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Article -August 2002
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The Business of System Integration

John J. "Jack" Mc Gowan, 
CEM Energy Control Inc
..
Contributing Editor


The challenge for readers of this article is to revisit your definition of system integration and take the time to bring the full scope of services that you offer into better focus. 

Over the years the term "System Integration" seems to evolve and change in definition. Much as the term Direct Digital Control evolved, beginning as the definition of control apparatus applied directly at a piece of equipment, and ultimately describing microprocessor based devices with standardized communication networks and access via the Internet.

CatNet Systems Early definitions of the term System Integration actually referred to what we call today Building Automation. These systems combined HVAC control with Fire / Life Safety and Security systems. The actual integration of control sequences ranged from extremely limited, to complex approaches for smoke evacuation and after hours access sequences to selected areas of a building. Over the years a new breed of controls contractors, or System Integrators, has evolved as well, one that specializes in integration. In fact a new study has changed the author's thinking about system integration and the Integrators that specialize in it. This study published in the July Issue of SDM Magazine, a BNP Publication, presented System Integration as a business rather than a feature of Building Automation systems. It reported that the 100 top System Integrators in the United States generated $2.4 billion in 2001!  This is a dramatic piece of information, especially when the article also points out 33% growth from 2000 to 2001.

Of particular interest for this article is to analyze what type of business is being done by these System Integrators. The author's observation is that there are actually three different types of Integrator:

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For this article, there is little to be said of companies that specialize in combining legacy DDC systems together or with new standards based systems. This form of integration has been common for more than a decade. There are a number of software-based and hardware-based approaches to implementing such systems. Ultimately the approach is to implement custom gateways, or to leverage the large number of "drivers" available in the marketplace to allow interface between systems. Over the years there have been many companies that have shared protocols to build drivers, as well as numerous companies that have been backward engineered to provide interface. This is a complex area and a fairly well-defined market, though interestingly it made up a minimal part of the SDM study. In fact a careful reading of the study did not indicate that such revenue was likely even considered. It is clear however from a review of the Building Automation industry that this is a strong market niche.

As it happens a vast majority of the revenue reported in the SDM study appears to have been generated from companies that combine Fire / Life Safety and Security systems with the potential for HVAC control as well. It is possible that some of this income could have been derived from integrating Legacy Systems, but that is not clear. Of significance is that integrators saw a major increase in CCTV Security and Access Control, and that, of the Integrators surveyed, 42% of their revenue was generated from integrated systems. An important note is that integrated systems are primarily defined as systems that communicate and allow for linked control sequences.

The third topic of interest for System Integrators was made up only 1% of the revenue reported in the study and that is Energy Management. This type of Integration is beginning to be known as Enterprise Energy Management. At its' most elementary level this is primarily a technology that allows for monitoring of utility meters and provides the basis for utility purchasing in deregulated electric markets. This author's definition is much broader however, as true Enterprise Energy Management should allow for full scale integration of building systems, as well as utility procurement and even offer the potential for effective use of onsite generation. This is clearly the future of Energy Management and expands the definition of System Integration to its logical conclusion. It also demands that the System Integrator be a Network Integrator as well, and that creates a requirement for control contractors to add new tools and capabilities. Two seminars are registering now to begin in September, a new session of "Open Systems for Building Automation" and a new seminar "HVAC Controls". A seminar is also under development for November on "Direct Digital Control". Finally, the author will be teaching an AEE Seminar called "Real-time System Integration" in September. The seminar will be offered "on ground" in Baltimore September 19 and 20 and registration is available online at www.AEEcenter.org.

In the final analysis, the SDM study is important because it considers System Integration as a business and that serves as a catalyst for strategic thinking about the future of our industry. Of great significance to this author is that $2.4 billion is a huge market, but much of the work of Building Automation Integrators, as opposed to Security and Fire Integrators, is absent from that market estimate. The challenge for readers of this article is to revisit your definition of system integration and take the time to bring the full scope of services that you offer into better focus. There are likely opportunities for contractors to bring new value to their customers through integration. At the same time, owners who have trusted suppliers in the Building Automation Systems business should look at how they can enhance management of their facilities by integrating other systems that have been traditionally considered as stand-alone. As an example, my company is nearing completion on a project that includes: central plant retrofits, campus-wide automation with interface to an Ethernet LAN and Access Control. The next phase under consideration will include CCTV security and monitoring. All of these systems will be integrated and available to the owner through an Internet-based interface. This is system integration by one definition presented here, and yet there remains significant opportunity to further integrate electric and gas energy supply and management. It is exciting to see that system integration has been elevated from a concept to a business specialization, now the job for the industry is to harvest the greatest possible benefit from this specialty.


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