Magic Quadrant for Integrated Workplace Management Systems

26 June 2014 ID:G00261947
Analyst(s): Rob Schafer

VIEW SUMMARY

Effective management of the facilities life cycle — often an enterprise's second-largest expense — requires modular deployment of a strategic, integrated suite of functionality. Real-estate and facilities executives must act now to manage the risks and reap the rewards of this rich IWMS opportunity.

Market Definition/Description

Target Audience

This Magic Quadrant will be of most value to those striving to manage any part of the facilities life cycle — for example, executives in finance, IT, corporate real estate/property and facilities departments. Together, the various parts of this life cycle form the second-largest expense for many enterprises, the largest being people.1

Gartner defines the associated integrated workplace management system (IWMS) market as comprising the following five core functional areas, which, before the arrival of IWMSs, were organizationally and operationally independent and showed minimal interdisciplinary synergy:

1. Capital project management:

This area involves activities associated with the development of new facilities and the remodeling or enhancement of existing facilities, including their reconfiguration and expansion. Functions include capital planning, design, funding, bidding, procurement, cost and resource management, workflow, construction, project documentation and drawing, scheduling, and critical path analysis.

In connection with this area, we see a growing need to "rewind," to focus on the complex task of location management before capital project management gets underway. It's important to determine first how to maximize the chances of a proposed facility succeeding in relation to its location, be it a new retail location, manufacturing site or apartment complex. Questions to answer include:

  • Where should my next facility be located?
  • What are the demographics of this region?
  • What are the transportation logistics?
  • Are there issues regarding the availability of energy?
  • What choice of utilities is there, and how much are the associated costs?
  • How is wastewater disposed of?

Many IWMS vendors are responding to demand for geographic information system (GIS) location management functionality with innovative solutions that are rapidly becoming prerequisites for success, especially in the retail space.

2. Real-estate/property portfolio management and lease administration:

This area addresses strategic planning (such as site identification, selection and development), capital planning, RFP and lease analysis, real-estate portfolio management, financial management and analytics, tax management, lease administration (such as accounts receivable and accounts payable), transaction management, and support for the proposed new Financial Accounting Standards Board (FASB)/International Accounting Standards Board (IASB) accounting standard (see the Market Overview section), which may eliminate the off-balance-sheet operating lease.

The concept of big data — a key aspect of the "information" force in Gartner's Nexus of Forces (see below) — is playing a growing role in many corporate real-estate operations. Also, many IWMS vendors are developing robust big data solutions tailored to the real-estate function.

3. Space and facilities management (FM):

This broad area covers functions related to the operation and optimization of facilities. It includes facilities planning, space management, site and employee service management, resource scheduling (for example, office hoteling and making room reservations [see below]), physical security administration, environmental, health and safety matters, moves, adds and changes, "what if?" utilization scenarios, and facilities and space management analytics.

Mobile computing is having a growing impact on the way IWMSs in general, and space and FM systems specifically, are deployed and used.

4. Maintenance management:

This area, which includes elements of computerized maintenance management systems (CMMS) and enterprise asset management (EAM), covers preventive and unplanned/reactive maintenance management, warranty management (compliance and administration), work order administration, parts and inventory management, vendor management and building assessment.

5. Sustainability/facility optimization and compliance:

This is a rapidly growing and evolving area focused on the optimization of energy use — a core IWMS function, since buildings consume as much as 40% of the world's electricity, much of which is used inefficiently or even wasted. This area addresses energy efficiency management and reporting (active environmental controls), waste management, recycling, carbon credit calculation, renewable groundwater supplies, pollution absorption and nonrenewable mineral conservation, and certification and compliance with, for example, Leadership in Energy and Environmental Design (LEED) and Building Research Establishment Environmental Assessment Method (BREEAM).

The Nexus of Forces Is Driving IWMS (R)evolution

The Nexus of Forces2 has been a major theme of Gartner's research since 2011. The forces of mobility, information, the cloud and social collaboration are converging to create a consumer-driven ecosystem filled with emerging business opportunities and paradigm shifts. This convergence continues to have major implications for business and technology leaders delivering modern internal- and external-facing solutions. Indeed, this set of converging and mutually reinforcing forces is redefining the delivery not just of IT, but of business functionality across the enterprise. It has become a core driving force of rapid (r)evolution in corporate real estate (CRE) management and FM — the IWMS market — as well.

Gartner's research indicates that the Nexus of Forces is changing the nature of work: how it is performed, who performs it and — most importantly for CRE and FM executives — the places where it is conducted (see "Designing New Office Workspaces for the Year 2020"). From the enablement of efficient cloud computing to the increased productivity associated with mobility (devices, workers, customers), pervasive use of big data/analytics in real-estate portfolio management and the "intelligent building," to pervasive social networks, CRE and FM executives face a dramatic change in the way they will be required to service their business users.

Indeed, the very definition of the "workplace" — the "W" in IWMS — that CRE and FM professionals must manage and optimize is rapidly expanding to include, in addition to traditional offices, collaborative workspaces, hotels, libraries, homes, community centers, industrial spaces, manufacturing floors, medical labs, call centers, hospitals, cafes, city parks, cultural centers and so on. Just as the "Internet of Things" (IoT) is expanding the volume, and changing the nature, of technology — the "T" in "IT," so the rapid evolution of — indeed, revolution in — the nature and function of the workplace is expanding the definition of this term dramatically.

Similarly, just as managers of traditional IT organizations face a pervasive set of challenges when trying to manage and exploit the new world of the IoT,3 so too CRE and FM executives will be increasingly challenged to plan for, manage, exploit and optimize such disparate types of workplaces in a growing variety of locations and geographies.

The implications and risks of this transition, including its financial impact, will not be lost on C-level executives. CFOs and above are increasingly focused on the growing importance of the end-to-end costs associated with the enterprise facilities portfolio — from construction and enhancement to operations and maintenance and energy consumption — the full range of IWMS functionality. Effectively managing these rapidly rising end-to-end facilities costs (across the enterprise, second only to people costs) will pose significant risks but also create material opportunities for dramatic improvements in workplace efficiency and worker productivity.

Moreover, CRE and FM executives must understand that the benefits of deploying IWMSs transcend the material savings of more efficient planning, building and running of physical facilities. Enabling greater workplace efficiencies by, for example, introducing hoteling and reservation systems to aid workers' mobility and more effective collaborative workspaces, will help improve the productivity of an increasingly fluid workforce.

CRE/FM Challenge: Understand and Plan for a Dynamic Workforce

The rapidly changing dynamics of today's workforce — in terms of demographics, education, economics, social interactions and use of technology — challenge CRE and FM professionals to find flexible, innovative ways to match the fluid needs of this evolving workforce with the available space and physical assets.

All these dynamics must factor into decisions about the workspace, to support, among other things, more team- and activity-based, unassigned work areas, hoteling systems and dynamic room-scheduling capabilities. Compared with older generations ("baby boomers" and early members of "Generation X"), younger employees ("millennials" and members of "Generation Y") will tend to be more involved in communities, more effective working in teams, and more likely to use technology for building and tapping into relationships.

CRE and FM professionals must gain a better understanding of employees' external-to-work activity patterns and analyze how they do their jobs (based on observational data, not opinion surveys) to enable the development of a realistic workforce profile that, in turn, will enable effective workspace planning.

In this context of rapidly evolving IWMS functionality, the following have emerged as high-demand capabilities (the first three promise to give rise to the most innovation and highest demand in the IWMS market):

  • Nexus force — cloud (SaaS): This is perhaps the strongest trend in the IWMS market. Our research indicates that all IWMS vendors are experiencing a significant shift in demand away from on-premises, license-and-maintenance-based, behind-the-firewall deployments. Indeed, about half of this year's Magic Quadrant vendors have at least three-quarters of their customers on off-premises services (hosted or SaaS). The distinction between hosted deployments and SaaS is of growing importance, as our research indicates that many new customers require not just off-premises, cloud-based deployments but true subscription-based, multitenant SaaS, wherein multiple tenants share common physical computing resources while remaining logically isolated (tenants are not individual users, but user organizations); see Note 1. Fundamental traits of such deployments include quick scalability and elasticity (scaling infrastructure resources both up and down to meet demand), usage metering (payment only for what is used) and the concept of true self-service (highly and easily configurable by the user).4
  • Nexus force — mobility: The rapid evolution toward an increasingly agile and mobile workforce, along with the increasingly widespread use of mobile devices such as smartphones and tablets, is driving users to demand — and vendors to supply — mobile-enabled versions of much of the IWMS product portfolio. Organizations and vendors are quickly seeing the significant productivity potential of combining the convenience and power of handheld devices with the robust capabilities of IWMSs. For example, using a standard smartphone or tablet, a facility planner can update space occupancy, utilization, chargeback assignments and physical details in real time, while doing a field inspection; similarly, a technician can process and close a completed work ticket out in the field, and — based on his or her location — then be routed in real time to an urgent, newly submitted work order nearby.
  • Nexus force — information (big data and complex analytics): A growing number of large organizations are realizing the enormous value hidden in the vast amounts of real-estate data generated by most sophisticated IWMSs. When effectively managed and analyzed, big data from IWMSs can drive material competitive advantage and yield significant cost savings in most CRE operations. Thus, to give three examples, comparative real-estate portfolio analytics can benchmark the efficiency and cost-effectiveness of one's own portfolio against those of similar companies in the same geographic area or industry; the rapidly maturing "intelligent building" approach is yielding vast volumes of data that, when properly analyzed, can yield material and ongoing operational efficiencies; and sophisticated predictive analytics (see "GIS-based location management," below) can significantly improve the probability of strong returns on new locations and facilities.
  • GIS-based location management: Rapid advances in technology mean that organizations can now understand the profound impact that GIS-based location management systems can have on the entire life cycle of a facility — from site selection (in relation, for example, to site-related data on demographics, transportation, energy availability, waste disposal), to design and construction, to operations, maintenance and enhancement, and ultimately disposition. Indeed, many organizations are demanding robust, GIS-based functionality, which IWMS vendors are duly delivering, embedded in many IWMS modules.
  • Reduced time to value: As recently as four years ago, IWMS deployments had unacceptably long integration and deployment timelines (12 to 18 months for complex deployments), which were too often unanticipated in terms of time, cost and requirements for dedicated resources. Although such long delays have been largely eliminated by many vendors' well-designed rapid deployment templates, reduced implementation times and quicker ROI remain key requirements in most IWMS RFPs.
  • Role-based Web portal: Simple Web access is no longer adequate. Most users demand the ability for different roles to access the system via a portal that is tailored to individuals' differing roles within the organization.
  • Facility monitoring and assessment: Many organizations have a growing need for comprehensive, accurate, up-to-date data and analysis of building conditions and trends. Intimate and accurate quantification of the status of facilities is a key prerequisite for predictive analytics and effective capital budgeting for building construction, adaptation, maintenance, and major system replacements and enhancements.
  • Tighter and more effective integration between project management outputs and real-estate, lease and FM data: Historically, project data had to be input manually into the property database, but with a properly architected and deployed IWMS this data can flow automatically between functional systems — for example, from construction to real-estate to FM systems.
  • Effective interoperability between IWMSs and other enterprise systems: Because most organizations run their businesses using major enterprise systems, it has become a fundamental requirement for IWMSs to be compatible with the major enterprise financial and HR systems, as well as to operate in multiple database environments (such as Oracle, SQL and DB2). It should be noted that, while such integration with existing enterprise systems is a core requirement, integration with many "homegrown" (or at least heavily modified or poorly documented) systems typically ends up posing the greatest challenge/risk to IWMS deployments .
  • Baseline functionality: Once considered to be competitive differentiators, many IWMS features are now regarded as foundational functions that are much in demand by customers. These features include pervasive mobile device-specific functionality, multiple currency and language translation, worldwide 24/7 help desk support, strong reporting and business intelligence capabilities, and robust analytics and "what if?" scenario functionality (for example, for lease and financing options, building consolidation variables, and use assumptions related to office hoteling and desk sharing).
  • Strategic portfolio analysis: Most leading IWMS vendors provide robust strategic portfolio planning capabilities that include "what if?" analysis, scenario building, and sophisticated investment and cash-flow analysis, including risk analysis. We believe big-data-related analytics will play an increasingly important supporting role in enabling IWMSs to deliver precise, high-quality data to enable the most well-informed strategic decisions.

Resource Scheduling: A High-Growth Segment for IWMSs

Resource scheduling is a rapidly growing area within the space and facilities management segments of the IWMS market. It covers the management and scheduling of office resources, from meeting rooms, audio/visual equipment and catering services to resources for the growing mobile workforce (hoteling requirements, temporary office space and so on). Over the past 12 months, Gartner has fielded over 50 inquiries on the many aspects of resource scheduling.

A number of vendors specialize in this segment and continue to drive innovation — AgilQuest, Asure Software and Condeco, for example. However, we believe there is a natural synergy between this office-centric segment and the nature of IWMSs. Specifically, a significant overlap exists between the underlying technical and business requirements of an IWMS's space management functionality and resource scheduling systems — both must integrate with HR data, computer-aided design (CAD) drawings of facilities and FM systems, for example. Indeed, as organizations begin to understand and exploit the cost-effective benefits associated with the integrated ("I") aspect of IWMSs, they are realizing that a natural place for such resource scheduling functionality is within IWMSs.

Although somewhat belatedly, IWMS vendors are now rapidly targeting resource scheduling as a strategic area in which to develop robust functionality. Indeed, most vendors either have homegrown development projects for resource scheduling well underway or are acquiring this functionality from other companies.

The bottom line is that organizations should view resource scheduling as a strategic application system and ensure that their vendor has a suitably strategic road map. This is not to say that the non-IWMS vendors mentioned above should not be considered. On the contrary, we believe they have the most robust systems currently available, but they will increasingly be challenged by the growing maturity of the IWMS vendors' solutions. The key point is that organizations must ensure their resource-scheduling solution is tightly integrated with all required systems, such as HR systems, calendaring systems (such as for bidirectional to/from support for Microsoft Exchange and Outlook), and those associated with facilities drawings.

Best Practices for IWMS Deployment

Gartner's research indicates there are clear benefits and strong stand-alone ROIs to be gained from deploying single IWMS functional modules. Indeed, we believe the best practice is to avoid the "big bang" approach to IWMS deployment by taking a disciplined, "triage"-style approach to individual functions. In other words, we recommend that you identify which IWMS functions will deliver the greatest ROI and deploy them serially, each with its own stand-alone business case.

Having said that, the real payback and ultimate value of IWMSs lies in integration — the "I" in IWMS. Ideally, they should operate from a single database with a common user interface, workflow tools, executive dashboards, and robust, predefined and customized reporting capabilities. To ensure rapid time to value and a good ROI, it is also essential that IWMSs demonstrate robust interoperability with other enterprise application systems — such as ERP, supply chain management and HR systems — via increasingly robust Web service technologies.

The primary challenge when deploying most IWMSs is to evaluate candidly the strengths and weaknesses of existing internal systems and business processes and, where these fall short, to adapt them to those of the chosen IWMS. Indeed, a core success prerequisite and best practice when deploying an IWMS is to make the new IWMS the default business process, one that overrides current business processes in all but the most compelling cases. In fact, given the robust configuration capabilities of most IWMSs, this approach can often deliver the "best of both worlds" in the long term — a robust but standardized and easily upgradable system that can be configured to match most of the specific requirements of the business (see Note 2).

Magic Quadrant

Figure 1. Magic Quadrant for Integrated Workplace Management Systems
Figure 1.Magic Quadrant for Integrated Workplace Management Systems

Source: Gartner (June 2014)

Vendor Strengths and Cautions

Accruent

Founded in 1995 and acquired by Vista Equity Partners in 2010, Accruent's ownership changed hands once again in November 2013 with a majority investment by TA Associates, a global growth private equity firm (Vista retains a small minority share). Accruent is headquartered in Austin, Texas, and has annual revenue (almost exclusively North American) of $70 million to $80 million, according to Gartner's estimate. Accruent has become a solidly profitable, high-growth company. Its revenue grew by about 60% in 2013, aided by continued acquisitions (Evoco and Expesite being the most recent).

To its credit, Accruent is shifting its unique (but relatively inefficient) strategy of maintaining distinct, product platforms to one focused on a single primary platform, namely that acquired with its purchase of 360Facility in December 2011. In addition, in 1Q13, Accruent made a categorical commitment to the cloud by becoming an all-SaaS IWMS supplier (it has stopped selling legacy, on-premises systems to new customers, but will support most existing legacy systems through 2017). About 75% of Accruent's 2013 revenue came from multitenant SaaS.

Gartner believes that Accruent will continue to grow strongly, aided by more targeted acquisitions, especially in the international arena where it has limited presence but TA Associates has significant experience.

Strengths
  • Together, TA Associates' majority investment and Vista Equity Partners' continued minority share are a good indication of continued strong financial resources. This bodes well for Accruent's long-term strategy for international growth, something it has largely yet to achieve.
  • For the past three years, Accruent has grown rapidly in terms of gross revenue and profitability. Its strategy of pursuing growth both organically and through acquisitions has yielded good financial stability and improved long-term viability.
  • Accruent's total commitment to a cloud/SaaS delivery model is consistent with our research indicating that SaaS represents the significant (and growing) majority of IWMS deployments.
Cautions
  • Although Accruent's new parent, TA Associates, has the robust global perspective that Accruent has lacked, the planned push into international markets risks at least a temporary dilution of Accruent's resources and focus.
  • Feedback from legacy, on-premises customers has not been positive about the forced transition to all-SaaS delivery. Although Accruent will support existing on-premises customers through 2017, most enhancements will be concentrated on the SaaS platform.
  • Customer feedback indicates that Accruent could better communicate details of its road map, such as upgrades, new functions and strategic aims.

Archibus

Archibus was founded in Boston, Massachusetts, in 1982 by its current CEO, Bruce Kenneth Forbes. It is a pervasive, global provider of real-estate, infrastructure and FM solutions that has a strong presence in small and midsize businesses (two-thirds of its customers are companies with less than $1 billion in annual revenue). It has developed a unique business model centered on its extensive Federated Eco-System network of business partners, which include Archibus Solution Centers (ASCs) and other authorized and certified third-party partners and consultants who deliver its IWMS sales, implementation, product support and development, and other services.

The core of the Archibus Federated Eco-System is its growing global network of over 160 ASCs and 1,500 business partners, which provide local, national, regional, and global support and services for Archibus solutions.

The Federated Eco-System consists of firms that are separate legal entities that provide services to Archibus customers globally. Collectively, these firms reported 2013 expenditure on Archibus-related products and services of more than $2.3 billion. It is important to understand that this figure should not be considered an Archibus revenue figure in the traditional accounting sense of a public company, but rather a gross financial representation of Archibus' extensive ASC and third-party-partner Federated Eco-System.

Strengths
  • Archibus has one of the strongest international presences of the vendors in this Magic Quadrant. While about one-third of its revenue derives from North America, its rapid growth in Asia/Pacific means that this region now accounts for almost 40% of its revenue. Through its Federated Eco-System of partners and ASCs, Archibus products and services are available in over 190 countries and 32 languages.
  • Archibus offers a full range of integrated IWMS functionality. It is particularly strong in real-estate, facility and building operations management, asset management, Building Information Modeling (BIM) 4.0, and environmental sustainability and risk management functions.
  • Archibus' integrated commercial off-the-shelf structure allows for rapid time-to-value deployments — for example, actionable results within 90 days, depending on implementation complexity. It is also relatively scalable for small, midsize and large organizations.
Cautions
  • Although Archibus' unique Federated Eco-System delivery model has enabled a pervasive global presence, it also makes customers largely dependent on the quality, capabilities, and experience of the ASCs and their specific partners. Archibus indicates that its professional service teams and those of its ASCs are available to work directly with organizations and end users that request their involvement.
  • With such a vast number of partners and consultants (over 1,700) in its global Federated Eco-System, customer feedback indicates that the quality and experience of service partners can sometimes be inconsistent.
  • Some customer feedback indicates that Archibus' "how to" documentation could be more user-oriented/friendly and less designed for its more technical and knowledgeable partners. Customers also indicate that Archibus' reporting tool could be more robust and flexible; Archibus claims that the latest version (21.2) addresses this shortcoming.

Business Integration Group

Headquartered in Tempe, Arizona, Business Integration Group (BIG) was founded in 1998 and is majority-owned by a global commercial real-estate services firm, Cushman & Wakefield (C&W). BIG offers a full suite of SaaS-based IWMS functions and capabilities that cover five key functional "centers": Facility (FM), Portfolio (real-estate management), Occupancy (space management), Project and Green (sustainability management). Together, Facility and Portfolio represent about 75% of BIG's installed base.

BIG has a distinct orientation toward large, North America-centric organizations (two-thirds of its customers have annual revenues of over $5 billion, and over two-thirds of its revenue derives from North America). BIG uses a hosted SaaS delivery model almost exclusively, and about two-thirds of its business comes from the financial and technology/information service sectors.

C&W's majority ownership gives BIG a strong financial and operational foundation that removes any real question about its long-term viability. Although many of BIG's sales come through C&W, BIG operates independently, and it also provides its products and services to other real-estate service providers. Customer feedback confirms the basic independence of the two companies, and that there is typically no pressure on BIG customers to employ C&W's services later.

Strengths
  • BIG's close relationship with its majority owner, Cushman & Wakefield, ensures financial stability and facilitates new product enhancements that focus on users' practical requirements.
  • Customer feedback indicates that BIG has a good customer focus. It supports customers with its own qualified, responsive and knowledgeable staff for implementation and operations.
  • Customers indicate that one of BIG's strengths is its relatively rapid time to value. Some users testify to implementation times of less than six months, though durations depend on complexity and scale.
Cautions
  • Businesses with annual revenue of less than $1 billion and those looking for a strong Asia/Pacific should recognize that BIG does not have a major presence in either smaller organizations or Asia/Pacific.
  • Some customers indicate that the flexibility and ease of use of BIG's report-writing tool could be improved.
  • Some customer feedback indicates that BIG could be more proactive in communicating its product road map, including the timing and content of upgrades and enhancements.

FM:Systems

In the 30 years since its founding in 1984, Raleigh, North Carolina-based FM:Systems has developed offerings across the IWMS functionality spectrum. Its core strengths are in space, asset, move and real-estate portfolio management. FM:Systems' revenue (under $10 million, by Gartner's estimate) is highly (about 90%) North America-centric, and its customer base is about evenly split between organizations with revenues above and below $5 billion. While the large majority (over 80%) of FM:Systems' IWMS deployments are still on-premises, the company indicates that the trend is rapidly shifting toward hosted environments.

FM:Systems' IWMS modules have all been internally developed by its own product team. This approach yields a truly "integrated" system that can drive faster, less complex implementations and operations. The FM:Interact platform and related modules can also link to BIM models and data to support a wide range of workflows.

Strengths
  • Unlike many IWMS vendors whose product portfolios have grown through acquisitions, FM:Systems has developed all its FM:Interact modules in-house to produce a more integrated (the "I" in IWMS) solution across all the IWMS functional areas.
  • Customers indicate that rapid time to value and ease of use are characteristics of FM:Systems deployments. They also report highly visible and predictable total costs — for example, all service contracts are fixed-price, based on an initial detailed needs analysis and an easily configurable, well-integrated product set.
  • FM:Systems has a strong BIM offering, with bidirectional integration with CAD and BIM systems (it is Autodesk's only Industry Partner for FM).
Cautions
  • With annual revenue of under $10 million and a minor international presence that accounts for about 10% of its revenue, FM:Systems is a highly U.S.-centric IWMS vendor. However, it is developing a rapidly growing network of international partners and resellers that can provide direct sales and first-tier support throughout EMEA and Asia/Pacific.
  • Although FM:Systems' installed base is still overwhelmingly deployed on-premises, the company claims that hosted deployments are its fastest-growing type, which is consistent with the trends we see. Some customers indicate that, although they find FM:Systems' SaaS offerings and contracts somewhat immature, they also see rapid improvements.
  • Customer feedback indicates that FM:Systems' reporting and printing tools could be improved.

FSI

FSI, a U.K.-based company founded in 1990, was bought by its operational directors in 2002. It is an EMEA-centric IWMS vendor (over 90% of its $10 million to $15 million of annual revenue derives from EMEA, according to Gartner's estimate), with about 100 employees and almost 500 IWMS customers. Three-quarters of its customers are small and midsize companies (those with less than $5 billion in annual revenue). Its delivery model is almost exclusively license-based, with roughly 80% of its installations deployed on-premises. The core functional strengths of FSI's Concept Evolution suite focus on asset and facilities management and maintenance.

Strengths
  • Customer feedback indicates that FSI has been able to retain that agility and responsiveness of a small vendor, and that its Concept Evolution suite is relatively intuitive and easy to use.
  • In 2013, FSI introduced FSI Go, an innovative, purpose-built software platform for mobile application development that enables users to extend the functionality of its Concept Evolution IWMS suite, as well as that of third-party integrated systems.
  • Customers indicate that FSI has good workflow tools that enable the user to configure the system extensively without the involvement of FSI.
Cautions
  • FSI's highly EMEA-centric focus may be a limiting factor for non-EMEA organizations.
  • For users requiring true multitenant SaaS deployments, FSI's on-premises or hosted license-based model may be a limiting factor.
  • Some customers indicate that FSI's offerings lack adequate international, country-specific capabilities, and that the technical skills of their support staff could be improved. FSI has confirmed that it has recently significantly enhanced its support staff to improve support for its mobile clients and traditional support channels.

IBM

Three years after its acquisition of Las Vegas-based Tririga, IBM has a more mature and robust IWMS platform, with a clearer road map that confirms IBM's commitment to expanding the functionality of the Tririga IWMS suite. Although IBM still has some challenges to overcome in scaling up its global delivery and support network, overall customer feedback indicates a positive trend. Indeed, although IBM does not split out its IWMS revenue, our research indicates that it has grown its global annual Tririga revenue to over $100 million.

IBM delivers a robust suite of IWMS applications on a single technology platform and data repository. Furthermore, whereas in 2012 IBM's IWMS customers were predominantly large North American organizations (over 76% of its clients were from this region and over 80% had more than $5 billion in annual revenue), it has done a good job of rebalancing, so that 2013 saw its customer base split roughly evenly between North America, Europe and Asia/Pacific, and also evenly between organizations with revenues above and below $5 billion. IBM's customer base remains largely (over 90%) license-based and on-premises, although we expect this will start to change in 2014 and 2015 as IBM introduces a direct, single-tenant SaaS delivery model through the recently introduced IBM Service Engage.

Strengths
  • Since its acquisition of Tririga in 2011, IBM has made Tririga a robust and global IWMS offering. IBM's global financial and human capital resources are among its core long-term strengths.
  • As a growing part of IBM's Smarter Buildings initiative, IBM Tririga is being used by customers to help manage and reduce the energy usage and environmental impact of their facilities portfolio, and to improve its overall operational effectiveness.
  • Customer feedback indicates that IBM has brought rigor and maturity to its Tririga portfolio, as well as continual innovation (for example, the introduction of robust analytics across the product suite).
Cautions
  • Organizations looking for a true multitenant SaaS solution should bear in mind that the overwhelming majority of IBM Tririga deployments remain on-premises. However, IBM indicates that, in 2H14, it plans to offer a direct, single-tenant SaaS delivery model via IBM Service Engage.
  • Although some customers continue to indicate that the quality of IBM's support is inconsistent, IBM has made good progress in developing a robust and global team of qualified and experienced Tririga deployment and support staff, as well as an extensive and credible network of global partners.
  • Customer feedback indicates that IBM could improve the coordination and alignment of its development, sales and marketing, and end-user support activities.

Indus Systems

Massachusetts-based Indus Systems was founded in 1987 and currently has about 120 employees. The company's growing base of about 120 customers is entirely North American, and almost all its customers each generate less than $1 billion in annual revenue. While Indus does have a few customers deployed on-premises, most (over 85%) are deployed via a hosted SaaS model. Indus' industry sweet spot remains the government sector, from which it derives over half its revenue. Although it is a relatively small, U.S.-based vendor, Indus' iDrawings platform offers a robust, drawing-centric, Web-based approach to facilities information systems, application development, and computer-aided facilities management (CAFM) services.

Indus' iDrawings platform is a seamlessly integrated architecture for drawings and data that supports all the functional modules of its flagship iDrawings product. iDrawings is an internally developed all-SQL, Web-based facilities drawing and information management and sharing system that enables users to store, share and view drawings of facilities and related information using only an Internet browser. About 85% of Indus' iDrawings installations are deployed via a SaaS model.

Strengths
  • A central strength of Indus' iDrawings product portfolio is its support of the integrated aspect of an IWMS. Since Indus has developed iDrawings entirely internally, it can deliver a more integrated view and a more seamless customer experience across all iDrawings functional modules.
  • Several customers indicate that iDrawings' relative ease of implementation and use, and good price/performance, are among its strongest assets.
  • Customer feedback indicates that Indus is using its relatively small size to deliver responsive, "high touch" service, from implementation to operation.
Cautions
  • Indus is limited to North America and mostly focused on small and midsize businesses with less than $1 billion in annual revenue.
  • Customer feedback indicates that Indus' documentation could be more detailed; it could, for example, explicitly indicate release-to-release changes and the criteria required for reporting.

Lucernex

Founded in 2000, Plano, Texas-based Lucernex is a relatively small vendor with about 40 employees and annual revenue of about $10 million (by Gartner's estimate). It is a fast-growing IWMS vendor that focuses exclusively on the retail industry. Its rapidly growing customer base — in 2013, it grew by over 50% to 50 customers — is almost entirely U.S.-based and uses a true multitenant, cloud-delivered SaaS environment hosted by Rackspace's cloud services.

Despite its relatively limited resources, Lucernex has had success across the size spectrum of U.S. retailers, with about half its customers in the $1 billion to $5 billion revenue range, and the rest split roughly 20% above and 30% below that range.

Lucernex's deployed modules are well-balanced across its retail IWMS product suite. They include modules for market analysis and site selection, capital management, project management, lease administration and rent accounting, and FM.

Strengths
  • Lucernex's position in the Niche Players quadrant is due to its disciplined and exclusive focus on the retail industry, which we view as a source of strength for this rapidly growing company. Lucernex has a consistent track record of walking away from nonretail opportunities and sticking very closely to its core focus on the retail sector. Lucernex has a robust IWMS offering that is highly specialized and effective for the retail industry.
  • Customer feedback indicates that Lucernex's strengths are its deep knowledge of the retail sector, true cloud-delivered multitenant SaaS solution (it has not simply been "cloud-washed"4), experienced support staff, highly configurable user interface, good price/performance and rapid time to value.
  • Customers indicate that Lucernex has strong, easy-to-use workflow configuration tools and that its support personnel are responsive and well-trained.
Cautions
  • In the short term, Lucernex's lack of significant international presence should be borne in mind by some large multinational corporations. However, Lucernex indicates that it does have customers in a few international locations, such as Canada and South America, and that international expansion is a core goal for 2015.
  • As a small, high-growth company, Lucernex's core challenge is to maintain its reputation as a nimble company that has high-quality, experienced personnel and that delivers solid support during deployments and ongoing operations. Lucernex believes its close partnership with Tango Management Consulting will significantly mitigate the risks associated with this challenge.
  • Some users indicate that Lucernex's FM module has limited functionality. However, the company is rolling out a significant, retail-specific FM enhancement.
  • Lucernex does not offer behind-the-firewall, on-premises deployment or any direct sustainability solutions.

Manhattan Software

Manhattan Software has its global headquarters in London, U.K. and its U.S. headquarters near Boston, Massachusetts. North America is now Manhattan's most important region, contributing almost half of its $70 million to $80 million in revenue, according to Gartner's estimates. Europe, the company's home territory, is its other major revenue source, accounting for over one-third of its total, and Asia/Pacific has grown to represent over 10%. Manhattan grew its worldwide customer base by about 30% in 2013, to about 450. Judging from its installed base, Manhattan's customer sweet spot is large organizations: over half its customers have revenues in excess of $5 billion, about one-third are in the $1 billion-to-$5 billion range, and the rest are under $1 billion. Manhattan's delivery model is consistent with the strong trend we see within IWMS market, having shifted dramatically toward multitenant SaaS (over 80% of current installations, up from about 50% in 2013). Manhattan has been consistently profitable and self-funded throughout its 30 years.

Strengths
  • Manhattan has a strong range of IWMS functionality, with a focus on project, real-estate, facilities, space and maintenance management. It recently introduced innovative offerings relating to mobility, big data analytics and, through its February 2013 acquisition of Datacraft Design, the rapidly growing area of resource scheduling.
  • For multinational corporations looking for an IWMS vendor with a solid North American and European footprint, Manhattan has a balanced presence in both regions and good capabilities in multiple languages and currencies.
  • One of Manhattan's core strengths is its centralized financial analytics function, which is integrated across its entire IWMS product suite. It includes real-estate subledger (accounts payable and accounts receivable), general ledger, predictive modeling and pattern analysis capabilities.
Cautions
  • Manhattan's strong recent growth — Gartner estimates its revenue grew by 35% in 2013 — pose a challenge for it and its service partners to deliver a consistently high level of support service for both implementations and ongoing operations. Although Manhattan received generally positive customer feedback, some customers have expressed concerns about inadequate availability of experienced support personnel — this appears to be an issue of quantity, rather than quality.
  • Although Manhattan indicates that its Asia/Pacific business is growing rapidly, organizations with IWMS requirements in this region should bear in mind that Manhattan derives only just over 10% of its revenue from this geography.
  • Some customer feedback indicates that Manhattan could improve its online training offerings and the accuracy and timeliness of its invoicing process.

MCS

Founded in 1989, MCS is headquartered in Antwerp, Belgium. In 2013 it had about 150 employees and revenue of nearly €10 million ($10 million to $15 million), according to Gartner's estimate. MCS is highly Europe-centric, with about 70% of its roughly 300 customers located in Europe, and the remaining 30% split between Asia/Pacific and North America (the former having roughly double the latter). Judging from its installed base, MCS does well with both relatively small organizations (over half its customers have revenues under $1 billion) and large organizations (almost one-third have revenues over $5 billion).

Although about 80% of MCS's 2013 installed base was still deployed on-premises (on a license and maintenance model), the company indicates that about 70% of new customers are choosing to deploy in the cloud (using a multitenant SaaS model).

Fundamental to MCS's success are innovation partnerships with several large companies across several functional domains (for example, maintenance, energy management and property management), as well as with one of the largest service providers, which is responsible for 20% of MCS's revenue. MCS's core functional areas are facilities, space and maintenance management. The government, manufacturing and finance sectors account for about three-quarters of its revenue.

Strengths
  • Developed internally over 25 years, MCS's IWMS product suite, myMCS, embodies the true meaning of integration — the "I" in IWMS — with a common data architecture and user interface throughout.
  • Customer feedback indicates that myMCS modules are relatively easy to configure, deploy and use.
  • Several direct MCS customers indicate that it has a strong and knowledgeable support team, and that it feels more like a partner than a vendor.
Cautions
  • Global companies should be aware that MCS derives 70% of its revenue from its home region of Europe. Partnerships with a few global service providers form its main international distribution channel.
  • Although myMCS is Web-accessible via a hosted, virtualized (through Citrix) model, the process of transition to an all Web-based platform is ongoing, and some customers indicate that they would like it accelerated.
  • Some customer feedback indicates that MCS could improve its software code and release quality and process — by, for example, issuing fewer but better-tested releases — and do a better job of communicating its short- and long-term road maps. MCS states that, as of 2014, major releases are now limited to twice annually.

Oracle

Since its September 2012 acquisition of Skire, an IWMS software provider largely focused on the engineering and construction (E&C) sector, Oracle has been busy moving Skire's largely SaaS customer base to Oracle and its hosting facilities, as well as a developing a road map for the eventual integration of its flagship Primavera P6 product suite with Skire's Unifier suite.

Oracle's core motivation for the Skire acquisition was its significant synergy with, and expansion of, the Oracle Primavera Global Business Unit's E&C-focused construction project and portfolio management (PPM) capabilities. Oracle is also working to leverage Unifier's real-estate and FM capabilities to expand its Primavera brand into the IWMS's purview of the end-to-end management of the complete building life cycle. Oracle's overall IWMS strategy is to support more advanced capabilities in areas such as FM, real-estate management, lease administration, BIM support and space management.

Oracle does not break out its IWMS Unifier-based revenue, but Gartner estimates that about half of Oracle's IWMS Unifier customers are midsize organizations with revenues of $1 billion to $5 billion, that roughly 30% are large organizations with revenues of more than $5 billion, and that 20% are smaller organizations with revenues of less than $1 billion. Our research indicates that Oracle's IWMS Unifier customer base is largely concentrated in North America (70%), with only about 15% in each of EMEA and Asia/Pacific.

Among Skire's attractions for Oracle was its extensive use of the SaaS delivery model, which has rapidly become the delivery model of choice for a significant majority of IWMS deployments (about three-quarters of Oracle's Unifier installed base is deployed via SaaS). Indeed, Oracle believes that one of Unifier's key differentiators is its rapid service delivery model, whereby its extensive upfront discovery process provides a strong foundation for efficient implementation.

Strengths
  • Oracle brings obvious and enormous benefits of scale and resource availability to the Unifier IWMS product suite. The acquisition of Skire has already solidified the already dominant positions of these two strong offerings — Primavera and Unifier — in the construction PPM space.
  • Oracle Unifier has strong project financial management capabilities (such as budgeting, forecasting, bidding, cash flow, earned value and currency conversion) and can handle any number of currencies simultaneously.
  • Oracle Unifier, based on a true SaaS/cloud architecture, was developed entirely in-house, which ensures a greater degree of natural integration, configurability, data continuity and ease of use than product suites that have been assembled through acquisition. Moreover, customers indicate that Oracle's migration of Unifier into its Red Stack has added product maturity and stability.
Cautions
  • Oracle continues to enhance Unifier's non-PPM IWMS functions (for example, for real-estate management and FM), and has a short-term (FY15) road map for Unifier 10 and 10.1 (featuring, for example, multiple-language support, browser neutrality and enhanced mobile support). However, we remain concerned that the non-PPM Unifier modules will keep pace with neither the core heritage and strength of Unifier and Primavera — their PPM capabilities — nor the non-PPM IWMS market in general.
  • Feedback from existing Unifier (that is, former Skire) customers indicates that the 2012-to-2013 transition to Oracle's hosting facilities was occasioned by material outages and significant performance issues. Oracle states — and customers confirm — that these hosting transition issues have been completely solved, and that availability has returned to high, pretransition levels.
  • Customer feedback indicates that Unifier's international capabilities, such as language support, could be improved for multinational companies, as could its "cumbersome" mobile offering. Unifier 10, scheduled for later in 2014, should help with this.

Planon Software

Founded in 1984 and headquartered in the Netherlands, Planon Software is among the largest global IWMS software providers, with over 450 direct, full-time employees. It derives about 60% of its global revenue — over $70 million in 2013, according to Gartner's estimate — from Europe, and its North American business has grown to account for about 25%. Planon has over 2,000 customers, about two-thirds of which having annual revenues of more than $1 billion.

Planon's IWMS product suite includes facility and space management, operations and maintenance management, project management, and real-estate portfolio management capabilities. Planon's Accelerator is an innovative approach to accelerating time to value with out-of-the-box solutions and preconfigured processes that are aimed at lower-end users without major system integration and implementation resources.

Strengths
  • Customer feedback indicates that Planon can deliver relatively rapid time to value (three to six months is not unusual, depending on scale and complexity). Supporting this claim are Planon's high percentage of fixed-price implementation engagements (85%) and low implementation-to-license cost ratio, which Planon indicates (and several customers confirm) is less than one-to-one — that is, the cost to implement its solutions is less than the license and maintenance cost.
  • Planon's standard IWMS modules have all been developed internally, an approach that has yielded a more integrated solution that is generally less complex, and easier to configure, upgrade, learn and use.
  • Planon's IWMS product suite was developed from the outset with a strong international orientation. It is well-localized in terms of languages, currencies, dates and times.
Cautions
  • About half of Planon's installed base is still deployed on-premises behind customer firewalls. However, Planon has a good SaaS offering and is experiencing a strong shift away from on-premises deployment toward SaaS.
  • Although Planon continues to make good progress in supporting its North American customers in terms of implementations and ongoing support, some customers indicate that it needs to improve its U.S.-based support staff. Indications are that this is more an issue of quantity than quality.
  • Customer feedback indicates that Planon could do a better job communicating its road map (such as the scheduling, content and implications of upgrades), and offer more proactive business process advice during the integration and implementation phase.

SAP

SAP's IWMS offerings center on its core ERP Central Component, SAP ECC. This includes SAP ERP Financials, a prerequisite for any of the other SAP ECC applications, which include investment management, project system, materials management, plant maintenance and business partner applications, as well as SAP Real Estate Management and SAP Treasury and Risk Management.

SAP's full IWMS offerings include an additional 12 applications, such as SAP Portfolio and Project Management, SAP NetWeaver Business Warehouse, SAP BusinessObjects Dashboards, SAP Crystal Reports, SAP Invoice Management by OpenText, SAP for Engineering, Construction & Operations, and SAP Mobile Platform (formerly Sybase Unwired Platform). Each of these applications can be deployed independently.

SAP's IWMS deployments — those using SAP Real Estate Management, for example — are highly Europe-centric, with the significant majority of its IWMS customers being large, Europe-based organizations. The rest of its customers are split about evenly between the U.S. and Asia/Pacific.

Strengths
  • SAP's significant resources — 2013 revenue of €16.8 billion or $23.3 billion — and global presence make it a de facto contender in the IWMS market.
  • Existing SAP ERP users should evaluate the business case for deploying SAP's IWMS offerings — for example, its core SAP Real Estate Management application — to capitalize further on what are often significant investments in SAP.
  • Customer feedback indicates that SAP's initial pricing can be quite attractive for large accounts for which it deems it strategic to deploy IWMSs.
Cautions
  • Gartner's research indicates that SAP's IWMS deployments (those of its core SAP Real Estate Management application, for example) are highly concentrated among organizations that generate more than $5 billion in annual revenue and that are based in SAP's home region of Europe.
  • Organizations that do not already use SAP for their back-end ERP system are unlikely to use SAP exclusively for its IWMS solutions (for example, its core SAP Real Estate Management application). In fact, we know of no organization that has deployed SAP's IWMS solutions without first being an SAP ERP user.
  • Customer feedback indicates that the SAP Real Estate Management application could use better strategic, predictive and scenario-based analytical capabilities.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

  • FSI
  • MCS

Dropped

None.

Inclusion and Exclusion Criteria

Gartner's Magic Quadrant research process involves primary research with vendors' customers — some users of Gartner's client inquiry service,5 some identified as reference customers by the vendors themselves — as well as scrutiny of each vendor's own representation of its organization and offerings (see Note 3). Our analysis involves weighting both sources of information, with a heavy emphasis on feedback from user organizations that have deployed, and are using, the vendors' products and services. As a result, many of the individual categories have "user reference" criteria factored into the scoring. Gartner considers user feedback to be one of the most important measures of a vendor's success. In addition to the many ad hoc, vendor-specific discussions that happen during the normal course of our interactions with users of Gartner's client inquiry service, a minimum of three detailed customer reference questionnaires and corresponding one-on-one interviews were conducted for each vendor as an integral part of our research.

Gartner evaluates IWMS vendors on their Ability to Execute and Completeness of Vision. When the two associated sets of criteria are evaluated together, the resulting analysis gives a view of how well a provider performs for a spectrum of IWMS services, compared with its competitors, and how well it is positioned for the future. This evaluation is a snapshot in time. The competitive and dynamic nature of the IWMS vendor market over time affects the relative positions of evaluated companies.

We encourage organizations to treat this Magic Quadrant not as the end, but as the beginning of their due diligence to evaluate this complex market and its major vendors. In addition to understanding vendors' positions in this Magic Quadrant, organizations must conduct their own due diligence and check the providers' references. Gartner recommends that customers also ensure that their business culture is synergistic, or at least compatible, with the culture of their proposed IWMS vendor. Among the most important prerequisites for a long-term partnership with an IWMS vendor are abilities on the part of the provider to work with the client organization's business culture and to work with the client's staff to effect the process changes essential for a successful IWMS program.

A broad range of vendors offer subsets of IWMS services, so this Magic Quadrant cannot include all vendors in the IWMS market. Many IWMS vendors focus solely on parts of the end-to-end IWMS process described in the Market Definition/Description section. Companies considered for evaluation in this Magic Quadrant also act as advisors, and provide implementation services that encompass most or all levels of an IWMS solution, as outlined in the same section.

To be included in this Magic Quadrant, vendors had to meet the following quantitative and qualitative criteria:

  • Quantitative criteria:
    • Robust product offerings in at least three of the five IWMS functional areas: capital project management, real estate/property portfolio management and lease administration, space and facilities management, maintenance management, and sustainability/facility optimization and compliance.
    • Direct revenue from IWMS products and services of at least $7.5 million in 2013.
  • Qualitative criteria:
    • Gartner analysts' interactions with enterprises5 had to reveal interest in or experience with the vendor; alternatively, an IWMS vendor's current and potential market impact, as measured by the frequency of its appearance on customers' shortlists, had to be significant.
    • Demonstrable depth and breadth of IWMS service capabilities.

Evaluation Criteria

Ability to Execute

Rating criteria in this category focused on the vendor's operational viability, financial health, breadth and depth of product functionality, and customer base globally. They also focused on customers' satisfaction with the product, and with service quality and responsiveness.

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product or Service

High

Overall Viability

High

Sales Execution/Pricing

Medium

Market Responsiveness/Record

Medium

Marketing Execution

Low

Customer Experience

High

Operations

High

Source: Gartner (June 2014)

Completeness of Vision

Rating criteria in this category focused on the vendor's specific vision, relative to IWMS product functionality, the positioning of the offering across a number of industry segments, global reach, and the degree and pace of innovation and product development. We have raised the weighting of "Offering (Product) Strategy" from Standard to High because we believe that a vendor's approach to product development and delivery is an increasingly important factor to consider when choosing an IWMS provider.

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

Medium

Marketing Strategy

Low

Sales Strategy

Medium

Offering (Product) Strategy

High

Business Model

High

Vertical/Industry Strategy

Low

Innovation

Medium

Geographic Strategy

High

Source: Gartner (June 2014)

Quadrant Descriptions

Leaders

Leaders have strengths in applications and platform technology; they demonstrate high levels of quality in terms of product reliability and service; they have strong operational and organizational capabilities, financial stability and global reach; and they offer a strong vision of customers' needs, as reflected in a robust development road map.

Challengers

Challengers demonstrate strengths in operational capabilities and have adequate product and service offerings, but they exhibit a narrower vision than Leaders and Visionaries relative to market positioning — that is, they focus on a single vertical market, or position their offerings as a set of discrete applications with minimal effort to package them as an IWMS offering. Challengers may also have weaknesses or gaps in their product or service offerings.

Visionaries

Visionaries have a solid vision for product functionality and service quality, and a clear development plan. However, they have not been fully tested with a significant base of IWMS customers. Visionaries are still sorting out their market positioning and go-to-market strategies.

Niche Players

Niche Players may have adequate product functionality, but they have yet to articulate a clear market or product-positioning strategy. They also are limited to one geographic region, and may have gaps in their product or service offerings.

Context

Why the "I" in IWMS?

We continue to see a distinct shift from the traditional stand-alone functional management areas of project, real estate, facilities, maintenance and sustainability to a more integrated approach: the "I" in IWMS. The benefit of effectively integrating multiple workplace management disciplines, in terms of a multiplication of ROI, is becoming increasingly evident and compelling, given that facilities life cycle costs are typically enterprises' second-largest expense item.1 As the IWMS market continues to mature, we see a growing focus on sustainability and robust GIS-based location management functionality, as well as markedly greater C-level and board-level visibility.

IWMS deployments are typically complex, multifaceted projects that bring significant, costly and often highly visible risks. It is one thing to have an idea of your organization's requirements, see a vendor's product demonstration and decide to acquire the demonstrated functionality; but it is quite another to actually deploy that product within your organization, a task that involves integrating your data and application systems, and, above all, applying your existing business processes. We have seen instances of poorly planned IWMS deployments that have cost more than five times the base license and maintenance costs, and that have wreaked havoc with project budgets, the underlying business case and ROI.

The cloud — which often means true multitenant SaaS — is growing rapidly as the deployment method of choice for many new IWMS projects.

As large multinational organizations are managed on an increasingly global scale, they are demanding a more consistent and holistic view of their global facility portfolios. As a direct consequence, the global capabilities of IWMS vendors are rising in priority as these multinational organizations realize the significant ROI that can achieved by deploying truly integrated workplace management systems to break down the traditional construction, real-estate and FM silos.

Market Overview

The IWMS market exists to enable the efficient, coordinated management of the complete real-estate/facilities life cycle. It consists of integrated, Web-based, modular solutions that cover five core areas: capital project management, real-estate/property portfolio management and lease administration, space and facilities management, maintenance management, and sustainability/facility optimization and compliance.

Current market drivers include:

  • Consolidation among IWMS vendors. This is continuing apace and can be seen as a positive sign of a maturing market. We believe the ongoing consolidation will help the IWMS become a cornerstone of enterprise management systems.
  • The clear trend away from complex, on-premises deployments toward true single and multitenant SaaS-based implementation of IWMSs. This is facilitating more granular, less costly and less resource-intensive projects. Indeed, we believe the cloud's low upfront requirement for budget and resources (relative to an on-premises deployment) is enabling many organizations that lack a "critical mass" to begin with a relatively small, low-cost and low-risk IWMS module that attacks the worst "pain point" (often real-estate management). With that module as a live proof of concept, follow-on modules become lower risk and easier to justify.
  • The continually challenging economic environment. This is driving many organizations to examine closely the massive overall expenditure on the life cycle of facilities.
  • The continued struggle by the U.S. FASB and the IASB to finalize proposed accounting changes. These changes would profoundly affect worldwide corporate finance in general, and real-estate operations in most large organizations specifically by eliminating the off-balance-sheet operating lease. After two major attempts (in 2010 and 2013) at drafting new lease-accounting guidelines were rejected by stakeholders, the proposed changes are in limbo. Nonetheless, during this time the corporate real-estate units of many large organizations have received intense scrutiny from C-level executives, which has lit an unwelcome fire under their real-estate and lease management operations. A direct consequence of this high-level focus on the financial and operational mechanics of the real-estate function has been a rapidly growing interest in IWMSs in general, as well as in real-estate and lease administration and management modules in particular. Bottom line: In light of the current lack of clarity about the future of these proposed changes, our impression is that many organizations have returned the issue to the "backburner"; they continue to monitor it, but with little urgency.
  • The broad scope of the real-estate/facilities "ecosystem." It includes planning, construction, enhancement, real-estate and property administration and management, facilities and space management, maintenance management, and sustainability and compliance. It is, therefore, no wonder that it is second only to personnel expenses on most organizations' income statements, or that it is increasingly visible to C-level executives and the board.
  • Enterprises' realization that traditional organizational silos (such as capital construction, real estate and FM) and their often inefficient systems are ripe for streamlining and automation. Many systems still use Microsoft Excel, for example.
  • Executives' dawning understanding that any tactical IWMS decision must be part of a strategic IWMS vision. Initial IWMS deployments often stem from tactical drivers in an individual functional silo (such as a specific pain point with real estate and lease administration or with FM), but tactical decisions need to be part of a strategic IWMS vision in order to reap the full financial benefits of cross-functional integration.
  • Increased interest in space management. This is one of the hottest functional areas as growing cost pressures drive organizations to identify underused facilities and dramatically reduce occupancy costs by rationalizing and consolidating what are sometimes vast real-estate portfolios. In other words, executives are seeking to use "the right space at the right place."
  • The rapidly evolving trend for an increasingly mobile workforce. This is a core driver of the trend to optimize facility utilization and efficiency. It represents a sea change for many organizations, large and small. Adapting existing work styles — and the facilities, infrastructure and equipment required to support them — to more mobile and virtual workplaces will require much of the functionality currently offered by many IWMS vendors (hoteling, employee self-service, office reservation scheduling and remote workforce support, for example). In this new world, the IWMS essentially becomes a service delivery platform for virtual office workers.
  • The growing need for a worldwide-portfolio view of enterprise workplace assets, due to increasing globalization. Robust global capabilities — such as currency and language translation capabilities, and 24/7 multilingual help desk support — are becoming common requirements.
  • Increasing interest from risk management and disaster recovery/business continuity executives in the comprehensive functionality and accurate and current data that many well-deployed IWMSs can provide. They are attracted, for example, by the ability to identify backup sites, employee locations and critical infrastructure in the event of local or regional interruptions of business.
  • Rapid growth in the multisourcing of facilities and real-estate services. This growth increasingly requires service providers, partners and other contract staff members to have ready access "anytime, anywhere" to workplace data and processes via the portal interfaces that typify Web-based IWMS architectures.
  • The establishment, management and maintenance of sustainability objectives, given that buildings account for about half of all energy consumption and greenhouse gas emissions. These objectives are fast becoming core drivers of the deployment of complete IWMSs. Effective sustainability systems must enable the comprehensive collection of accurate energy consumption and emissions data, as well as efficient analysis and evaluation of that data to facilitate informed triage decisions that optimize long-term sustainability.
  • IWMSs are focusing on parts of the facilities life cycle that come before the traditional design and capital project management phases. A growing number of IWMS suites include increasingly sophisticated strategic-planning capabilities to aid site identification, selection and development. There is growing demand to proactively identify and optimize the most environmentally sustainable locations in which to build new facilities. Considerations such as local energy availability and cost, utility alternatives, water sources, wastewater disposal options and transportation alternatives are becoming integral parts of the more mature IWMS product suites.

Acronym Key and Glossary Terms

ASC Archibus Solution Center
BIG Business Integration Group
BIM Building Information Modeling
BREEAM Building Research Establishment Environmental Assessment Method
CAD computer-aided design
CRE corporate real estate
ERP enterprise resource planning
FASB Financial Accounting Standards Board
FM facilities management
GIS geographic information system
HR human resources
IASB International Accounting Standards Board
IoT Internet of Things
IWMS integrated workplace management system
LEED Leadership in Energy and Environmental Design
PPM project and portfolio management
RFP request for proposal
ROI return on investment
SaaS software as a service
SQL Structured Query Language

Evidence

1 "Driving an Aggressive Occupancy Cost Reduction Program," CB Richard Ellis, January 2009.

2 See "Agenda Overview for the Nexus of Forces, 2014."

3 See "The Impact of the Internet of Things on Data Centers."

4 See "Don't Be Fooled by Offerings Falsely Masquerading as Cloud Infrastructure as a Service."

5 Over the past year, we have taken more than 150 inquiries on IWMSs from our global user client base.

Note 1
Multitenancy and SaaS

A key architectural consideration for some IWMS vendors is a concept called multitenancy (see "How to Evaluate a Vendor's Commitment to the Cloud and SaaS"). Under the SaaS model as seen by an enterprise IT organization, an IWMS vendor offers IWMS applications as a service to multiple customer enterprises (tenants). Tenants are not individual users, but user organizations. Elastic sharing of common underlying computing resources among tenants is an essential characteristic of SaaS and is referred to as multitenancy — multiple tenants share common physical computing resources, while remaining logically isolated. Gartner describes the multitenancy characteristics of SaaS in "Gartner Reference Model for Elasticity and Multitenancy."

While it is possible to offer SaaS without multitenancy, this approach often will not scale efficiently enough for a provider to have a profitable offering. Therefore, vendors that lack multitenancy will likely either have a required minimum number of users or charge higher prices than their competitors. Vendors that deploy a multitenant architecture have a strong commitment to SaaS, and they show how this is more than just a way to automate processes.

Note 2
Configuration Versus Customization

Basic application deployment best practices make a clear distinction between high level "configuration" — the relatively rapid tailoring of a predesigned template for the user's specific workflows, field names and so on — and "customization" — the actual recoding, and in some cases redesigning, of the application to match existing business processes. Gartner strongly advises users of IWMSs to re-examine their business processes and make configuration the de facto implementation standard, and to consider customization only when the required business process is agreed to be a mission-critical element of competitive differentiation.

Note 3
Gartner's Magic Quadrant Methodology as Applied to the IWMS Market

Gartner analysts use a consistent and rigorous research method when creating Magic Quadrants (for a complete explanation, see "How Gartner Evaluates Vendors and Markets in Magic Quadrants and MarketScopes").

For this Magic Quadrant, we evaluated information and evidence from a wide range of sources, including:

  • A detailed questionnaire completed by all 13 vendors evaluated in this Magic Quadrant
  • Interviews with each of the 13 IWMS vendors
  • Detailed questionnaires from 90 customer references
  • 30-min. interviews with 45 of those 90 customer references
  • Independent interviews with vendor customers and competitors
  • Gartner client inquiries on IWMS market issues and vendors
  • Basic research on vendor details sourced from Hoover's, S&P Capital IQ and OneSource
  • Research and findings vetted through collaboration and reviews by an extended team of Gartner analysts

Each vendor was given the opportunity to review a draft of their section of the Magic Quadrant for factual accuracy.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.