Software is one of the only industries where the term “legacy” comes with a negative connotation. This is due to the fact that most legacy companies were born in a world where user data was locked into their platform, creating a competitive moat against younger competitors.
The term for this in technology is “stickiness.” The term is quite succinct because not only does it imply the inability to part ways with something, it also has an element of annoyance. Keeping users on your platform not because they love your platform but because they don’t have the ability to easily leave is annoying, if not infuriating. Still, this was the power dynamic in the early days of software where products were sold as one-time product purchases and cross-platform functionality was not the norm.
In the real estate technology space, not all legacy companies are committed to locking up data in “walled gardens.” MRI Software is about to turn fifty, a dinosaur in the software timeframe, but is pioneering a very progressive approach to the way they do business. They have over eighty technical integrations with other software and today are announcing that they will be adding capital planning solution Honest Buildings to the list.
I spoke with Ben Berk from MRI Software’s partnership and business development team to get a better understanding of how this legacy company was able to change its legacy thinking. “My group was started about 5 years ago to partner with other companies and ultimately try to create a better experience for our clients,” he said. “People are expecting their enterprise application to function like their personal applications and everything should work together. One of our clients in the U.K. told us that they use around 300 applications to run their business. Our thinking is that this can’t remain this way.”
So, MRI Softwarehas been aggressive in creating data and interface integrations with all types of other software, even if they have a competing solution. “We partner with companies that have direct competitive overlap. We just announced an acquisition for resident screening company. We have partners in the same space but we want to keep them on equal standing as our offering. Our clients can go into our software and set up an integration and they can choose which they want,” Ben explained.
While on the surface it might seem like this promotes a competitor’s product and gives up some of their competitive advantage Ben points out that in the end it helps them create a better product which, after all, is what drives sales and retention. He said, “Operating this way has brought a lot of insights our way. A lot of our partners that have come into the program have come from suggestions from our clients. The legacy thinking that you have a stranglehold on clients data is not going to be a viable business model for much longer. Companies like Salesforce has been incredibly successful by being a hub and helping to provide tangential needs to a CRM.”
What companies like MRI Software understand is that data can only be locked up for so long. New technologies and well-funded competitors are always looking to break down the data silos that legacy companies have worked so hard to protect. Once that happens it is innovation and execution that will ultimately be the key to long-term profitability. He cited their success in creating useful tools as a sign of success. “We have integrated with AvidXchange for a long time,” he told me. “They do automated AP payments and they do it incredibly well. We had integrations with them but we came to the understanding that our clients didn’t want to jump in our of different platforms and have to login each time. They just wanted to click the button and have it work. So we worked with them to ensure that from a user perspective it is just a one-button click to have it done. That helps our platform out a lot and it came from our partnerships.”
As for Honest Buildings, he thinks that the information that they are getting from tracking and optimizing the capital planning and construction process will help them create a lot of value for users, “With Honest Buildings we are working to not just move data but also exploring what we can do with both of our data to create insights that didn’t previously exist.”
Now that most software is sold as a service, people are increasingly able to switch their providers. So, just like in the service industry, it is really about which company is able to provide a better experience for their customers that determines the winners from the losers. If the other old guard companies in the real estate software space start to adopt this same kind of thinking we might all start to change the way we feel about the term “legacy.”