The Power Of Subscription-Based Managed Services
Commercial real estate professionals are accustomed to outsourcing, especially for companies that do not self-perform. This is why businesses like JLL, CBRE, Cushman & Wakefield and Newmark Grubb Knight Frank thrive. Take this one step further, and the industry is seeing outsourced companies take up outsourcing as well. CRE tech and solution providers are a natural extension of the outsourcing business model.
RealAccess, built by New York City-based RDM, is one example of how CRE is embracing outside expertise.
RDM’s services stretch beyond the modernization of CRE tech, with expertise in a myriad of professional services, including surveying, building measurements, compliance work and 3D tours.
In early 2017, RDM rolled out a new way of pricing and packaging its professional services to correlate better with its software.
“We are committed to helping our customers be successful, and felt like we needed to transform our model in order to achieve this,” RDM chief operating officer Ryan Green said.
The new packaging of managed services clicks with the Subscription as a Service model used for RealAccess, and fits with what Zuora CEO Tien Tzuo dubs "The Subscription Economy." In a recent Forbes article, Tzuo described the new business landscape in which traditional pay-per-product (or service) companies are moving toward subscription-based business models.
“You’re more than likely already living and working with subscription services now – possibly with how you get music, movies, food or clothing,” RDM CEO Peter Boritz said. “We believe customers are happier subscribing to the outcomes they want, when they want them, rather than having to pay big upfront fees and the burden of costly, inefficient ways to manage and update information.”
Subscription-Based Managed Services
One of the challenges RDM faces is being a category creator when it comes to subscription-based managed services. The CRE space is evolving, and RDM is trailblazing a new path as a provider of a true platform experience.
Traditionally, these services have been treated by vendors and architects as projects. When landlords need a building measurement, fire/life safety plans, or floor area ratio study, they would normally expect to get a quote for a flat fee based on square footage or time. RDM is pushing into a relatively new category by wrapping an SaaS model around legacy service work.
Many CRE portfolios like SL Green, Fisher Brothers, Beacon Capital and Paramount have already embraced the concept.
"Companies are outsourcing their non-core competencies – REBNY/BOMA calculations, AutoCAD skills, churn on floor plans to us and we’re wrapping all of it into a subscription," Boritz said.
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