Cheap computing, unlimited data storage, unstoppable bandwidth and undreamed of technological transformations will generate a huge new wave of opportunities for Real Estate Brokers.
The software applications delivered over the ever growing Wi-Fi and upcoming Wi-Max networks will set you free! This will allow many of you to exchange high cost real estate offices for valuable money making business tools.
For those of you working within an office-based organization, your real estate company is really nothing more than a “Business Service Provider”. You pay a fee through either splits, desk fees or office fees and they provide services like phone, voice mail, fax, snail mail, office space and meeting areas, coffee, maybe PC access, some office based software and staffing. Let’s face it, smoke and mirrors aside, that’s what you pay for.
Up until the last six years, the tools like printers, faxes, copy machines and even old MLS terminals were all office based. I mean, copy machines used to be the size of a football field! We were a culture of white collar office workers driven by cheap gas and cheap development land along with low cost heating and cooling prices.
Well, with quadrupled energy costs and traffic congestion everywhere, here we are, One hundred million at home workers later. Shazam! Another paradigm shift.
The “Business Service Provider” model will be replaced by the “Application Service Provider” (ASP) business model. Giant-sized office space that sits vacant every day, is being replaced by nimble new companies providing a full arsenal of real estate and business software applications. These companies will leverage your business with qualified IT and system staffing working out of smaller office environments. This will allow the broker population to work from where it makes sense--the field, with their number one resource, their clients.
I think the misconception of the working at home movement is not really about working at home. For someone in the real estate business, this is still a contact sport. You won’t be selling much real estate to your two year old ,roommate or your spouse. You need to be in the trenches with people. ASP based software, delivered via internet enabled Tablet PCs and smartphones will give you what you need when you need it the most…sitting next to them, at a sportinng event or on the golf course.
The new face of real estate companies will provide brokers complete internet software applications instead of another 14,000 square foot office tomb. These new office models are full blown Application Service Providers.
People have been using forms of the ASP since the dawn of business. An airline is a classic example of a non-Internet ASP. Almost all businesses and people use airlines. Yet the number of businesses and individuals that own their own airline is extremely small. Instead, we rely on airlines to provide travel services to us on a per-use basis.
The main reason for the lack of jet ownership is the extremely high cost of entry. Jets cost millions of dollars to own and operate. Add to that the maintenance, staffing and fuel and these costs are so high that, compared to the cost of individual airline tickets, jet ownership make no economic sense.
The "pay a low price each time you use it" versus the "buy the service outright" option is a common feature of Internet ASPs.
ASPs are all around us in many different forms. We choose whether or not to use ASPs based on economic factors driven largely by our frequency of use and the cost of entry and maintenance. So, the evolution of Real Estate companies into this field is just a natural and needed step.
The ASP model will prosper because it offers some significant advantages over traditional business service offices. Here are five top advantages to using ASPs:
1. For small offices, individual brokers and startups, the biggest advantage is low cost of entry and, in most cases, an extremely short setup time.
2. The pay-as-you-go model is often significantly less expensive and often more predictable in terms of price.
3. The ASP model eliminates support issues. IT personnel tend to be very expensive and very specialized.
4. The ASP model eliminates specialized IT infrastructure for the application and supporting applications. For example, if the application you want to use requires an Oracle or MS-SQL database or Exchange server, you would have to support both the application, the server and the database.
5. The ASP model can shift huge, redundant Internet bandwidth to the ASP, often providing it at lower cost.
One thing that led to the growth of ASPs is the high cost of specialized software. The real estate industry is full of customized software. As the costs grow, it causes more and more of the broker’s income to be allocated to software, when in reality it should be spent on generating business from past or future clients.
Another important factor is the growing complexity of software and software upgrades. Distribution along with upgrades to the end user has become a costly hassle, and really “stone age” in the new networked world. In a large company with thousands of brokers, distributing PC based software (like a annual release of QES or RealFast) can be a cost and logistic nightmare. The ASP model can eliminate these headaches. One server upgrade and minutes later, everyone has it.
ASPs come in all shapes and sizes. One way to understand ASPs is to look at them from a few real-world examples.
Think about these common and largely unnoticed ASPs used to start a small business today:
A Web hosting company -.like eNeighborhoods, provides a web presence
An e-mail provider – like Hotmail or earthlink, provides you an address with spam and virus protection
A fax provider like- Efax, provides a fax service that delivers faxes to your e-mail inbox.
A real estate contract company like- True Forms or zip forms, provides customized contract forms over the internet
The huge advantage of using these ASPs is the fact that you don't have to do anything to get started. Years ago, a broker looking for these services would have needed to:
1. Purchase Internet connectivity, a router, a firewall, and switch
2. Develop, publish and maintain the web site
3. Purchase one or more servers for the Web server software, e-mail software, fax software, contract software, etc.
4. Hire a person to install, configure and administrate the software
In the case of a fax machine, purchase the fax machine and a separate incoming line for it
Those were huge hurdles for a broker to peruse such services. Now, all of these services can be ordered and delivered on the same day, for probably less than $150.00 per month. The costs to a broker from an ASP based office model will be even less due to buying power of the company.
Note that ASP versions of these applications are significantly better than anything an individual can afford to provide. For example:
In the case of Web hosting, the provider will normally have a huge amount of available bandwidth, and the bandwidth will be redundant at several levels. If there is a problem, trained staff, will fix it immediately. If you need more capacity or software, it is available with a phone call and a small adjustment of the monthly fee. The ASP will backup the data on a regular basis and is responsible for disaster recovery.
No broker could afford that level of service with a home-grown desktop infrastructure. Nearly any piece of expensive software, including giant applications like SAP and Oracle, now comes in an ASP version to allow these companies to reach smaller customers affordably. More importantly, smaller, localized applications are being hosted by emerging ASPs dedicated strictly to serving the real estate community. Some of these ASPs may in fact be the real estate company you work for in the future
ASPs today offer nearly any service a broker might need. Many of these services (like e-mail, Web hosting, MLS, CRMs, contract software, payroll, CMA programs, etc.) are mission critical.
With the continued downward pressure on commission rates, we all need to find ways to do our work more efficiently and spend less money doing it. ASPs provide the arsenal of software applications using a rent-as-you-go concept. Not only does this save you thousands in start up costs, but it is yet another excellent example of a .com era model you can integrate into your business or your office now to make you more profitable and position you to be successful in the future.
The new office of the future is everywhere you go
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