Internet-ready Buildings - in 1997

Now I am digging back a long way - to 1997.
At the time I proposed that the commercial property industry create 'Internet Ready Buildings. I canvassed a few like-minded souls in the property association and we pulled together a whitepaper on the topic.. I wrote the introduction.
Bear in mind this was 16 years ago!

Chapter 1

Introduction and orientation

The new digital era knows no limits, no boundaries and does not discriminate.

The old paradigm of business was atomic and the new paradigm is digital.  Old business problems were about getting products and services to physically, now it is about getting it to them digitally.  Take the fax for example.  The old way required getting a physical piece of paper to another destination. Now your letter never leaves the office but the content magically appears at the other end!  The physical dimension (paper) is now not important, and neither is the physical distribution channel.  Now it is a matter of content.  There is that old yuppie slogan “He who dies with the most toys wins”.  Well in business it is “He who has the best content wins”.

The digital age means that everybody has access to information and there is an enormous amount of it. This has an important implication for every type of business:

There is no competitive advantage in having access to information – it is what you do with that information, the type and quality of information that is important.

This is a new truth that a number of businesses have difficulty in understanding and coming to terms with. It manifests itself in property owners sometimes being secretive when it serves no purpose and brokers still thinking that knowing about stock is their advantage when it’s what they know that should be important.

The value of a computer is not R5000 – that is the cost of the hardware.  The information contained therein, the ability to disseminate and manipulate that information is its real value – and I reckon my PC (personal computer) must be worth at least R300 000.  This makes investment in technology quite phenomenal.  Unlike plant and equipment, motorcars or TV’s a PC is upgradeable – it’s scalable. An old TV gets thrown out – but a computer can just grow and grow as your needs evolve. 

An often-quoted management principle is that a company’s success is determined as follows:

  • 20% because of your industry know-how 
  • 40% because of how you treat your customers
  • 40% because of your technology.

Do you spend your business time in those same ratios?

WHAT IS THE INTERNET?

The Internet is a network of computers. These computers are not directly linked to each other but mostly uses the normal telephone infrastructure to ‘talk’ to each other. In order for computers to talk to each other using the analogue telephone infrastructure they each need a modem. This technology has existed for decades, but has only recently become popular with the public.  The reasons are twofold:

Firstly, Internet Service Providers(ISP’s) positioned themselves as routers of information which is effectively the same function that a server plays in an office computer network.  Your computer is not directly linked to another, but rather to your service provider.  Service providers are linked to each other, and every computer that is linked to a service provider is then effectively linked to every other computer.

The second reason is that special software called browsers has been developed that makes it easy for ordinary people to navigate on the information highway. Some years ago this was only possible if you were real computer boffin; and now it is easier than working a word processor. The average lesson to get started is 5 minutes.

HOW DOES THE INTERNET WORK?

The Internet is a fairly new and very dynamic distribution channel for information/ data. Whether it is pictures, sound or words, a computer can turn any data into bits and bytes (binary code); transmit it over the telephone line to any other computer that is connected to the net - anywhere in the world - in an instant!

If you pause to think about that for a minute, you will suddenly realise that the applications are endless - and that is not just a buzzword. It is a TV, VCR, a Hi-Fi, a fax, a typewriter all in one.

It is a network of phenomenal proportions, fast approaching a hundred million computers - and nobody owns it. People join and leave as they please. They can add any content to their computer and post it on their website.  There are no limits.

A sign of a well designed Internet website is one that keeps that visitor (or ‘surfer’) in that site for a long time, and makes them come back for more. The vast majority of the websites are the equivalent of old, bullet-riddled billboards on a dusty platteland road.  Unless you are planning to make your website work for you, you will do more damage than good by having a poor presence on a medium where the users are by definition opinion leaders, innovators and changemasters. 

Many businesses mistake a site with lots of fancy graphics (the so-called bells and whistles) for an effective site. A visitor (and every visitor is a potential customer) will only wait once to see the pictures, but it won’t make them come back.

BUSINESS ON THE NET

From the property perspective, the potential of the Internet is limitless as well. Without leaving your desk, you can:

  • Design a building
  • Raise finance
  • Contact partners/ contractors
  • List the property with brokers
  • Find tenants
  • Sign lease agreements
  • Do appropriate credit checks
  • Show the prospective tenant a finished unit - before construction has even started
  • Keep in contact with every role player
  • Keep an eye on the building work
  • Have site meetings with all concerned
  • Approve the final work

You only have to take occupation of the building physically, and everything else happens in cyberspace. This is not exaggeration, and each one of these activities are taking place now.

The question is: How do I go about doing business on the Net? The answer is, very soon but in an integrated manner:

The window of opportunity is quite small. With the Internet, it does not matter where in the world you are - you are on an equal footing with everyone else. For example, there is one book retailer on the Net (Amazon.com) that has quickly established itself and now there is no need for another. I have no idea where this retailer is physically located in the world; and neither do I need to know.  Every other book retailer will battle to establish a presence. 

As physical property is a somewhat different commodity, the need is somewhat different. The Internet is a potential productivity gain, if you can capitalise on the opportunities that are inherent in the property management and development process. For instance, a specialist architectural practice in Kuala Lumpur or India or wherever  may be contracted to do design work - without incurring travel expenses whatsoever, and have the work paid for at a favourable exchange rate.

To get maximum benefit from an Internet presence, the work-flow in your organisation must be designed to capitalise on the potential productivity gains offered by the Internet. You should not just duplicate existing services in an electronic format. After all do you back up a fax with a telex - just in case? It is a new business paradigm, and the workplace must be re-engineered to take advantage of that. For instance, a tenant may ‘sign’ a lease on the Internet and submit it to you.  The lease can be verified by a credit bureau, approved by a regional manager, posted to the accounts department for notice, deposits made and the Vacancy Schedule updated - without any human interference.

INTERNET WEBSITES

The dominant part of the Internet is the World Wide Web (WWW)- which is just a collection of websites. The website is just a page (or many pages) full of information that you allow access to from the outside. The first page or front page of this electronic publication is the so-called homepage. The homepage usually functions as some kind of a central link or ‘menu’ to the rest of the site. 

The name and address of a website is referred to as an URL. For example, SAPOA’s website address is:

http://www.sapoa.org.za

The address is written entirely in lower case, without any spaces and exactly with the punctuation marks as indicated. One missing full stop or dash or letter will result in your not being able to find the address on the Net.

The components of the address are:

http:// This merely tells your computer that you are using a specific computer language or protocol (hyper text transfer protocol).

www.  This states that your website is hosted on the World Wide Web part of the Internet. There are other aspects to the Net, but you can let the computer boffins worry about that.

sapoa. That is our domain name that has been uniquely registered.

org. This states that it is an Organisation (non-profit). Other alternatives are: co (non-US company), ac and edu (academic and educational institutions), gov (government), and so forth. Most SA companies will have the descriptors .co.za in their URL.

za. This is the country code for South Africa. Other self-explanatory one’s are nz, au, uk and so forth.

The above is your website address. E-mail is usually integrated into the ‘Internet package’, and every domain is entitled to at least one e-mail box. My e-mail address is similar to the website, but not quite the same: stratserv@sapoa.org.za.

You can clearly see the relation between the two addresses, but they are not the same. The difference is like knowing a company’s physical and postal addresses. Both are useful, but for different purposes. The one is for mail, and the other one is to visit!

IMPLICATIONS FOR THE PROPERTY INDUSTRY

The VMS and other search engines

**Note in 1997 I createda JV with a service provider to create the 'Vacancy Management System' - an early precursor to realestate.com.au

Disintermediation of the broking fraternity is a well-publicised issue. Whereas brokers could previously trade successfully merely based on the fact that they had access to information that nobody else had, those days are now rapidly coming to an end.  The playing field has been levelled and big and small now have access to the same information.  This has lowered the barriers to entry for this industry even further.

At the moment the VMS denies access to the casual surfer and only authorised access by certain members is allowed. This protects the broker from prospective tenants doing deals directly with the owner.  This should not lull brokers into a false sense of security, because it is now the time to seek new service opportunities based on different paradigms. 

PROPERTY DEVELOPMENT

Tenants will soon be asking about Internet-ready buildings- just as they ask about air-conditioners. New developments and refurbishments will have to consider the new technologies. Is it wireless bridges and routers or is it fibre optics? Is it diginet or leased lines? Must the expense be capitalised or is it part of operating costs? Who is responsible for maintenance?  There are a whole host of technical issues that are addressed by this publication.

PROPERTY MANAGEMENT

Much more can now be done from a remote site than was previously possible. Tenants, contractors and professionals can be sourced on the Net. Strategically installed video cameras can be accessed from a distant site and the building observed. Building records can be archived intelligently and very cheaply on the net. Payment for services and rent collection can be done automatically through electronic funds transfer – reducing bad debt risks and arrears.

TRENDS, PROBLEMS AND OPPORTUNITIES

E-mail is becoming pervasive, and is an exceptionally viable alternative to snailmail and fax. Before printing new stationery with your new addresses, investigate whether registering your own domain is not more advisable.

Be careful to register your company’s domain name before somebody else reserves it.  All website addresses are registered at a central database for a once-off fee of approximately R250.00.  A domain name serves the purposes of identifying the addressee.  If your company is the sole tenant of an office block, you want naming rights.

Assuming that your service provider is called Newbuzz, and you are trading as ABC Properties. Your registered e-mail address can be abcprop@newbuzz.co.za; and similarly, your website can be www.newbuzz.co.za/~abcprop.  But you don’t want any reference to your ISP in your address, because if you want to change to a better service provider, you have to redo all your stationery. If you register abcprop as your own domain name, your e-mail address will be (for example) john@abcprop.co.za., and your website address (URL) will be www.abcprop.co.za. This is irrespective of the fact that you are using Newbuzz or any other service provider. (If you want to know what your computer guys have done in this regard, check your business card!)

General practice is that companies have their own domain names, whereas individuals will have their e-mail account addressed to their ISP’s domain.

Choose your service provider with care, and even then don’t sign long term contracts because it is a rapidly changing industry, and not all companies live long.

Be careful of being over-charged for services. Some charge out of ignorance and other out of avarice. Companies without substantial IT/ Computer departments are welcome to contact the author at SAPOA for an opinion on quotations/ costs if they appear substantial.

In companies with office networks, there is a security risk that people from the outside can access your network. Not all hackers are malicious, but if there is a path out (onto the Net) then there is a path in. Firewalls are computers and/or programs that are designed to keep hackers out, but although security is improving - there is no foolproof system. As an interim measure, just connect one free-standing PC to the Internet. The pages that you want on the Internet are hosted at your service provider.  Of course you can act as your own service provider (ISP), but this is advisable really only in very large conglomerates where there are massive economies of scale and hundreds of users.

The Internet-ready building concept

A building can be an office park, a home a shopping centre or an industrial building. A building is internet-ready when it is designed, managed and marketed as space that has been configured and wired for Internet use. The concept of Intelligent buildings is a wider concept that includes for instance highly computerised lifts, air-conditioning etc. which 'intelligently' adapts to its environment.

My contention is, however, that the Internet infrastructure will become the network of choice to create intelligent buildings, and as such will precede the decision to create intelligent buildings in the future.


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