The Road to Virtual Offices Print Version (18 kb) By Richard Meyers ALLIANCE Business Centers NETWORK July 2004 When Rick Nass, a newly minted accountant, wants to check his messages he has three options to retrieve those messages; he can call his receptionist and ask for them to be read to him. Or he can check his voice mail. Or he can pull up his e-mails for those messages. "I do all three. When I'm at the airport, I pull up my messages online, when I'm on the golf course I check my voice mail and sometimes I actually go to my business center to say hi to the receptionist and get my messages along with my mail. It's a great system and truthfully, I don't need an actual office." Welcome to the Virtual Office. The Virtual Office concept is not new. The office business center industry has been offering this alternative mode of officing for about 20 years. However, what has changed is the available technology that makes virtual officing so convenient, cost-effective and productive. At its essence, a virtual office allows a client to enjoy personalized receptionist services, receive mail at an office business center, and use of all of the office support systems such as copier machines and printers that the full-time office clients use, as well as use of a well-appointed conference room - all for approximately $175 per month. "I think the hardest challenge that this concept has - is that it sounds too good to be true, but it is," said Frank Cottle, Chairman of ALLIANCE Business Centers. "Because of the economies of scale in a business center, anyone can enjoy individually personalized telephone answering from a professional receptionist - who knows their name and face - in their company name along with the reliability of a dedicated, personalized voice mailbox 24 hours a day. This is not an answering service. This is your personal receptionist. There's a tremendous difference." Serviced offices, commonly called 'Executive Suites' have traditionally been marketed to start-ups seeking a single office in their neighborhood, or large corporates opening an office at several cities - all with prestigious addresses. But now large corporations as well as traditional smaller companies and independent users now consider a Virtual Office as a meaningful part of their overall real estate process, especially for sales and service reps in the field. While the use of office business centers for serviced office space has been reflective of the overall economy over the past seven years - surging in popularity during the dot-com boom, receding in use during the past few years of job losses and now experiencing a slight increase again - the use of the Virtual Office product, also commonly referred to as a "Corporate Identity Plan" has seen a reported increase of 2 to 3 times over the past three years. "There has been a fundamental shift by companies from occasional tactical to permanent strategic in the past three to four years," said Robert Polsen, Vice President of Sales of uReach Technologies, a unified communications company based in Holmdel, New Jersey One factor that is attributed to the increase in popularity of the Virtual Office is the comfort level with telecommunications technology. "Cell phones are now an additional limb to most people, but as important, clients are now receptive - even seeking - other available unified messaging technologies that allow them to receive their telephone messages on as email messages and vice-versa, as a part of their virtual office package, said Polsen. It's the convenience combined with the professionalism that makes it so appealing." In May, 33 private wireless companies announced $294 million in new financing. "With many web-based products such as those developed by uReach - who offer unified messaging services to individuals - there is a 'compete with them or partner with them decision to make," said John Milhado, ALLIANCE's European Director. The proliferation of such technologies demonstrates that increasingly users are more concerned with the communications aspects of their officing identity rather than with the real estate location. While most business centers currently offer such services on an a la carte basis, bundling such services as a mandatory part of the virtual office package is a new trend. Now, high-speed, wireless Internet access, known as Wi-Fi, is further adding to the appeal of the virtual office concept. "The ability to open your laptop in any area that is a Wi-Fi hot spot and receive your messages online immediately with the knowledge that your clients left those messages after receiving a personal greeting from a real, live receptionist - that's a powerful tool. Once people see it, it's actually an easy sell," said Laurent Dhollande, President & CEO of Pacific Business Centers, based in San Mateo, California. A second factor driving the growth of virtual offices is that business center companies have discovered their own service. Richard and Anthony Nissen are Principals with an office business center located at 211 Picadilly Circus - the heart of London. Their 10,000 square foot center has over 400 Virtual Office clients - at the equivalent of $400 per month. "The prestigious address helps sell the Virtual Office product," at a higher than normal rate but we realized several years ago that the demand for the service was there - it simply needed to be marketed. Bill Grodnik President of DaVinci Suites based in Salt Lake City agrees. He started aggressively marketing virtual offices through radio ads and now has 100 virtual office clients at $175 per month. For a market this size, to have that many virtual office clients, it shows you the demand for this service," said Grodnik. Until recently, the industry was highly fragmented and only in the last few years have larger operators aggressively marketed virtual officing to larger corporate clients through a single source. ALLIANCE Business Centers and Regus both promote global virtual office locations for their corporate clients through a single agreement valid at hundreds of locations globally. "First you had the demand, now the marketing of the supply, so clearly these efforts will also impact the trend by large corporate users to increase the strategic role of the Virtual Office within their long term real estate use and planning process". For the users, Virtual Office represents a quality of life improvement as well. "Because it's so cost-effective, I can spend more time doing the things I want to," said Nass, the accountant. "And that's the most productive aspect of the service, when you think about it." ALLIANCE Business Centers has 500 office business center locations in 31 countries and can be found at www.abcn.com. < Return to Press Coverage | Return to Top ^