Castellum is a Swedish real estate company with properties in 17 Swedish cities together with Copenhagen and Helsinki. Their 650 buildings amount to 4,5 million square meters, 6 000 business customers, and 300 000 private customers. The company’s business focuses on offices and logistics. In addition, they have the company United Spaces in Sweden for coworking, which constitutes a favorable testing ground for new services and business models.
Niclas Ingeström is Chief Digital Officer at Castellum, in charge of digital business development, and board member of 10 companies under the Castellum umbrella. During Sensative’s 2021 Yggio Day, Ingeström held a presentation on Castellum’s digital strategy and how Sensative helps pave the way for its realization.
Below you find a summary of the customer use case. Click here to skip it and go directly to the video.
Castellum has traditionally been an ordinary real estate company, renting out space and not adding any value-added services for their customers. However, a paradigm shift happened when the company decided to invest in digitalization and find new business opportunities through digital services – to become a leader in the modern innovative real estate market. Recently replaced CEO Henrik Saxborn hired Ingeström to revolutionize their business model and left us with a powerful statement:
“In 2030, 30% of sales shall consist of innovative and digital services.”
Considering the size of the company, this is not a small number. From focusing on sustainability to equality, Castellum has now broadened its focus to include services. Ingeström developed a 10-year roadmap, and they are now steadily following its trajectory.
In their digital quest, Ingeström highlights the value of data and knowing how to utilize it properly. He highlights how many companies like to talk about new models and businesses, but very few realize their visions. And for those who do, he sees them focusing too much on technology and less on the actual value. Ingeström states that if you have substantial data on an adult customer, all of its habits, and know how to utilize it correctly, that data is on average worth $35 annually. For their data gathering, Castellum focuses on the 300 000 private customers that visit their buildings daily. With $35 per person, the company is looking at a potential value of about 9 million USD per year.
Castellum’s digital strategy
“Digitalization strategies are boring,” Ingeström says. However, the company wants to implement new technology to make innovations, so they have established a technology and innovation strategy as an alternative. The strategy consists of four parts:
Cognitive buildings are smart buildings powered by machine learning and AI. The buildings not only detect issues but also take proper action when they arise.
Simplify work life
Offering services to upsell to existing customers. Services that make life or workdays easier include furnishing, printing, wifi, and other suitable commodities. The services resemble those provided at coworking spaces, but Castellum wants to offer these to all their customers.
People transformation is all about changing people’s attitudes towards the digital. The company has created an app where they can gather all services to be available, and it simultaneously gives the company valuable information on customer habits.
Thinking outside the box and offering new services and business models.
By simultaneously developing several products to launch, Castellum shows that they genuinely believe in their new business model and dare to make the necessary investments to establish an ecosystem of services in one push. Ingeström highlights their cyclical product development strategy.
Think – communicate – build – test – deliver – follow-up
He explains that follow-up is the most crucial part of the cycle as their products will always remain in the development process – open for revision based on gathered data, customer inputs, and other insights.
The Castellum app
The company developed an app aimed at involving all their business customers. It consists of two parts, one for the coworking company United Spaces and another for their other office renting customers. The interface lets users choose which part of the service they need, and they can also choose to activate both features of the app. Customers can open doors, book working spaces, rent cars, view contracts, and order lunches through the app. Castellum has built the system on microservices from Microsoft’s Azure. It integrates with CRM and finance systems, allowing users to buy with a credit card or put orders on their company bills.
As part of the smart building analytics, Castellum can also send push messages to customers in-app to, for example, encourage users to take the stairs for health benefits when they have used the elevator a lot. In addition, Ingeström underlines that they take GDPR seriously, so all users are anonymous and only have a digital identity.
The digital lock service is called Accessy, and it was developed together with five other real estate companies and two investors who also saw the value in such a service. Accessy is a cloud service, also known as soft service – it integrates with existing lock systems, making it possible to launch remotely. At the time of the presentation, Ingeström says that they will remotely launch the service in 120 buildings.
This service has been an essential component in Castellum’s digital strategy and is the most significant driver for customers to start using their app.
Their smart buildings are cognitive, or self-learning, buildings that will act autonomously to analyze themselves, identify issues and take necessary measures to resolve issues. An example of such a scenario is when a building can identify a door malfunction and send an error report directly to the service company responsible for reparations. Through sensor monitoring and AI, the facilities will also take preemptive measures to avoid energy loss, moisture or water damages, and more. The buildings will also self-regulate to find optimal indoor conditions and energy output, making them ideal for living up to sustainability goals.
Their smart building system and sensor data collection use the standard Real Estate Core data models, also used by Swedish real estate company Vasakronan. They also utilize Sensative’s DiMS IoT platform Yggio for all added sensors (such as motion sensors). At Sensative, we underline Yggio’s main strength as “creating order out of chaos,” and Ingeström explains that the company has already experienced this chaos with all the different systems and devices in use (sensors, HVAC and PLC systems, and more). Castellum and Sensative are in the process of making Yggio become a more substantial part of their operations as their services develop.
Collected data will also be shared with customers to give them feedback on how their employees utilize their spaces and services (door openings, room bookings, and more) and optimize accordingly.
For the backend of all these services and the vast data collection they are to undertake, Castellum developed their AI database management system called Cassandra. For this project, Castellum mainly took help from several startup companies spread out over several countries. Ingeström explains that the company sees a great value in working with startups – they are passionate about innovation and skilled at acquiring funding for their projects.
Cassandra will constitute a vast data lake, partly built on Apache Hadoop, with data on customer behaviors in conjunction with external data about traveling, stock market, business benchmarking, weather, competitors, and more. The idea is to gather all this information in one database and AI system to identify valuable patterns for further business developments while also giving customers data useful for their operations. Cassandra will also be the backbone of their smart buildings.
Transforming customers’ and team members’ attitudes towards the digital is a huge part of successfully launching a digital business model like Castellum’s. This task is the people transformation that Ingeström talks about in their fourfold strategy.
You need to get close to your customers, and their attitude needs to change; otherwise, the strategy fails. Getting close to the customers has to be done through something like an app, as calling or emailing is far from having the same impact on customers’ daily lives, and that app needs to offer something that simplifies their work-life in exchange. Apart from getting customers on board, company staff also needs to embrace the digital, which is why Ingeström spent three months traveling to all Castellum offices to speak about the company’s new strategy. Ingeström explains that the strategy needs to be easy to understand to get everyone in the company involved.
Learning from other industries
Ingeström also sees a great value in learning from other industries. Typically actors in one industry mainly speak to each other, and ideas go around in a somewhat isolated loop within that field. Ingeström underlines the great value in looking at what happens in other industries to inspire their business models and bring new ideas and strategies into his area.