The Sharing Economy Helps Firms Make or Save Money

By Tony Kontzer  |  Posted 2016-06-02 Email Print this article Print
 
 
 
 
 
 
 
Sharing Economy

Companies need to monetize their excess capacity, including their excess data center, warehouse or trucking capacity. Name it, and you can probably share it.

Sharing has become all the rage in business these days.

Whether they're making their unused resources available to other organizations or tapping needed resources themselves, companies have gotten busy putting one of childhood's earliest lessons to work. And they're finding that strategic sharing can result in new revenue sources and/or save organizations from having to make significant capital investments.

This so-called "sharing economy" is a reflection of the shifting sands of business today. The effects of globalization and technological innovation are forcing companies to tackle new markets, offer services to complement their products and vice versa, and even redefine the meaning of the word customer in order to stay competitive.

Sharing—which is basically a way to buy, lease or sell unused resources—has emerged in this fast-changing environment out of necessity. Companies have to try to monetize their excess capacity in whatever form it takes: excess data center capacity, excess trucking capacity, excess vehicle fleet capacity and excess warehouse capacity. You name it, and it's probably being "shared."

"It doesn't matter what industry you're in," says Federico de Silva Leon, a research director at Gartner. "You'd better be thinking about how you can resell your computer capacity, your office capacity, your vehicle capacity."

In fact, de Silva Leon says excess capacity is the underlying theme of the supply side of the sharing economy, while avoidance of capital expenditures drives the buy side. Viewed from that lens, the sharing trend can be credited in part to Amazon, which a decade ago introduced a completely new way to meet the demand for computing resources by turning its own excess network capacity into a thriving, very profitable cloud service.

Since then, however, full-blown sharing economy business models have emerged. Market disrupters like Airbnb and Uber have allowed consumers to make extra money by renting out their homes when they're away or by sharing their cars when they'd otherwise be sitting idle. Meanwhile, business-to-business plays like Cargomatic and Flexe are enabling companies to do the same with extra space in their trucks or warehouses, respectively.

Taking the Sharing Business Model a Step Further

Then there's a company like WeWork, which has taken the sharing business model a step further by establishing elaborate communal offices in hot spots around the United States, enabling startups to reside in locations they'd never be able to afford themselves, while more established enterprises tap the spaces as a cost-effective way to establish beachheads away from headquarters.

One such large enterprise is computer-maker Dell, which has become a "member" of WeWork spaces in Chicago, New York City and South Beach, Fla., and will soon add to that list Austin, Tex., which is just a few miles north of the company's suburban Round Rock headquarters. Doing so has enabled the company to set up shop in locations that otherwise would be cost-prohibitive.

While part of the purpose of these spaces has been to establish technology labs where Dell can show off its wares, especially to other WeWork members, the spaces are proving to be important on another front: as a tool for recruiting talented young people.



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Tony Kontzer has been writing about the intersection of technology and business for more than 20 years and has been a regular contributor to Baseline since 2007.

 
 
 
 
 
 

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