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September 2017
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The Building Controls Sector Could Learn A Lot From Personal Computing

As vendors, service providers, building owners and facility managers make their own conclusions, they would be wise to study the model set by the computer industry.
James McHale

James McHale,
Managing Director,
Memoori

The Building Controls Sector Could Learn A Lot From Personal Computing 

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Many technology vendors see an opportunity to separate the hardware from the software in building controls systems. Thus enabling a more robust technology product to control the hardware that already exists in buildings, according to senior smart buildings, IoT and energy product management consultant, Joseph Aamidor.

In a recent article for Greentech Media, Aamidor highlights that “these systems are rarely integrated due to the cost and complexity of doing so” and that because most of the software control systems are sold with the hardware “building owners tend to upgrade the software only when they also upgrade the hardware”. Considering the clear and calculable benefits of building systems integration and the lifespans of hardware compared to software, building systems seem to be falling far behind their potential functionality on both counts.

Aamidor, who previously worked in senior management at Lucid and Johnson Controls, equated the situation to that of personal computing, where compatibility and upgradability have become central to functionality and value creation.

“In personal computing, everything uses standards like USB or Bluetooth. Users can connect devices within seconds with no technical acumen,” he explained. “As new technology and products are introduced, they can replace obsolete components quickly and easily. Unfortunately, this is not how buildings work. Even modern technology, such as the smart thermostat, is not “plug and play” with broader building systems.”

There are a number of questions to be answered before this kind of change can take place in the building controls sector. Questions about what is easy enough and cost effective for consumers, as well as questions about what works best for the sector. Aamidor sets out a series of questions on the future of building controls:

“SERVICE-DRIVEN OR SELF-SERVICE OFFERING MODEL?”

The line between vendor and service provider is often blurred in the building controls space with companies traditionally acting as both. However, some new firms are allowing customers greater access to their data in order for them to maintain their own buildings. “While this model is less capital-intensive, it does mean that busy facility managers have to take on new responsibilities,” says Aamidor.

Whether the majority of building owners and facility managers will want the extra headache of dealing with data themselves, is yet to be seen. If such a model were to prevail you would expect improved generic software to become available, potentially opening up building data analytics to a much wider audience.

“ONE-TIME COST OR RECURRING SOFTWARE-AS-A-SERVICE?”

“As-a-service” offerings in computing and other sectors have become much more common in recent years, and the building controls space needn’t be different. However, building owners will need more time to get used to paying for their lighting or access control systems on a monthly or yearly basis. Traditionally these costs would be a one-off outlay for owners but there are significant advantages to recurring contracts.

“Recurring service contracts deliver an outcome, while recurring software licenses deliver information that can be used to achieve an outcome. While the recurring license fee model has been successful in many software markets (enterprise resource planning and customer relationship management software, for example), it has not yet disrupted the building management space,” explains Aamidor.

Vendors could perhaps do more to change the culture of one-time cost in building controls, but with the wave of “as-a-service” models emerging across the technology world, it seems only to be a matter of time before it becomes common for building software.

“INTEGRATED SYSTEMS OR NOT?

Integration of building systems is central to the concept of the smart building, but as each control system is generally purchased from a different vendor it is still not common. The majority of integration that does happen, happens long after purchase and is often bogged down by compatibility issues. It seems the only way widespread integration can take place is through stronger and stricter standards.

“The open question is whether integration remains a custom engagement (which is costly and would limit the addressable market), or if most vendors will coalesce around industry standards (so that integration would be more efficient and cost-effective),” writes Aamidor.

Reliable Controls“VENDOR PARTNERSHIPS OR NOT?”

“Recently, the major building controls, security, lighting and elevator manufacturers have been actively extending their strategic partnerships to augment their integrated portfolios and keep abreast of building performance software business in the move to the Building Internet of Things ,” we said in our recent report The Market for Building Performance Software 2016 to 2020.

In his book, The Third Wave, Internet pioneer Steve Case describes the “need” for more partnerships between businesses focused on the “internet of everything” in order to deliver more compelling and valuable offerings. As yet, however, this has yet to fully take shape – we can and should expect much more in this regard.

“While there are many recent instances of legacy building vendors partnering with technology giants, building operators often have not yet realized the fruits of these partnerships. Similarly, will the large established building vendors continue to own the customer relationship, or will they be suppliers to new prime vendors with stronger technology?” Aamidor asks.

It may be challenging to predict the outcomes to these points but considering the pace of change in IoT and smart building technology, we may not have to wait long before these issues rise to the surface. As vendors, service providers, building owners and facility managers make their own conclusions, they would be wise to study the model set by the computer industry.


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