Which Switch?

How does a really big property owner get started with handling building data in the Cloud?

Noller:  We have developed a cloud-based platform for building owners to acquire operations data, analyse that data, act on it and then automate.  So our customers use the platform for a broad range of uses from building automation to sustainability reporting and tracking energy efficiency projects.

Noller:  We are targeting three key markets – firstly large portfolio owners, secondly multi-family residential and thirdly what I see as a large underserved market – the buildings that have no building management system – so all of the industrial, small commercial, retail and individual tenants.

Noller:  Great question, I am about to do a talk on this because if you look at what I outlined above, it seems like an enormous task.  And many companies don’t know any other way than to create a budget, put a project team together and go out to market with a 2-3 year project. Even the request for qualifications and request for proposals can take months to get through an organization; this is long before you select a software integrator, comes on board and becomes effective. In fact there are a number of platforms, including ours, where you can just get started with a bit of utility or spreadsheet data, for example, and some historical data. Through this process, you can get some early successes, engage key people in your operations team, learn a lot, achieve some savings and grow the platform from there.

Our experience is that you can be up and running in less than two months in most cases, and begin the process of cost reduction and gaining insight into the patterns of energy and water use. Then if you want to integrate existing submeters and BAS systems, for example, you will likely have to spend more time to make sure they’re all running and posting correct data, BUT in the meantime, you’ll have something to report to the facilities team and the C-suite, and that’s really important for gathering support for further action.

Noller:  We have had mandatory disclosure of energy use in Australia for a number of years now.  So this means large building owners have had to report energy ratings on buildings offered for sale or lease. Initially there was resistance.  After that, both state and federal governments adopted policies which said that they would only lease buildings with a minimum energy-efficiency rating.  Most building owners then upgraded their buildings to attract government tenants, and then a lot of our larger corporations started to demand better-rated buildings for themselves. So first it was regulatory and policy-driven; then it became market driven. We now have a very well educated group of property professionals who are striving to cut energy use and root out other inefficiencies, because the savings go straight to the bottom line and the tenants are recognizing the benefits of being in efficient spaces.  So we in Australia have effectively created a big industry out of energy efficiency, as well with lots of people benefiting from it.

Noller:  The large property owners are very engaged in this for the reasons outlined above. So once building owners understand their overall energy consumption, they often need to implement some submetering to get more granularity and visibility into patterns of energy use. One of the problems we have seen in Australia is large amounts of submetering implemented, but with no or poor visibility into the data.  This has led to large amounts of poorly installed sub-meters and has given sub-metering a bad reputation. We often find up to 40% of submeters not connected or not calibrated. As a result, the person who originally signed off on that project has a taste of disappointment because the project never delivered what was promised. I suspect that the situation is no different in the U.S. in this respect, where large amounts of money have been spent in submetering buildings with no outcome and a large amount of scepticism and disappointment.

The next step for any organization is to use the energy data systems for live tracking of government efficiency ratings so they do not miss their stated energy rating goal, using lots of audits and energy upgrades.

Noller:  The US Federal Government has a target for all commercial buildings to use 50% less energy by 2030.  The Seattle 2030 District has been set up to help building owners get to that target.  They have the belief that by benchmarking and sharing data then the objectives will be tracked and achieved.  Several 2030 Districts are also organizing around the US, including in Los Angeles, Cleveland and Pittsburgh. The trick has been to help building owners get started with tracking and reporting energy use data. In Seattle, we are working with four major owners already, a total of 15 large buildings, with about 1.5-million square feet of space. We are hoping that the City of Seattle (which has a disclosure ordinance) and the 2030 District will now start to endorse this “ready, fire, aim” approach, where we just get data flowing at the macro building level and then start to drill down to specific end uses of energy that are driving overall consumption. It turns out that our most enthusiastic backers are the sustainability directors of these organizations, who see the potential for gathering far more than just energy use data.

The big opportunity of course, is that we are developing a model for Sustainable Cities – the ‘Holy Grail’ that all governments and a lot of large companies are trying to build  – a model that can be replicated all around the world. We are also working with a network of organizations in Los Angeles to see if we can replicate that model. It involves a collaborative effort between private and public organizations but the cities that can achieve this integration of private and public sectors will lead the way.

Noller:  Two big things – firstly how hard it is to get going and to find a platform that is robust enough for all the demands that you will place on it. If it were easy, then it would be happening already, but it’s not – it’s really hard. There are lots of silos in every organization and sharing data across department lines and functional lines has never been part of corporate culture.  As a result, companies are holding data in spreadsheets, utility bills, waste-collection invoices, and there are hundreds of buildings with unique collections of systems and devices. The issue of data integration and normalization, so that we can compare apples with apples, is huge.

Secondly there is the issue of education – These new platforms require an unusual blend of skills – electrical, mechanical, IT, networking, energy knowledge, controls knowledge, and so on, and there is simply no underlying education program that covers the entire skill set required to develop the smart building industry.

Noller:  For Switch, there is a huge opportunity to become one of the largest global growth platforms in the next big wave of building automation.  Take SAP – one of the leading global platforms for financial data, created at a time when no one had a clear idea about what was driving revenue and profit in a business. In much the same way, Switch is responding to a pressing need for integration of energy, operations and sustainability information.  We are very focused on operations data.  Of course, just like SAP, we need lots of businesses to adopt Switch both as a customer and as a means of generating revenue, to allow us to continue to grow and develop the platform.

As for the emerging Smart Building industry – in my view this is about like 1993 in the Internet. We know it’s coming: the environment is right, the appetite is there, the technologies are there, so it’s emerging.  Everyone thinks there will be one clear winner (remember Netscape, My Space, even Yahoo?), but in my view it will be just like the Internet: there will be hundreds, even thousands of opportunities and lots of companies will develop pieces of the total pie. That’s why we’re so excited to be engaged in this undertaking right now!