Last week, thousands of HVAC equipment and component manufacturers, automation and control vendors, technology suppliers and facility managers and decision makers descended upon Las Vegas for the 2017 installment of the annual AHR Expo, a buying and selling convention for all things HVAC-R related.
While I overheard many mentions of Internet of Things technologies walking through the convention center, and attended two standing-room-only IoT-focused sessions, there was little visible action from the many companies there. What was clearly visible (and audible), however, was confusion and frustration.
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Of all the fanfare around one of the biggest HVAC-R exhibitions in the world, three themes are strikingly clear: original equipment manufacturers are still focused on remote services, missing the true value of smart systems; automation and control players are trying to be the lynchpin of IoT solutions in buildings; and everyone still thinks education and retraining is the key to driving adoption.
OEMs Are Missing the True Value of Smart Systems
In the exhibition halls, Emerson, Honeywell, Johnson Controls, UTC and hundreds of others were all showing off the latest and greatest HVAC systems, components, controls and technologies. Moving from booth to booth, machines, devices and materials are the center of attention. Pure-play technology suppliers were present as well, offering devices and software for integrating systems and analyzing machine health; however, it became clear that OEMs are still missing the true value of Internet of Things and smart systems technologies. Connected equipment that alerts and alarms when broken is great for increasing OEM service efficiency, but does little beyond reducing mean time to repair for customers. While reducing downtime is no trivial matter, bettering service delivery through remote interaction represents just a small sliver of the value that can be created and captured through smart building systems.
The people I spoke to at these companies are interested in where smart systems are heading, but all seem to be inhibited from acting on these interests. The adoption of lean practices over the last 2-3 decades may have cut out all the potential for organic innovation in these companies, leaving general managers more in the business of risk management than anything else. Siloed people, functions and processes may be wrapping the collective intelligence and expertise within organizations into a veil of unknown. Either that, or these companies may just be slow on the uptake—we all know that management styles don’t change overnight. And it could be all three, depending on the company.
Whatever the root of the problem may be, it results in a mindset that you can acquire to innovate all of your problems away, a set disconnected views on where to go and what to do with these technologies, and a going-in position that whatever the IoT is, it must be built internally or bought. OEMs have failed thus far to move beyond applying these technologies to captive services. They are still missing the opportunity of creating new value for their customers and are leaving the door open to major disruption. Smart systems and Internet of things opportunities require a new way of thinking and doing business, and a drive toward fostering collaboration within and between organizations. Based on the lack of ecosystem development and integrated offerings, I am yet to be convinced that these OEMs are willing to make the changes necessary to succeed.
Automation & Control at the center of the Smart Building Systems
Building automation and management systems have been around for decades now, offering monitoring and control of building systems such as HVAC, lighting and access control. These systems have helped facility managers reduce energy costs and be alerted to potential issues; however, most of the data that is collected by these systems goes unused. While each system is monitored and controlled, there is little, if any, integration and analysis of data across these systems, ultimately limiting their value.
Building automation and control vendors are trying to change this. The evolution to smart systems for these players is more natural than that of OEMs, but is by no means guaranteed. The solutions I saw from the likes of KMC Controls, Delta Controls, Acuity’s Distech, and others are beginning to point in the right direction for the most part, but are still falling short.
Condition monitoring, remote control and occupancy sensing are the foundations of higher value solutions, but are really more of a means to an end. Collecting data and the ability to control machines can help optimize equipment and enable new revenue streams, but first you have to analyze and interpret the data and do so quick enough to capture the value. More than half of all the data created from physical or operational systems today loses any value that can be derived through analysis in less than one second.
None of the automation and control players have figured this out or incorporated it into their solutions today. Pure-play technology suppliers like SkyFoundry and n.io have developed the tools to help do this, but automation and control players seem to be only looking within their organizations to drive this innovation and value.
With the apparent lack of attention given to these opportunities by OEMs, the door is wide open for automation and control vendors to by the lynchpin of compound values and applications within buildings. The tools to deliver and capture this value, however, will not all come from within any one organization, and therefore require the development of collaborative ecosystems across the facility value chain to effectively create, deliver and support these solutions.
Education & Retraining Will Not Solve Your Problems
In one town hall session, a woman asked a somewhat benign-sounding question that belies the true state of this industry. Referring to both suppliers and users of these technologies, she said: “We’ve been talking about retraining and education programs for many years, and we haven’t gotten anywhere”, acknowledging to the lack of expertise with regards to the use and support of smart building systems. She continued, “So what do we do? Do we just scream louder?”
One of the panelists answered that they have set up an education program to bring people together to learn about and work with these new technologies. Listening to this exchange, I couldn’t help but think that sure, retraining and education sound like a great idea, but who has the time or money to do this? Even if you did have the time and money, can you really teach an old dog new tricks anyway? Would you even want to? People go through years of formal education to become data scientists and software engineers. Education sessions or even month-long classes will not be enough to solve this problem. The answer is not as simple as retraining and educating.
The whole point of these systems in the first place is to make it easier for suppliers and adopters to do their jobs, save time and money, increase existing revenues and drive new revenue streams. While training and education have worked in the past for new versions of old technology, smart systems and the Internet of Things are inherently disruptive and discontinuous with past innovations in that they require extensive collaboration to create, deliver, integrate and support solutions. Education of the value of these solutions is important, but the right partnerships and support structures will be the only way to drive the adoption of these technologies.
You Can’t Do This Alone
All of this points to one glaring barrier to the development and proliferation of smart building systems: the mindset that everyone has to do this on their own. From the technology suppliers to the OEMs to the facility manager and other customer stakeholders, this “I can and must do this myself” mentality is engrained in players across the value chain. This will not work in the new world of smart systems, and may, in fact, work against a truly “smart” future.
Companies must think outside of the box and look outside of their own organizations for the answer. Partnerships and collaboration are needed to support customers and users of these systems. Technology suppliers, however, must first develop software and systems that keep the user in mind. If these systems make someone’s job harder and more complex, why would they ever use them? User interfaces must drive a natural, intuitive experience that can be picked up easily by even the most technically-inept operators. The suppliers of this technology must also work with OEMs and service providers to support the delivery and integration of these solutions into customer environments. We can’t just keep throwing technology at problems, walking away and expecting it to stick.
This applies to the OEMs, automation and control players and services providers as well. On-going support and interaction are a must in order to drive adoption of higher value solutions. This, however, does not mean drastically increasing staff from Day 1. This means developing an ecosystem that facilitates this support and interaction—from the tech suppliers through the OEMs and service providers, to the local and regional systems integrators and installers that can be leveraged as both a delivery and support mechanism. Moreover, this all has to be done without losing sight of the user.
One company at the expo, LynxSpring, stands out as an innovator that is trying to bridge the gap between user needs (and budgets) and the automation and control industry. They have put together a modular system based on Tridium’s Niagara framework that provides connectivity and control down to edge devices that is easily integrated with legacy systems and intuitive for facility managers to use. They are leveraging an ecosystem of OEMs, channel partners and systems integrators to help deliver these solutions to many different types of end customers with many different needs—from restaurants and retail to offices and apartments. LynxSpring’s ecosystem and business model is indicative of the collaboration and new thinking that is required to effectively provide smart building systems.
The models required to effectively capture the value of this opportunity are fundamentally different than the models of the past, and as I observed at AHR Expo 2017, most have failed to recognize this. We’ve been stuck in a holding pattern for the past few years, and we can’t expect to see adoption until OEMs and automation and control vendors can get over themselves and work with others to add value to, deliver and support smart systems solutions.
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