Originally, the ‘as-a-Service’ (aaS) acronym was used within the context of cloud computing (e.g. Infrastructure-as-a-Service, Software-as-a-Service) in which pooled computing resources are made available at scale to customers as a Service, with all the necessary maintenance and support built-in. However, this idea is now increasingly being applied to other verticals, whether it be mobility (MaaS), energy (EaaS) and now also (co-)living (LaaS).
Currently, from the 2 billion households worldwide, are one-person households (OPHs). In the Netherlands there are (36% of the total households), which is expected to grow to 3.4 million OPHs in 2030. This group, mainly consisting of young students and workers, are increasingly interested in alternative living solutions in order to face the challenges of modern life.
- Big tech companies are increasingly becoming one-stop-shop service providers by tapping into more and more verticals (commerce, entertainment, mobility, health). The pinnacle of this trend is the convergence with the physical living environment by involving itself with real estate development. With Sidewalk Labs, Alphabet aims to improve the quality of life in cities through the power of software. Similarly, Amazon invested in Plant Prefab, a Californian housing design and prefabrication company with the plan to integrate their services (e.g. Alexa) in easy-to-build real estate.
- The aaS trend also shows itself in narrower domains. Energy companies are increasingly offering , in order to help customers with becoming sustainable, saving cost and the energy transition. Similarly, Uber is well known for their car hailing service, but are now increasingly investing in facilitating other modes of transportation (e.g. scooters, helicopters).
- Accenture has written a report on in which services continuously adapt to the user’s ergonomic, operational and psychological needs. According to them, the ‘digitization of everything’ and the ‘liquid expectations of consumers’ are important underlying drivers.
- The Collective a 350k square foot lot at 555 Broadway for $450 million with the aim to develop a co-living space. The Collective has 6500 units in the UK, Germany and the U.S. with nearly $700 million raised in capital.
It is no coincidence that the cloud era introduced the concept of ‘as-a-Service’. It made us aware that economies of scale and zero-marginal costs of IT, combined with the decoupling of ownership and function allowed for frictionless service models. In its slipstream, we can now see the adoption of this model in other domains. Especially industries that benefit from digitization and in which costs of logistics can be significantly reduced through scale (e.g. mobility, energy) are first contenders.
Going forward, there are potentially two strategies for aaS providers: either aaS providers have to become holistic one-stop-shops for customers, thereby entering the LaaS battleground, or they will have to become a more narrow interoperable aaS provider.
Our daily lives are increasingly approached with the ‘as-a-Service’ mindset. In other words, companies are trying to increase the perceived value of our daily lives (or from an economic perspective, increase our real disposable income) through the power of IT, economies of scale and integrated scalable services. The first experiments are found with co-living and co-working companies who are trying to address the challenging demands in real estate due to increased urbanization and a growing number of one-person households. Hence, companies like WeWork/WeLive, Ollie, Common, The Collective and Starcity are strategically expanding in the direction of IT, real estate design, efficient shared allocation of resources and integrated services in the hope of becoming a one-stop-shop living-as-a-service provider.
Unsurprisingly, we also see that the big tech companies are progressing in this direction, as they have naturally already been tapping into different domains of our daily lives. However, where co-living spaces try to claim living-as-a-service through the hard-to-scale physical real estate side, tech companies approach this domain from the scalable virtual side. Yet, as , tech companies are now also increasingly involved in the physical aspects of the business, either through real estate development or by developing all the necessary hardware interfaces for a Living-as-a-Service proposition (e.g. home-assistants).
Going forward, there are potentially two strategies for aaS providers: either aaS providers have to become holistic one-stop-shops for customers, thereby entering the LaaS battleground, or they will have to become a more narrow interoperable aaS provider. The underlying driver is the promise of any aaS provider to reduce costs and/or experienced friction which through heavy competition in the future will lead to ever higher expectations from customers. Hence, in fulfilling that promise, aaS players could either broaden their services (Uber going from cars to mobility, or Amazon going from commerce to living) to deliver frictionless holistic solutions or commit to standards for interoperability so that it can work together with other verticals to facilitate a frictionless life.