Why are Multinational Corporations Using Small Serviced Offices?

“Serviced offices offer essential access to competitive areas, making feasible cost rentals viable for small businesses” say 2017 West London Businesses Award winner Dephna. Their range of serviced offices in London were selected because of the benefits they provided to food companies; a large but not always well-catered for sector.

Working at coworking space

Giant corporations who have enough money to buy whole office campuses of their own shouldn’t need these co-working spaces. So why is Microsoft sending some employees to work alongside small startups in local San Francisco serviced office coworking spaces?

This move is part of a broader trend, which has seen many larger businesses move into the serviced office arena for completely different reasons than their small business counterparts.

Corporations are turning to serviced offices to get feedback

Rather than for cutting costs, Microsoft’s expansion into serviced offices is advantageous because it allows staff to find out first-hand how their software products are being used by their target customers.

Other firms that produce software for smaller businesses, such as IBM, are also stationing employees in coworking spaces to observe and offer advice to businesses using their programs. This frontline experience can be more insightful than any focus group or team of testers.

Serviced offices can help corporations get new ideas

It’s not just feedback that these tech giants are looking for in serviced offices; they are looking for ideas, too. By their very nature, serviced offices are the perfect place for new innovative entrepreneurs to set up shop. The ideas they come up with there could be useful to larger companies.

Recently, Microsoft granted 33 employees membership of the WeWork coworking scheme, which allows them to use WeWork offices and meeting rooms, which are usually full of small businesses with bright new ideas. IBM is taking a similar approach, leasing a space in a Galvanize serviced office building for employees to work in, and discover talented entrepreneurs, sometimes with a view to hiring them.

Big businesses are opening their own serviced office ‘incubation centres’

IBM has actually gone one step further than this, setting up a Silicon Valley coworking space of their own, which is open to entrepreneurs, to act as an incubator for fresh thinking. IBM’s latest San Francisco office is dedicated to their Watson supercomputer. Here, experts are on hand to help new companies make the most of the technology, with a view to collaborating on exciting new projects.

IBM are not the only major corporation who think this is a good idea. Consumer goods giant Unilever recently launched a serviced office initiative in Singapore. The space, dubbed ‘LEVEL3’, spans a whole floor of the multinational’s Lion City building, with 12 meeting rooms and 250 workspaces available for small businesses and freelancers to rent.

Vodafone, too, opened an incubation centre, called xone, in Silicon Valley, which they then closed and moved to London. Vodafone said xone’s London location would help them “draw on a vast pool of technology talent in the UK and Europe,” and that this would feed directly into their development process.

Meeting at serviced office

Serviced office providers are becoming big businesses

In India last month, coworking startup Innov8 raised an undisclosed amount from prominent angel investors. The total sum may be as yet undisclosed, but it was definitely enough to expand into major metropolitan areas like Mumbai, Gurugram, and Noida.

But no matter how much Innov8 raised, they are unlikely to have reached anywhere near the size of serviced office giant Regus. In 2016, Regus operated over 4000 business centres in 120 countries and is listed on the London Stock Exchange as a member of the FTSE 250 Index.

With serviced offices helping small businesses work for less; helping large businesses get feedback and find new ideas; and helping startups and large corporations alike make their money, the whole industry points towards a future where smaller and larger businesses are working together; both in proximity and in spirit.