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In a way, there’s nothing new about one manufacturer buying components from another manufacturer and using them in a finished product. But these partnerships are different from what’s happened in the past, at least in the facility products arena. Many experts believe that the building products market is on the verge of transformation.
Thanks to Web-enabled systems and widespread use of BACnet and other standard protocols, it’s much easier to connect systems than in the past. And there’s a growing recognition that data can be a powerful tool to improve building performance. Meanwhile, advances in hardware and software have provided powerful new ways to gather and analyze data, like advanced sensors and analytics, while falling costs have made those options more affordable. And because organizations increasingly understand that their buildings can be a means to address priorities like cost control, carbon emissions reductions, and the need to compete for talent, industry sources say they’re seeing a greater openness to — sometimes even a welcoming of — new technologies.
Perhaps because technology has quickly disrupted industries like lodging, taxis, and media, tech companies are moving aggressively to find partners that can help them establish a place in the facility market. Large hardware and software firms are reaching out to building product companies to explore opportunities, says Paul Rauker, vice president and general manager, Daikin Applied Systems & Controls.
When other companies want to talk, Rauker is willing to listen. “I think we have to be open in looking at how we can play with other noncompetitive providers,” he says. No company can be an expert in every aspect of building technology. “But we should be experts in how we play with others,” says Rauker.
And it’s not just established firms that are looking to make connections. “I don’t think a day goes by without me getting a couple of” queries from startups about working together, Rauker says.
Daikin Applied worked closely with firms ranging from Intel to a small company named Riptide to develop its Intelligent Equipment line.
To some extent, all of this may become a self-fulfilling prophecy. While it takes far longer for new technologies to become widespread in the building market — because of costs, long life cycles, and a low tolerance for risk — the volume of sophisticated new Building IoT offerings, partly enabled by the new partnerships, makes it more likely that a facility manager will find something that meets a particular need.
“Alliances and partnerships between various stakeholders along the IoT value chain play an ever more critical link for unlocking new opportunities,” says Marc Petock, vice president, marketing, Lynxspring.
Partnerships may also make it easier to afford some of the new Building IoT offerings. In the tech arena, the SaaS model — software as a service — is well established. Instead of buying software, the customer buys a subscription to the software. “You shift what used to be CapEx to OpEx,” Shepard says. He sees the opportunity for the building products market to move toward SaaS. Already, some Building IoT solutions are SaaS-based. A company like Dell could accelerate that shift.
Given historically tight facility capital budgets, a shift to SaaS could open the door to more Building IoT projects.
“Dell Financial Services is essentially a big bank,” Shepard says. Dell already leases everything from computers to equipment for the data center. “If you wrap up software packages combined with the hardware and you make it more of a monthly kind of OpEx thing, it changes the game.” It’s conceivable that Dell, along with its partners, could fund full building product packages, Shepard says. Some OEMs could do that on their own. Even system integrators could get into the SaaS game.
“It enables new usage models,” Shepard says. “It gets you into an opportunity for people to not have this big leap of faith that they’re going to have a return.”
Revolution in product development
It’s not just hardware and software giants that are accelerating the move to the Building IoT. Companies like Ayla, Lynxspring, and Sierra Monitor are IoT-enablers, with technology that traditional manufacturers can incorporate into new products to give them additional intelligence and enable them to play on the Building IoT.
“IoT is fundamentally revolutionizing the way products, equipment, and services are created,” says Petock. “As new products are being brought to market, they are being IoT-enabled.”
For example, the manufacturer of a line of air-handling units or water heaters might use third-party technology to make it possible for those products to connect, not just to a BAS, but directly to the manufacturer’s command center. There, Petock says, the units could be monitored for anomalies while performance is compared against benchmark data for signs of an impending problem.
Opportunities for partnerships are one reason it’s much easier for a Building IoT startup to get established today, says Aaron Lapsley, vice president of engineering services for Switch Automation, a young company that offers a data integration platform. “There was a huge barrier to entry prior to there being cloud services,” Lapsley says. His company is an Azure partner with Microsoft. “Azure comes along with a lot of benefits of the Microsoft ecosystem,” he says. “We utilize a lot of those things.” One example is cyber security. If he is asked about, for example, cloud data center security policies, he can point to all the measures that Microsoft has in place.
On the hardware side, Switch redesigned its gateway to comply with Intel specs last fall. “(Intel) helped us massively with figuring out what we needed to be part of our architecture for the next generation of our gateway,” he says. “They know and freely admit they’re trying to get more and more chips into more and more things. But they’re trying to foster an ecosystem that makes sense.”
Industry-wide cooperation in the form of standards will be essential if the Building IoT is to reach its potential. The Cisco digital ceiling, for example, is based on IPv6 (the latest version of the Internet protocol) and COAP (constrained application protocol, a web-transfer protocol for the IoT). “On top of COAP we’ve proposed an information model, so lighting (or other systems) from one vendor can be controlled by another vendor,” Baekelmans says. The use of standards, he says, “makes it easy for people to create new applications.”
Ultimately, standards will be essential if the facility arena is ever to see anything like a building version of the App Store, where facility managers can find a wide selection of applications that will work with the systems in their buildings. To reach that point, there will have to be enough Building IoT devices, systems, and platforms sharing a common foundation that it’s worthwhile for software developers to build apps on that foundation. “You want it to be open, but at the same time you want clear definitions in how things are exchanged and how they become interoperable,” Shepard says.
Behind all the partnerships between building product manufacturers and technology companies lies the fact the amount of data available from buildings is enormous and underutilized. And the emergence of the Building IoT means that the volume of data is on a growth path. “We believe the next level of significant gains and opportunities lies within the data,” Rauker says. The goal, and the challenge, is to take the data, filter it, and “bring it into what I call a value-driven event” — an action that improves performance. How well manufacturers can capture that opportunity for adding value will go a long way to determining how quickly Building IoT technology transforms the market.
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