The Impact of Software Development Business Processes on Office Space Demand and Design

Software technology companies seek to follow the lead of Google, Facebook, Pandora and other successful technology companies with amenities and an open-office design that reflect the company culture. Efforts to attract the millennial generation, retain employees, decrease overall office space size, and increase employee performance may be driving this trend. However, there may be an alternative explanation driving the commercial real estate decision that is tied to the chosen daily business processes of a given company in technology sector.This research explores the connection between the software development processes, agile and waterfall, used by the software technology companies and their corporate real estate (CRE) needs. A questionnaire is used to gather real estate demands from fifteen randomly selected technology companies in Charleston, South Carolina, at three stages of growth – small, medium and large. The survey was developed by interviewing local brokers, architects, and interior designers in order to identify questions that would provide a meaningful dataset on the CRE demands in question. These demands include both quantitative and qualitative measures including square footage per employee, furniture design, additional amenities offered to the employees and office layout. Our primary question is does the business process chosen by the technology companies matter? We expect to find that technology companies using primarily agile processes, which require regular collaboration between employees, would use less square footage per employee due to a shared, flexible, and open office design. Whereas, companies mainly using waterfall processes, which require more heads-down work and less frequent collaboration, would have a higher square foot per employee ratio because of a more private, permanent, and closed office design. Results from this study will be useful for many real estate stakeholders including the tenants/corporate users, brokers, architects, interior designer and the real estate investment community.