WeWork joins tech companies’ rush into office software as its share

WeWork executives say co-working spaces can help bring employees back to the office by providing an app that lets employees reserve a conference room, post a corporate ad or sign up for a yoga class.

“Companies of all sizes understand that people don’t come in every day,” said Scott Morey, president of technology and innovation at WeWork. The sea change in the workplace has created challenges that require digital solutions, he said.

But WeWork isn’t the only one looking for new business opportunities amid the turmoil in the office and space industry ravaged by the pandemic. Competitors that offer a variety of app, data, telecommunications and other software include technology companies such as Cisco Systems. Inc.

and Honeywell International Inc.

And startups like VTS and HqO.

Mr Morey said: “The competition is still early.

In the early stages of the pandemic, as employees shifted to work from home overnight, technology companies scrambled to help businesses prepare for health, safety and telecommunications systems. Brewing company Heineken NV, for example, has used the HqO office app to maintain safe living standards and maintain social distancing, said Stephan Ottenhoff, Heineken’s digital and technology manager in the Netherlands.

Lately, tech companies have been trying to help businesses and landlords slowly reopen traditional workplaces. Most businesses have adopted hybrid strategies that combine office work and remote work, forcing management teams to rethink conference rooms, design, security, scheduling, food, air quality and other office needs.

Cisco is trying to meet this need with a variety of services, including a device that cancels background noise in teleconferencing systems and monitors employees’ use of conference rooms and other office spaces. Cisco has added all the technology it uses as a showcase to sell these services to its New York offices.

Honeywell,

Meanwhile, it has tried to capture market share with software such as People Count, which keeps a real-time record of how many people enter and leave the office.

Other tech companies are helping businesses and landlords convince employees to return to the office, something many are loathe to do after more than two years of remote lifestyles. Office applications and accompanying information tools are designed to overcome this objection by making the workplace more enjoyable, efficient and secure.

The size of the office-software business is difficult to measure in part because it is so young, but participants estimate it to be in the billions of dollars.

The release of WeWork’s workspace-software service marks the latest milestone for the company. WeWork had shaken up the office and space business in the years leading up to the pandemic, but a planned initial public offering in 2019 turned things around dramatically.

Since then, a new management team has cut costs by shedding several leases. Last October, WeWork went public with a merger with a special purpose acquisition firm.

But the company’s stock, which hit a peak of $13.18 in October, has fallen below $5 in part because the company continues to operate at a loss and is still saddled with $2.4 billion in debt due by 2025, analysts said. Tell them.

Some analysts don’t expect WeWork’s new workplace-software offering to be much help.

“This looks more like a shift away from a bad business model than anything else,” said David Coach, CEO of investment research firm New Constructs.

But Alexander Goldfarb, senior real estate-investment-trust analyst at Piper Sandler, predicted that ramping up new operations such as WeWork Workplace and reducing cost margins will help WeWork become cash-flow positive by 2024.

“WeWork is a great outfit for companies and small businesses that want flexibility, especially when you’re trying to figure out what your office needs,” Mr. Goldfarb said.

Write Rebecca Picciotto at rebecca.picciotto@wsj.com