Babel Buster Network Gateways: Big Features. Small Price.
Secrets of Success and Thoughts on Where the BAS Industry
Scott Cochrane, President and CEO of Cochrane Supply &
Engineering, Interviews Martin Villeneuve, SVP of
Distributed Building Technology for Acuity Brands and
President of Distech Controls
the last 20 years, I have enjoyed meeting executives from the BAS companies
that support our industry. Many I meet come from notable backgrounds with
higher level education, billions of dollars of responsibility, and they’re
usually taller than me and very professional. They usually look like they are
fresh off Wall Street demanding respect through confidence—and then there is
Martin… WHO??!! Martin Villeneuve is the Senior Vice President of Distributed
Building Technology for Acuity Brands and President of Distech Controls. He was
brought into the role when Distech Controls was acquired by Acuity Brands six
I first met Martin, I knew he was special. He was not perfect, not tall and did
not know everything. Instead, he was curious, likable and before I knew it, I
was having a great conversation with him about our industry that has continued
throughout our relationship. A true knowledge base of our industry, Martin
started more than 20 years ago as a Tech / Project Manager for Distech Controls
when they were initially a BAS contractor. He helped them turn into a
world-class manufacturer, even taking him to Europe where he successfully built
a market-leading business for Distech Controls. He’s now back in Canada working
for Acuity Brands, the American parent company of Distech Controls,
successfully showcasing the ingenuity and drive that has made the brand
successful—all while being this super nice, unassuming guy who just loves the
Cochrane: Can you tell us about your start in
the BAS industry and the early years?
Villeneuve: Of course. I will tell you first that
before choosing HVAC engineering at school, I was hesitating between
management, management and admin, and engineering, because I was, like you
said, curious about how things work. So, I remember discussing it with my
family and then decided I was going to go into engineering first, and then once
I felt like I knew enough about how things worked I would go into management.
So, I chose HVAC engineering, and in the world of HVAC engineering, you can
choose a lot of different things such as heating, cooling, ventilation, fire
and security. Or you can choose controls where you get a glimpse of everything
without going into the details of designing every machine. But you get to touch
everything, plus you're in controls from a technology perspective. So, that's
why I chose the BAS industry.
Cochrane: Did you get formally educated then or
was this all through career education? Was this more like choosing your first
jobs and stuff like that?
Villeneuve: I went to school for HVAC
engineering, which was a three-year degree here in Québec, Canada.
Cochrane: And then from there you focused on
controls when you came out or was your first job with Distech Controls or did
you go to work for another company first?
Villeneuve: No, my first job was with a controls
integrator / systems integrator in Québec called Regulvar. I was perhaps employee
number 400 and I was
hired before I finished my schooling. I worked for that company for two years
before being convinced by Etienne Veilleux, the founder and President of
Distech Controls, to come and help him build the product for his systems
integrator business. At that time, the idea was to build a product for our own
use and after that it evolved obviously.
Cochrane: So what was it like? You came into
Distech Controls and they were a BAS contractor at the time, and they became
this global BAS manufacturer. Going back to when you were making your first
decision to go there, what was driving Etienne to say let's do this? And then
within that first five years, you guys rose to success. What made him decide to
make it like this? What made him decide that he’s going
to compete against Honeywell? Can you speak to that from that time period and
what made you guys decide to go for it, if you will?
Villeneuve: It was not a smooth or easy ride.
There was personal sacrifice and we incurred some debt to fund the product
development and innovation.
Cochrane: So in the early days, a lot of people
made personal sacrifices to start it up?
Villeneuve: Yeah, definitely. In the early days,
when Etienne finally convinced me to join Distech Controls after more than a
year of meetings and interviews, I joined their team as a Project Startup
Director and I soon realized that projects were really hard to commission and
start because the product was not mature enough or ready. I remember going into
Etienne’s office at 5pm or 6pm at night and leaving his office around 8pm or
9pm, without even remembering why I entered at first—so he was a very
convincing and thoughtful leader. I was very young at the time and he said to
me, “Martin, if the product is not ready, would you come into the development
department and help us develop the product?” I had not initially planned on
coming to Distech Controls to achieve this task, but I embraced it and worked
internally with R&D for more than a year, guiding
them on what the control system needs to do at minimum in order to achieve the
projects we sold outside.
Cochrane: Were the original controls all
LON-based? Was LNS-based your first version?
Villeneuve: Yes, LNS version 1, then 1.5 and so
Cochrane: Yes, yes, I totally remember! That
was the right move back then because that was bleeding technology at the time,
especially in Canada, I don't think LON really got to Canada. You know, I
thought you guys were one of the first ones that really made that happen there.
Wasn't that kind of the case?
Villeneuve: Yeah, there were a few local
manufacturers in Québec that did LON and we were using their product realizing
that we could do better if we did it ourselves and if we invested enough in
research and development. In Québec, we have the possibility to get grants to
invest into research and development so we maximized it a lot, and through my
guidance and then other people that we hired that I knew from the domain, we
built a respectable team in order to build a product.
Cochrane: Wow, that's so cool. When did you
guys feel it take off? When did you decide hey, let's go for it because we got
Villeneuve: That’s not exactly how it happened.
Our minds were split in half between developing the channel network to sell our
product and achieving the project we committed to locally in Québec to do with
our product and staff—and at one point, there was not enough resources to
achieve both. So, we were forced to choose between being a local contractor and
being a manufacturer. It was a hard choice, but Etienne made the right
decision. We decided to sell our BAS contractor division and focus on being a
manufacturer. We divided our revenue, probably by half at the time, and hoped
to survive the swing over to being a manufacturer.
Cochrane: Did the contracting entities stay
alive or did it fizzle out with the acquisition?
Villeneuve: Yeah, we sold to a business called
VCI that was an Ontario-based systems integrator that wanted to expand in
Montreal. They did not succeed, however, and another systems integrator in Québec, ACCS, took over most of the projects that
Distech Controls did in the past and some of the original employees went to
Cochrane: I love hearing about this—I know who
all these people are, so it's neat to hear it all come together.
Villeneuve: This was back in 2002 that we made this
decision, when I was 26. At that time, Etienne decided to go all in and put
everything on becoming a manufacturer. We even had a hard time convincing some
of our employees that were on the contracting side to stay on with the manufacturing
business. It was a very big debt. But then we succeeded, and we finally were
able to build quality product and enough of a channel to help us. We signed an
OEM deal with Johnson Controls shortly after. We decided to give up on their
LonWorks line and OEM the Distech Controls line, which gave us both revenue and
credibility in the market.
Cochrane: Yep, I remember that and that's where
we first started using the Distech Controls product was with the old LN
controllers from Johnson Controls. Great history! Let's move on a little bit to
your time in Europe. I know you've helped Distech Controls build a very
successful business over there. But in your own nature, of course, you're very
curious. You learned a ton and you've shared a lot with me over the years about
stuff in Europe that you've seen—so could you summarize today what you'd say
are the major differences between those markets in your eyes?
Villeneuve: Yeah, I found Europe different in some
ways and similar in other ways. The difference is mostly coming from the cost
of energy, country regulations, and the desire to distinguish their buildings
through technology. All of this arrived to a pinnacle of there being much more
technology per square foot. Usually in a building in Europe spaces are smaller,
so they need to be used with more considerations compared to North America I
would say. The cost of energy makes for a little battle, for example, between
who controls what between the lighting controls, the HVAC controls, and the
sunblind controls. They cannot insulate the walls or the roof or the windows
enough in order to save an adequate amount of energy, so they really maximize
the controls piece of it as much as possible.
that traveled to Europe noticed that it is very rare to find a switch on the
wall. Lights are automatic, so if you apply the same visible principle that we
see with lights, it's almost the same with BAS and the rest of the controls in
either a room or a building. So, this combined with local practices and country-level
regulations, it's the same need everywhere. Everywhere on the planet we need to
control comfort, heating, cooling and lights. From a conceptual point of view
it's the same thing, but then trade regulations vary country by country and the
manufacturer-specific development that influences the regulation in the country
model sees the needs differently from one country to another. This is why
you're going to see the UK, France, Germany, etc. with varying requirements.
But when you analyze it deeply, it was because of a regulation at one point or
a manufacturer that had a feature set at one point, but in fact they all need
the same thing.
Cochrane: Sounds like California and the U.S.
Villeneuve: Very much. California is very similar
to I would say a country in Europe from a regulation perspective. It was
tailored because of regulations, energy costs and likely manufacturer presence
at one point.
Cochrane: Yeah, so what do you see happening
here? There's more value on the technology there for obvious reasons that you
pointed out, but what's going to happen here? Do you see that trend happening
here or is this trend different in North America in terms of that?
Villeneuve: Now, honestly, I see the same trend
happening since energy costs are always going to rise. We're always wanting to
save energy, probably with COVID as well. It is going to be very important to
have the right technology in order to make sure we have the right quantity of
air ventilation per room, and we want to track the number of people more than
CO2 sensors. So, I would say in Europe they are more ready to accomplish that
than us and in North America because we tried to save on the amount of controls
we put in a room. We're trying to put 12 rooms on the same VAV because they're
all on the north side. Now we see that with the pandemic, it was an error and
doesn’t help us get people back in spaces.
Cochrane: Now, not to uncover some of your
secrets, but we all know, Martin, that that a lot of the new Distech Controls innovations
mirror some of the strategies that made you successful in Europe. In terms of
that occupant experience, Distech Controls is one of the first companies to
actually offer something along those lines to the BAS industry and I'm just
curious how well is that being received out there in terms of being a leader in
that regard? Is it still too fresh you think or are you guys starting to see
more traction there?
Villeneuve: So obviously, Scott, you said it
well, that's a trade secret. But I’m happy that you ask. One of Distech
Controls’ proven paths to success is that we're using the best of what we learn
from a technology perspective and application in any of the countries that
we’re present in and we're normalizing it in our standard platform worldwide,
which other competitors have a hard time doing. I think it's more by accident
that they keep everything separated than by willingness or by the size of their
organization that one hand cannot talk to the other. This is already tough to
do in an organization like Distech Controls’, but it's more natural because of our
effectively, yes, we've learned a great deal of stuff regarding smart room
control, applications, and occupant experience in Europe. This was, you know,
the de facto standard in Europe because one building has to compete with
another. If they want to rent to a tenant, they need to differentiate their
building with things other than the quality of the space, the size of the room,
the size of the window, etc. It's really technology that differentiates the
building, and by bringing that into North America, I would say this is one of
the first subjects that building owners, consulting engineers, and architects
are interested in. So, this would get our foot in the door.
if you're asking me if all of it is implemented down the road because of the
fact that it goes to a general contractor then to a mechanical contractor and
then underneath the mechanical contractor, there's a lot of value engineering.
This is where we see systems integrators being directly under the general
contractor in the market more often, and there's more of the master system
integrator role because building owners realized that the value provided by the
system integrator for controls is much more important to be only a sub of a
Cochrane: I agree. I've been hearing recently
that a lot of large real estate holders, especially in the United States, are
dumping their real estate. But, they're keeping their gems and one of the
things that they're talking about is investing more into the technology in a smaller
group of buildings and making those buildings more competitive. This is sort of
the future of big real estate they're talking about in North America, which
would mean we'd be trending towards what you see in Europe now—which is you’ve
got two buildings that pretty much are the same today. What's going to make
them different is that better technology and that better occupant experience,
and because people will be much more competitive for that space now than they
were before. So I think it will help, I’m like you, I want to see the occupant
experience drive these conversations in BAS, not the mechanical engineers
anymore. We need to move over to let the people in the buildings tell us what
Villeneuve: This is going to drive the
difference. I believe this is going to drive the change in North America in the
years to come. The SI’s involvement with the general contractor is going to
change a lot, and like you said, instead of being relinquished under the
mechanical contractor, the building owners are going to work much more direct
with the systems integrator, which are there for the lifespan of the building.
Cochrane: Yep, and they become a different type
of entity to the building owner. Much more of a technology provider, not just a
mechanical electrical service provider. With all this being said and all of
this cool stuff you’re working on, would you please just pick one of the
technologies that you guys are playing with as a company, that you're
incorporating into your products, and tell us how it's just going to change the
BAS industry? You're working with some really neat stuff like Bluetooth, the
occupant experience, a bunch of apps—I mean most people don't even have apps.
Villeneuve: Yeah, first we're focused on making
sure our product is built from an occupant experience point-of-view to easily
respond to the need of the of the occupant… so that's one. The Bluetooth
technology, the ECLYPSE Sky Ecosystem, and everything that is built around
this. Then the second pillar is to be able to make it so system integrators,
which have massive resource constraints, can go in and out of a project as fast
as possible in order to execute more in a more profitable way. We're building
tools for them to normalize the work that they do, like the Builder tool that
automatically generates code sequences and our Auto Commissioning Tool. You
don’t want to send a guy to commission 1,000 VAV’s when you can have an auto
that is the table stake for me—that is what you need to do in order to be
attractive to both building owners and systems integrators. But if you ask me,
the cool technology that will probably help us revolutionize the world of BAS
again, it's probably AI. Artificial intelligence holds the potential to move us
from having to control a building to having an autonomous building. I think
there are a lot of steps in between in order to reach that level, such as
understanding the systems, the digital twin, and the cloud infrastructure.
in the end, AI is going to change our industry completely and that's why we're
working on that internally: having AI capability in our ECLYPSE APEX controller
that is scheduled to be released later this year and having an overall platform
to maximize the use of it.
Cochrane: You going to give all that away in
this article?? I love it. I think you guys are on the right track and I'm
happy you're saying that. Just the fact that you're using those words and
talking about it makes me excited about the future for Distech Controls for
Villeneuve: It's just too long for me to wait. I
see everything we have and I cannot hire fast enough. We hired close to 60
employees in 2020, a pandemic year. I'm looking at the road map that we have
and we could hire another 100 people and still have jobs for them for years to
come. So, I'm just constrained by the amount that I can invest, but we're
investing A LOT and I'm happy that Acuity Brands sees that opportunity and
gives us the leverage we need to execute.
Cochrane: You're dancing with the big boys now!
I know you said you wanted to and I can tell you are. Let's get to the last
question now. I did prepare for this by interviewing two of your key
lieutenants to get a little more background on you. I interviewed Scott Hamilton
and Ryan Sen. What both of them would not stop telling me is how much you are
liked by your team at Distech Controls and how much they respect you. I know
they're very happy having you as their leader and it's not just because of the
success of Distech Controls, there's more to being a good leader than just
success. Is there anything you can share with me about how you've been able to
develop such a great relationship with your team to get them to respond the way
they do? What is the secret, Martin, to good leadership in our industry?
Villeneuve: Probably the secret is to not have
any secrets. It’s to be an open book. You can’t have a hidden agenda with
people for profit. It’s essential to be genuine with your people and to put as
much effort in as they would if they were in the same position. You need to
respect their work by working yourself out of the situation. That's one point,
but also hiring is so important. Hiring the right people with the right
motivation. In the past, at times, we've made the wrong choice and I've seen
how much it negatively affects the organization. That’s why I put an enormous
effort into the hiring process to vet out the candidates to make sure they are
here for the right reason and that they're going to have the passion.
every person can develop the passion for this industry. This industry could be
boring for some, but could be very exciting for others. The trick is always to
find the people who are going to be excited by this industry and will go those
extra miles in order to reach the result and be a challenger in the industry.
To help us achieve a long-term dream of being one of the Big Four at one point.
We’re striving to displace one competitor on that list, though not necessarily
remove them. I think competition is healthy in the industry, but from being
considered a nobody in the industry with zero revenue less than 20 years ago to
being considered one of the big four or big five in the industry would be an
accomplishment that cannot even be described.
Cochrane: What's going to make you feel like
you're in the big Four? I mean, is it a revenue goal? Is it a market share
goal? When will you know you arrived?
Villeneuve: It's market share. When I'm looking
at markets today, I tell myself we have a long way to go.
Cochrane: Well, I think you're an awesome
leader and I want to show a lot of people that people can lead from within this
industry, we don't have to always think we have to bring people in from the
outside. So credit to you guys and your company.
Villeneuve: I’m very appreciative, thank you. You
made me think about how it could also be motivating for some of my employees to
say, “Yeah, I don't have to come from a different background to eventually
leave that BAS organization and Martin is proving it.” Well, thanks to the
trust the new leadership in Acuity had in me at the beginning, giving me and my
team the opportunity to prove ourselves.
the end of the day, I love my job. I love what I do and I could not see myself
doing anything else.
So… other BAS manufacturers BEWARE. With Martin at the
helm of Distech Controls, you better keep working hard—because I know Martin
Hear more insights from Martin and his future predictions for BAS technology in his keynote presentation at Controls-Con 2021. Controls-Con is a virtual Smart Building Controls Conference and the World’s First Master Systems Integrator Conference taking place May 5-7, 2021. Dive into the latest technologies, trends, and best practices in building automation, controls and operational technology. Learn more by visiting www.controlscon.com.
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