In the fall of 2019, I had the opportunity to moderate a panel at the MRI user conference. For those of you unfamiliar, MRI is a major software provider to the real estate industry. Originally started as an accounting platform, it has now grown into a full-fledged software platform for the real estate industry. That year, the conference took place at the Anaheim Convention Center, a sprawling campus with buildings across the street from Disneyland. The event took up almost the entire center and had a festive atmosphere. The CEO even came to a marching band for his speech. The event center’s numerous halls were filled with the company’s partners, each with their own booth as an exhibition hall of any other industrial event.
I wrote an article about the event at the time with the title Mass user conferences demonstrate the importance of tech ecosystems. I compared what MRI and other major real estate software companies were doing to what tech giants like Apple and Salesforce had successfully done. Salesforce successfully created an ecosystem of partners that develop on its platform, Apple built an app store. Ultimately, the dream of an open, collaborative PropTech landscape never came true.
This year, the MRI user conference seems to have a very different feel. The website does not list participating partners and each session is about the product itself (one is about using Microsoft’s Azure platform, an ecosystem that they piggyback on). Rather than create an app store or a collaborative development platform, MRI has aggressively acquired other companies in the space.
I don’t want to just rule out MRI, every other major real estate software company seems to be taking the same approach. Yardi charges $20,000 per year for each integration with its platform. RealPage acquired one of its competitors, Buildium. CoStar has continued to sue its competitors. Even VTS, which has positioned itself as the young collaborative upstart challenging the status quo, has built a marketplace available only to its users.
Nor can I say that I blame these companies for this strategy. Creating an ecosystem only works if you have a ubiquitous platform. No real estate software company has been able to master enough market share to make it work (CoStar may be, but we all know they would never consider this kind of approach). Most of these companies have done a good job of helping users connect their system with others and share data in between. APIs and software development kits are much more common today than they were a few years ago.
I think the PropTech industry has come a long way, but the promise of collaboration has never been fully realized. The reason companies like Microsoft, Apple and Salesforce are pursuing the ecosystem approach is to accelerate innovation. One company can only bring so many new products to market, and the larger the company, the more shy of new ideas. The truth is that maybe there just aren’t enough ways to innovate real estate software, how many apps can actually be spun out of an accounting platform? I hope one day to see a more collaborative approach to PropTech platforms, but based on what I’ve seen, I’m not holding my breath.
By no means do I want to cast a shadow on MRI with my article, they really did a great job pursuing partnerships. My qualms were more with my prediction than with any player in the industry. You can see a full list of their partners here.
I like buildings daring enough to embrace street art. We recently published an article on the benefits and potential pitfalls of adding murals to the exterior of buildings.
We have been closely monitoring the problems of Chinese real estate companies and it seems that the Chinese government is starting to investigate what could be fraud in some cases. (Bloomberg)
One writer has argued that the pandemic isn’t the only culprit for the excess office space in many cities, a decades-old tax law has also contributed to the glut. (WSJ)
More companies are shedding their offices, and some, like Lyft, have even started subletting their space to ease the burden of their long-term leases. (Market overview)