Babel Buster Network Gateways: Big Features. Small Price.
EMAIL INTERVIEW – Ken Sinclair and Nicholas Heydon
Nicholas Heydon Optergy Australasian Channel Manager
Employment for Nicholas started as an apprentice electrician. After completing a trade and working in the commercial construction industry for almost 10 years he shifted gears into an engineering role with a leading Building Automation and Energy Management Company. Nicholas is an expert in automation and tuning of high performing buildings in the commercial office, retail and education sectors and was involved in delivering one of the first 6 Star NABERS rated buildings.
Studying a Bachelor of Business part time at Macquarie University, Nicholas progressed from engineering towards business and sales orientated roles where he received multiple awards for Sales and Estimating.
is now the Australasian Channel Manager for Optergy, responsible for
business development, sales, marketing and channel partner management
across the Australasia region. Nicholas’s goal is to provide the tools
that help reduce the built environments energy intensity. Over the span
of his working career he wishes to see the world turn a corner, and
global energy consumption decline (wishfully thinking).
Changes in the Building Automation Market
Controls contractors will need to evolve into systems integration to stay relevant.
What changes have you seen in the building automation market over the
past 10 years?
Heydon: Controls contracting is increasingly a
tough game. If we go back to the year 2000 there was 20 BACnet players.
Fast forward 10 years to 2010 and this number had grown to over 500
with contractors having the luxury of product choice. In 2010 controls
made up approximately 15% of a commercial office construction project.
Not only was there margin to be made from project delivery, but also
from an almost guaranteed maintenance agreement.
Today the number of BACnet players is over a 1000. This has brought many new contractors into the space making a much more competitive market. Controls now makes up only 8% of a commercial construction project. In some markets controls contractors are now taking orders between 0 and +5% margin. There is now little to no margin with no guarantee of a maintenance agreement at the end of a project.
The traditional contracting approach is
no longer yielding the same returns for contractors.
Sinclair: Where are these changes being driven from?
Heydon: There are a number of reasons for this market shift. Mainly;
All these market trends make controls contractors very nervous about
the stability of their businesses into the future.
Sinclair: Where is the building automation market heading?
Heydon: All predictions are that the building
automation market is set to grow aggressively at predicted figures
between 9-12% CAGR. In emerging markets, the traditional contracting
model may prevail for some time. However, in mature markets like
Australia, US, UK and Germany this market growth won’t be from the
traditional contacting approach taken today.
In my opinion the growth expected in mature markets is going to come
from factory fitted controls and the subsequent integration of all
building systems. This not only includes HVAC but also lighting,
metering, access control, CCTV, fire systems and tenant billing systems.
Sinclair: What’s this mean for the controls contractor?
Heydon: This means less and less project scope.
It means the controls contractors of today will lose most of their
labor content, no longer supply controller hardware or install cabling
Controls contractors will need to evolve into systems integration to stay relevant. There will still be a need to tie together buildings with factory fitted controls. The individual pieces of equipment still need to work together so the building operates cohesively.
Other building equipment like lighting, metering, access control, CCTV, fire systems and tenant billing systems will all need to be integrated and operated from one integrated systems platform. This will be done in an effort to optimize all buildings systems and operations.
This change brings other challenges. Systems integration requires skills in IT, particularly in the areas of networking and security. In 2016 a major search engine provider headlined as a BMS system in a building they occupied in Australia got hacked. This came about because of a lack of understanding of networking and security from the installing contractor.
Typically controls contractors have backgrounds and skills that spawn
from electrical, HVAC and refrigeration and may have a shortage of
skills in the area of IT. Headlines like this can quickly harm the
reputation of a contracting business, so upskill in the area of IT is
Sinclair: What would be your advice to controls contractors today?
Heydon: Tomorrow is a very different place to what we are used to. I would suggest;
Start driving change today. Contracting with the same approach at best
means taking more share of a declining market. This would be much like
selling the best horse drawn buggy in the world, while a major car
manufacturer starts production of the motor car.
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