March 2012
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Innovation in Energy Management

What is it that makes EMS available to the previously inaccessible 95% of the market? 

Shane Mericle

Shane Mericle
COO
Incenergy, LLC

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On a regular basis I am asked a common question regarding our company’s market and capabilities.   The conversation often starts something like this: 

<friend> “So Shane, what do you do for a living?”
<me> “I work for a company that provides energy management solutions for small to midsize commercial buildings.”
<friend> “Interesting, what makes your company different?”
<me> “Well, we’ve innovated and simplified the products and services to make them available to the 95% of the market which previously did not have access to energy management.”
<friend> “How have you gained access to a previously inaccessible 95% of the market?”  

And so the conversation ensues, discussing all the things I love about technology and new markets.   In this article, I will attempt to describe the evolution and innovation that is making energy management a viable option available to so many previously inaccessible small and midsize building owners.   Additionally, I’ll spend some time explaining the technologies and innovations.   My guess is many of these innovations are probably not a part of every HVAC professional’s or building manager’s standard knowledge suite.

First, let me clear the air regarding traditional Building Automation Systems (BAS)/ Energy Management Systems (EMS).   This market is a mature, well established, high function, feature rich set of products providing a necessary solution for a long standing problem set in the large building market.   I will not consume your time with the details of this market for two reasons:  first, the large building BAS/EMS market is generally well understood by the target audience of this publication; and second, these systems are not particularly germane to the subject of this article, innovative and disruptive technologies in small to mid-sized EMS.  In a moment, I will briefly describe some of the reasons traditional EMS is not a good fit for the SMB market.

I’ve used the term “small to mid-sized building” (SMB) several times.  Although most of you probably know what this is, let me embrace my insecurity and just be clear what I am referring to when I make this reference.   I am technically referring to commercial buildings that are 5,000 to 150,000 square feet.   Historically, this market has not had viable access to energy management systems because traditional EMS did not provide a return on investment that was acceptable to building owners or managers, much less tenants.   I believe, in order to be considered a viable product for the SMB space; the simple payback must fall inside of 24 months.   Traditional EMS systems have difficulty meeting this 24 month simple payback requirement because of all the usual suspects: 

You may read this list and say I am “picking” on traditional EMS vendors.   Not true at all.  Most of the bullets above are a result of the market they serve, the requirements necessary to compete, and have success in the large building EMS/BAS market.   Unfortunately, they are also the very things that make them not attractive or viable for the SMB.

What is it that makes EMS available to the previously inaccessible 95% of the market?   Technology innovation is the answer.   In my opinion, there are several key innovations currently in the maturation stage of their lifecycles opening this market up for SMB.   These innovations are as follows:  

I will address each of these in more detail in the following paragraphs.

CatNet Systems Low Cost Low Energy Radios:   Innovation in the wireless radio space - what many people do not know is this space has been developing, growing and innovating for a couple of decades.   There are myriad reasons for developing industrial wireless radios.   These are not the traditional radios you may be thinking of, which manage the communications between your cell phone and a cell phone tower.   These are small industrial radios which manage much more mundane types of communications like information on fluid levels in remote storage tanks and reporting line pressures in remote pipelines.  These industrial markets drove down cost and improved efficiency as part of the natural lifecycle.  

Key characteristics of these radios are:  small size (about the size of a quarter), low cost, low power, secure networking.  This small form factor coupled with an indoor range of 100-300 feet make them well suited to EMS applications, since they can easily replace the heavy wiring needs of traditional EMS systems.   Their low energy consumption and small form factor make them a great fit in many of the wireless EMS devices such as thermostats.  Furthermore, these radios make retrofit EMS installations very attractive for the customer because the installation cost is a fraction of the traditional wired installation costs.  

ZigBee Mesh Wireless Protocol:   ZigBee Mesh is a communications protocol, which works particularly well with the small radios discussed above.   ZigBee networks support local communications networks only.  In other words, these radios only communicate with one another, and are not used for communicating with Internet protocols.   Further, these radios form “mesh” networks thereby avoiding single points of failure.   This meshing aspect is particularly well suited to the EMS market as buildings with many ZigBee devices make very strong mesh networks.  Imagine a device on the 2nd floor of a building communicating with 6 other devices around it but also communicating with 6 devices on the 3rd floor and 6 devices on the 1st floor.   This ZigBee Mesh network throughout the building forms the backbone of the EMS communications channels through the building.   All these devices managed by a single small four inch by four inch wireless controller.

Cloud Computing:  The term “Cloud Computing” gets a lot of use these days; rightfully so, it is changing the world we live in.  Chances are you have used cloud computing in your life already.   Many of the services getting press these days have based their entire business model on cloud computing.   Think of Facebook, LinkedIn, and Google, these are all companies using “the cloud” to deliver their product to customers.   Again, to embrace my insecurity, I will briefly describe what “cloud computing” means.   It’s really quite simple, in a nutshell it means software companies can cheaply and easily buy computing power as a “service” instead of having to buy “hardware” to increase computing capacity.   Increasing computing capacity no longer means provisioning new hardware, installing server software, or maintaining secure, controlled server environments.   Increasing computing capacity is as simple as a few clicks from your cloud computing provider.   This makes it simpler and lower cost for software companies to provide software to their customers.   Cloud computing has had a profound influence on the way software companies deliver software to their customers.   Because the hardware is infinitely expandable and always available, software companies have been able to pass the high availability, low cost savings along to their customers in the form of software that is no longer packaged and delivered in a plastic wrapper, instead the software is made available as a lower cost subscription service - “Software as a Service”.  

Software as a Service (SAAS):  The advent and adoption of cloud computing by software and technology companies has redefined the way software companies deliver software to customers.  Gone are the days of “installing” new software or even new versions/releases of software.   Software and service are now delivered to the customer as a service over the internet “Software as a Service”.   In the EMS world, what does this mean for customers?

Agile Lean Product Development:  The idea of Agile Lean development is not particularly new in the software development space.   Through the advent of SaaS, delivery of Agile Product development become a reality in the EMS market.   Agile development is a methodology employed by software companies to rapidly develop and release products with minimal administrative encumbrance.   It allows software companies to develop and release new enhancements in hours, days or weeks instead of months or years.   As an example, we release new features to production approximately every four to six weeks.  The customer doesn’t need to do anything except keep using the product.    Because the product can be delivered via simple SaaS format, software companies can continually release newer, higher value products for the customer with minimal delivery cost.   The customer reaps the full benefit often at no additional cost.   Lean product development was refined, if not defined, by Toyota engineer’s decades ago.   The principal of Lean development means the company building the product focuses on only adding value for the customer.   If a feature does not add value for the customer, then it should not be built.   When lean methodology is adhered to, companies quickly develop only features that add value.   Lean development is often coupled with Agile development to deliver very high value products to customers quickly and efficiently.

Control Solutions, Inc Technology Simplicity (the iPhone effect):   This was left for last for a reason.   The “iPhone effect”…?   I like this phrase because it refers to something that most people can relate to… the iPhone.   Remember before the iPhone, when you used these things called user manuals?  Yeah, well most of us hated user manuals, but because software was so feature heavy and complicated user manuals were a necessity, if even to reference to from time to time.   When was the last time you read a manual before installing an iPhone app?   Chances are you’ve never even used a manual for your iPhone or any of the apps that you run on the phone.   That’s because the apps are so simple and intuitive for the customer that you just learn them by seeing, using or playing with them for a moment.  

In the EMS space this simplicity concept requires most if not all of the innovations I referenced earlier in order to be successful.   When people who know the EMS world think of traditional EMS, I suspect they rarely think of “simplicity”.   With the advent of the innovations outlined above, simplicity is at last within grasp.   For the SMB market simplicity is required.   Many of these customers do not have dedicated facility staff and require the product to be intuitive so that non maintenance/facility resources can manage their own HVAC systems.    Furthermore, simplicity is driving these EMS products to seek out high value features only and make them available for anyone to understand.   By focusing on simplicity and not on features, companies can deliver incredibly high ROI with fast simple installations, often performed by their own internal staff.  

When was the last time you installed a 40 RTU EMS system, commissioned, functional and delivered to the customer in under a day?   I do it regularly.


About the Author
Shane Mericle is the COO of Incenergy, LLC an Energy Management company in Austin, Texas www.incenergy.com



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