Standing at the Intersection of Proptech's Future

A common refrain we heard at CREtech’s well-attended gathering of the proptech tribe in NYC this week is that the proptech universe is “filled with solutions looking for a problem.”

The CREtech 2022 confab showcased a proliferation of SaaS-oriented data integration platforms that are gaining wide acceptance as essential tools to manage CRE portfolios and operations—and to glean real-time analytics of the performance of both—all from a dashboard you can access with the device in your pocket.

But when the conversation turned to problems that are desperately looking for solutions—like how to speed up and reduce the cost of construction deliveries, say, or where we find the yellow brick road that leads directly to decarbonization—the data-crunching gurus turn their 8 Ball over and it says: “That’s a really good opportunity for proptech!”

And then, as if on cue, a couple of leading proptech players stepped forward with a way to square the Rubik’s cube of aligning solutions with problems: they’re taking the first steps toward integrating the solutions as well as the data.

A leading provider of construction management software—Procore Technologies—and a leading provider of digital twin solutions—Willow—announced on the opening day of CREtech that they’re partnering to streamline the transition of digital deliverables from the construction phase to the handover and operations phases in a more structured and efficient manner.

According to the partners, their initiative will create a “digital thread” that connects a historical record of construction data—starting with the construction supply chain—to the virtual replica of the built, allowing owners to deploy digital twin smart asset solutions with greater speed.

That may seem like one small step for data integration, but it likely portends a giant leap for proptech, based on Willow’s strategy and the products it has under development.

Kevin Danehy, vice chair, global head of corporate development at Willow, told Globe St. that the digital twin provider has its eyes on a much bigger prize: a “plug and play” platform that will differentiate itself from all of the SaaS-oriented platforms in the proptech market by integrating the best solutions.

“All SaaS products are not the same. They need to be able to plug and play together,” Danehy told GlobeSt.

Willow believes it can deliver this Holy Grail of proptech faster than the current players in building management systems, who logically are in a position to put the pieces together but, according to Danehy, are not inclined to do so.

Danehy, who came to Willow from Brookfield, also doesn’t think CRE giants like Brookfield will partner with a BMS company to try to beat them to finish line with a plug-and-play proptech solution.

“The challenge for them is that these companies have massive businesses, built on the tradition of selling the equipment and service contracts—and of keeping control of all of the data that is generated by these systems exclusionary even from the [property] owners,” the Willow vice chair told us.

“They’re typically resistant to a plug-and-play open source model,” Danehy said.

Danehy also divulged that Willow has an ace in the hole: the digital twin provider is partnering with a tech giant with vast experience copying the most successful programs built by other tech companies and successfully integrating them into its own bundled solution.

The tech partner also has a growing cloud computing business that embraces the plug-and-play credo, Danehy said. Willow is not ready to publicly identify the company, but we can give you a hint based on everything he told us:

The founder’s mother worked at IBM and told them her son could build an operating system for their new personal computer, which in the early 1980s was a bulky desktop unit the size of a small refrigerator.

IBM thought their logo on the boxy unit was far more valuable to the PC than the operating system running the microprocessor—the worst business decision in the history of business decisions—so they gave the kid a shot.

Then his father bought some geek’s code for $25 million and gave it to his son, who brought it with him for his job interview along with a really bad haircut. The rest is history.