-purpose acquisition company.
But the company’s stock, which hit a high of $13.18 in October, has fallen to under $5 a share partly because the company continues to operate at a loss and is still on the hook for a $2.4 billion load of debt, due in 2025, analysts say.
SHARE YOUR THOUGHTS
Will venturing into office software be enough to keep companies like WeWork afloat? Join the conversation below.
Some analysts don’t expect WeWork’s new workplace-software offering to be much help.
“It seems to be a diversion, more than anything else, away from what is a bad business model,” said David Trainer, chief executive of investment-research firm New Constructs.
But Piper Sandler’s senior real-estate-investment-trust analyst, Alexander Goldfarb, predicted that boosting building occupancy with new ventures such as WeWork Workplace and cutting cost margins help put WeWork on track to achieve positive cash flow in 2024.
“WeWork is a great outfit for companies looking for flexibility and small businesses to have, especially when you’re trying to figure out what your office needs,” Mr. Goldfarb said.
Write to Rebecca Picciotto at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
