In 2003, while completing my MBA, I believed then that virtual office was the certain future.  My peers and mentors all scoffed at the idea.

“People will never give up their offices.”

“Companies will never allow their employees the freedom to work from home.”

Seven, short years later, more and more companies are operating their offices on a virtual network, sharing files, and utilizing cell phones and Skype to create a virtual office environment.

But why did it take seven years for virtual office to really take off?  The internet was widely used back in 2003, and file sharing via email was rapidly replacing the fax machine.  I think companies have just been downright lazy and reluctant to begin utilizing free virtual office tools.  And many companies have simply dragged their feet in making the change.  By making everyone come to one place, the business owner had no reason to change.

Until now.

The recession has inevitably forced both small and large companies to convert to a virtual office structure and begin utilizing free tools like Google Apps and Google Voice.  These small companies are giving up pricey office space in exchange for home offices.  Many of these companies have provided virtual office tools to their employees, now allowing them to work from home.

In fact, a friend was telling me about his wife’s company with 40 employees.  While the business’s revenues slowed over the past couple of years, housing 40 employees under one roof was killing their income statement.  The solution? The company decided to axe the ridiculous office rent and instead provided tools for its employees to begin working virtually, from home.  The beauty of this new structure was that, not only did everyone keep their job, everyone was also really excited about working from home.

How this company’s income statement will recover or suffer from this business decision, only time will tell.  But the point is that they did it. They made the leap because they had to.  And they are not alone.

Seth Godin wrote about the move towards virtual office in his recent post titled, “Goodbye to the Office.”  An excerpt from his post sums up my sentiments on this topic exactly:

“…..Why go to work in an office/plant/factory?

1. That’s where the machines are.
2. That’s where the items I need to work on are.
3. The boss needs to keep tabs on my productivity.
4. There are important meetings to go to.
5. It’s a source of energy.
6. The people I collaborate with all day are there.
7. I need someplace to go.

But…

1. If you have a laptop, you probably have the machine already, in your house.
2. If you do work with a keyboard and a mouse, the items you need to work on are on your laptop, not in the office.
3. The boss can easily keep tabs on productivity digitally.
4. How many meetings are important? If you didn’t go, what would happen?
5. You can get energy from people other than those in the same company.
6. Of the 100 people in your office, how many do you collaborate with daily?
7. So go someplace. But it doesn’t have to be to your office……”

All of this talk provokes a billion dollar question in real estate: What is the future of commercial office?”

Noah’s of Utah is trying to predict where commercial office is headed with its new concept in commercial real estate.  At Noah’s, you can host a ballet class for an hour a week in a large room filled with mirrors and ballet bars.  The same day, a corporation can host a weekly meeting with its 40 virtual employees, and in the same room. How? The mirrors and ballet bars are on swivel doors as if inside a funhouse. White boards and projector screens are on the reverse side of the mirrored doors.

Noah’s is one commercial office concept that I think will do well in the future.

What other commercial office concepts will best serve the needs of companies that have chosen to ditch their conventional office space?  As Seth Godin lays it out in his recent post on this topic:

“When you need to have a meeting, have a meeting. When you need to collaborate, collaborate. The rest of the time, do the work, wherever you like.

The gain in speed, productivity and happiness is massive. What’s missing is… someplace to go. Once someone figures that part out, the office is dead.”

I wouldn’t say that commercial office as we know it will be completely dead. But I would say that it is certainly evolving, and fast.  What are your thoughts?

Posted by Corey Curwick on July 12, 2010