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A senior executive of a major integration product manufacturer recently stated, “Within five years, most commercial building integration products will be sold through two-step distribution.” This may be a surprising prediction to many, but not to the companies that are already utilizing distributors to market their open systems products.
The Next Generation in Distribution
The traditional HVAC/Controls wholesaler of the past was typically viewed as a “parts house” where a contractor could swing by and pick up what he needed to finish a job. However, many distributors long ago began to add value to their customers by offering “parts and smarts.” Honeywell’s channel of Authorized System Distributors, ASD’s, have provided systems support successfully for years. From this pool of distributors with systems experience, there has emerged the next generation in the two-step model - the Integration Distributor.
Why is the Integration Distributor becoming the preferred channel for open systems products? As we all know, technology is changing the building automation industry at blinding speed. Integration allows a high level of connectivity for a variety of products from multiple manufacturers. Though the IT staff may work their magic to maintain a network once it is up and running, someone has to first sell the concept and explain how it will work to the building owner. A contractor must then install it.
Owners are becoming increasingly aware of the building automation options available to them. Many now know they are no longer “locked in” to one manufacturer. Building engineers are looking for a resource with expertise from multiple manufacturers to provide them with integration solutions to network multiple buildings, multiple floors and multiple systems.
Contractors who install integration products are often referred to as Systems Integrators. Though that term continues to evolve with the industry, we all know eventually someone with a truck must show up to do the installation. Those installers face a difficult balancing act as they seek to stay up with technology without losing excessive amounts of time off the job site to be trained. They also need a resource with expertise for the many issues that arise with open systems.
Integration product manufacturers have discovered the Integration Distributor will commit to the training and certification needed to provide solutions with their products to both the end user and contractor.
Restricted Products and Certification
With the advent of the Internet, an increasing number of HVAC products and even controls are available to almost anyone. However, at the integration level of building automation, manufacturers, distributors and contractors are all partnering to assure the end result that they each must see; an installed system that works. As a result, at all three levels in the channel, product restrictions and certification are essential and are rigidly maintained to assure devices end up working properly.
Factories require and provide certification training to both distributors and/or contractors for virtually every integration product. Distributors also regularly provide and fill their in-house training rooms with contractors who are required to be certified by them. It is this program of restricted products that are available only to authorized distributors and their certified contractors that assures building owners everything they purchase will do what it is supposed to do. Contractors unwilling to invest in the necessary training to install open systems products will find their Integration Distributor unwilling to provide them with those products. Though most products seem to move in the direction of becoming commodities, at the integration level this may not be the case.
The Integration Distributor of today is still a parts guy for commodity products. However the IT staff, engineers and programmers in the offices around the corner from the parts counter are strong indicators there is more going on than first meets the eye. Integration Distributors now sell both parts and engineering services, commodities and open systems front ends and they are very aware that integration level projects can only be installed by certified contractors. As we are all being educated about the swift changes taking place in this industry, news of the role of the Integration Distributor in intelligent buildings is getting out.
The Preferred Channel
A dilemma for the industry is the slow adoption of the intelligent building opportunity. Certainly part of the problem is the struggle building owners have in getting answers they can understand. Contractors need answers as well, and they need them today. Both are turning with increasing frequency to Integration Distributors to help them unravel complex automation issues and provide solutions. Integration Distributors understand, stock and support multiple manufacturers and they are committed to finding the best products for an application regardless of who makes them. They are committed to maintaining factory standards and restrictions for the long-term success that distribution requires.
Not surprisingly, a number of the parts distributors of yesteryear have emerged as a valuable component in the technical world of open systems. For manufacturers to train and support a national network of contractors at the integration level is a monumental task to say the least. With local distributors who have an established base of contractor customers who already turn to them for training, support, warranty service and product recommendations, the two-step channel is the natural fit for integration manufacturers.
Controls Group North America (CGNA) in Brea, California, is a network of 35 independent wholesale HVAC/R Controls Distributors with 125 branches throughout the U.S. and Canada. Many CGNA Members provide products, support and engineering services for open systems.
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