On Demand Office Space Like On Demand Computing

Amazon Web Services, the most widely used cloud computing platform, has a concept of “Reserved Instances” and “On Demand Instances.” Reserved Instances are virtual computers with a fixed hourly price and guaranteed availability. The hourly price is lowered based on how much money you pay up front to reserve it for some number of years (e.g. you pay more to reserve it for three years but you get a lower hourly rate compared to only reserving it for one year). On demand instances are the same technology as reserved instances but they have a higher hourly price and aren’t guaranteed to be available (e.g. you might request 10 instances but it could take some time for them to be available). Overall, the concept is pretty simple: some capacity is fixed and some capacity is available as needed.

Much like the strong benefit with this model for server capacity, the same need exists in the office space world, especially for technology companies. Technology companies, on average, are more volatile when it comes to staffing up and down compared to traditional companies due to how fast the industry changes and how difficult it is to predict breakout successes. How can the on demand computing model be applied to office space?

At the Atlanta Tech Village, we’re going to be experimenting with a few ideas:

  • Multiple tenant office space options including part-time unreserved coworking desk, full-time unreserved coworking desk, reserved coworking desk, furnished private room, and furnished private multi-room suite with adjoining sliding glass door to the adjacent suites for combining suites
  • Furnished adjoining suites in sizes like 600 sq ft, 1,000 sq ft, and 3,000 sq ft along with the option to combine them and create much larger suites (a simple rule of thumb is 4-6 people per 1,000 ft, depending on density)
  • Coworking space on each of the five floors so that tenants on that floor, and other floors, can have team members both in a private room or suite as well in coworking (imagine having a 1,000 sq ft furnished suite with 5 people in it and 3 more employees down the hall with unreserved desks in the coworking space such that there’s a mix of private, dedicated rooms and public spaces)
  • Coworking spaces can be used for standard team members, interns, contractors, and any other type of colleague — only it’s on demand and not locked in with a long contract, like most offices

Much like on demand computing in the cloud has changed the nature of software delivery, on demand office space in a flexible environment is poised to change how entrepreneurs think about office space. It’s an on demand, sharing world.

What else? What are your thoughts on on demand office space similar to on demand computing?

2 thoughts on “On Demand Office Space Like On Demand Computing

  1. David, the options at ATV seem to be just what young technology companies and startups need. However, how do you see this structure scaling to other spaces for young technology companies and commercial real estate in general – to spaces available for companies that are a little more mature but that still can’t commit to long-term leases. Most landlords and property owners have at least some amount of debt or a mortgage on the property and lenders are wary to lend money if there isn’t some certainty and predictability to future cash flow. The industry needs creative solutions to make lenders comfortable in these situations. Any ideas or thoughts?

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