At the start of our project we had managed to secure 4 desks all in the same cell where we could sit together. We even had a wall chart which we could use for drawing on during discussions. Then phase two of the moving in of other projects into this building was completed and all of a sudden we found that unless we turned up at 7am, our places had been taken by other people. While that's fair enough since its a "hot desking" office, its interesting to watch the impact it has on team morale.
Its surprising how defensive people become over territory, although only natural I guess (a bit of a cave man instinct).
It also give people a reason to waste up to 15 minutes a day searching around the office for somewhere to sit. And they no longer need an excuse to start moaning. Every small annoyance that they have is just that little extra they need to take them over the edge and start complaining out loud, or complaining about the project, or worse, complaining about team members. The morale has started to suck, although at times the team actually bonds stronger because we can all be defensive over our "office" together.
My opinion is that hot desking does work, but it depends on the situation. By its very essence, at team of people developing software need to be together, in a somewhat insular way. It aids bonding and communication. They need a certain level or routine and having not to worry about where you sit when you arrive helps that routine get underway.
I have successfully worked with hot desking in two different circumstances. The first, each team was allocated desks for a fixed period. As soon as a project finished, or as soon as a person left the project, that desk was no longer available to the project. But it was acceptable to move people around in order to ensure teams sat near each other.
The second successful implementation was where we were all consultants visiting head office once or twice a week. In such a case you dont need a fixed desk, and hot desking is perfect.
One thing is for certain: hot desking should not be considered a way to cut building rental costs by only providing the average amount of space/desks used. That is useless on the days which more than the average turn up! And it only takes one person to sit out of place to force a ripple effect whereby theoretically every person in the office has to sit at a new desk compared to yesterday.
What is interesting is that the people who made the decision to implement hot desking have absolutely massive offices spread around the edge of the floor. Sorry, but my expertise lies in successfully developing software for my clients. I do not need someone with a title to come along and tell me I must abide by his hot desking rules, when he has no understanding of its effects on my deliverable. Unless of course he appreciates its effect and provides me with an additional budget to pay for the over runs which the dent to morale will ultimately lead to.