Tales from the Techside

During my ‘digital life’ as I have worked and grown with technology I have seen a number of interesting things happen, ‘quantum leaps’ in thought and implementation. Yet certain puzzles within technology, certain ‘debates’ still rage and always will. My personal favorite is local vs central, or thick vs thin client, or centralized or distributed processing.

Ok, I know that sounds like a jumble of catchphrases, and it is. But let me spend a moment unpacking those terms, and then I will explain why I think this has something very practical to do with the real estate industry.

The question began sort of like this… if you had to crunch some massive number problems, stressing the pure computational power of a computing system, is it better to have one very powerful ‘brain’ (think CRAY computer) or many smaller ‘workers’ tied to one or several brains in a farm or cluster (think of the SETI and similar projects harnessing the horsepower of millions of client pcs spread across the global network).

Now understand that as computing applications have grown and diversified, this same local/central push and pull has been identified… is it best to process that web request on the server side for an optimal but costly to produce and maintain experience, or ship that processing off to each of potentially many more users?

Next understand that this ‘riddle’ is in reality a very fundamental question that impacts many things beyond computing. Reproductive strategy, for instance, employs a similar cost/benefit analysis as creatures emply either r or K reproductrive strategies. ‘Little r’ strategies mean that parent(s) invest a tremendous amount of resources in their very few offspring, whereas K strategies, fish for example, emphasize massive broods of short lived but numerous young. Both strategies make sense, in their way.

Now understand that at different points in time, one side or another usually has the edge. Manufacturing has grown cheap fueled by inexpensive labor and shipping and hardware engineering is in a good phase right now, with few sensible applications challenging the kind of hardware I am writing on (I will leave the question of whether Vista is sensible to after the first service release). As such, local processing has been king for some time. The tide may be turning, however, as we inch closer to an ‘internet operating system or webOS.’

Google has clearly been heading in a trajectory to become much more than just the center of your search experience. They have email that is increasingly sophisticated. Group collaboration, an exceptionally useful document authoring and sharing system, online/offline technologies and more. As internet applications deliver richer content more rapidly using server side processing the computer that you are working on can be thinner and thinner.

What, if anything, does any of this have to do with real estate?

Well, in my opinion at least, we are in the same never ending cycle there. Only now the tradeoffs are ‘local service and control’ vs ‘regional service or control.’

Now what is really interesting is that this particular ‘local vs central’ cycle ebbs and flows with the market conditions. When market conditions are good and revenue is encouraging focus is shifted to local resources and services, as convenience and service level are at a premium. When market conditions are less than ideal, inevitably the examination of ‘economies of scale’ begin. Think of an office space…by having one central workhorse printer they save money in the long run than by investing in a desktop printer for each desk.

The same applies in real estate. It is expensive to maintain distinct entities with overlap and outright replication of services, often in close proximity to each other. This has been referred to jokingly (in this poor market) as ‘mls overlap syndrome.’ There are over 1000 REALTOR Associations in the nation, many of them built to service a unique area.

Under pressure from a struggling market they examining ways that they can continue to provide for their members, and regionalized services is one such way. As a result, many are considering plans to regionalize, with the added advantages of erasing artificial boundaries to the flow of listing content and providing the consumer with the access they are increasingly demanding. Many state boards, including California, are considering state wide data aggregation, syndication, and potentially even providing a statewide MLS platform.

This is a good thing. There is a small and frustrating element of redundancy in some of what boards and MLS’s do. There are economies of scale to seek out and benefit from.

But we must also understand that all real estate is local. This is a truism, but an important one. Economies of scale often erase some of the benefits of ‘local’.

We must also recognize that this is a cycle, and that if we get to where the grass is greener, inevitably we turn around and see it now looks greener on the other side, all too often forgetting we were just there.

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