August 2008
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Control Solutions, Inc. - Minnesota

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Open Systems Opens Doors

The Secret Sauce in the BACnet Recipe for Success

Andy McMillan

Andy McMillan
President and CEO
Teletrol Systems Inc.
President
BACnet International

Contributing Editor

One important motivation for development of the BACnet standard was the desire to create a market where users could cost-effectively implement multi-phase controls projects with open, competitive bidding on each phase. The idea was to dramatically reduce the cost and operational obstacles to combining an installed base of one supplier’s controls with newly installed controls from another supplier. Not that all users necessarily wanted multi-supplier systems but in some cases procurement process requirements made it unavoidable. In other cases, failure to perform on the part of the original supplier made it necessary. In any case, the existence of an open, global, industry standard like BACnet would “open the door” so to speak for multiple suppliers to bid on projects, even when those projects had to be integrated with previously installed systems. The good news is that it is happening exactly like the visionaries behind BACnet intended. The even better news is that BACnet is also opening other doors that can lead to dramatic success for users and suppliers.

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Key users, including Mike Newman from Cornell University identified the need for BACnet early on but much of the work involved in developing the specification came from volunteers whose time and expenses were donated by controls suppliers. Those suppliers saw a lot of business potential in the “open doors” relating to bidding on projects where the installed base was some other company’s system. At the same time, they correctly foresaw that users would prefer open, standards-based systems on all projects, multi-phase or not. Since then, virtually all building controls suppliers and many equipment suppliers have responded to customer requirements by including BACnet solutions in their product offerings. As a result, users can take advantage of a more competitive bidding environment and suppliers have a broader set of project opportunities.

Beyond the potential for user and suppliers to expand the bid list for projects, BACnet opens doors in some other interesting ways. For example, the broad adoption of BACnet is enabling existing players in building controls and equipment markets to play the game in new ways. For example the open systems nature of BACnet allows suppliers to OEM products from each other, thus allowing participants to offer more complete product lines while reducing development costs for everyone involved. This “coopetition” model was not practical in the era of proprietary systems. Today it is very practical for companies willing to listen when opportunity knocks. While I don’t want to mention specific products to avoid turning this column into a promotion platform for particular companies, if you look around the industry you will see places where this is happening.

Another door that BACnet opens for controls suppliers is the opportunity to specialize in one or more narrow segments of the overall product space. Even small companies with limited resources can developed highly specialized expertise, channels and/or supply chains that enable them to out-compete the large, full-line product companies. BACnet really opens the door to this kind of specialized controls supplier even in large, complex projects. Companies that have developed full product lines can also play this game if they choose to take specialized products to market under a generic brand name using a broad distribution strategy. Here too, if you look around the industry you will see some companies already migrating in this direction and I would guess it won’t be long before we see a consolidation of such products available through an appropriately branded ecommerce site.

The doors opened through Open Systems are not limited those available to suppliers. In fact, one of the most powerful strategies enabled by the open systems nature of BACnet is the user-driven alliance. Two types of user-driven alliances are emerging and will likely become important drivers in shaping our industry. The first type derives from a user who brings their specific suppliers of building automation-related products and services together in an effort to build a larger value proposition. These users are looking to leverage BACnet devices, web services and object models as a platform around which they cost-effectively integrate equipment, controls, information systems and services. As these suppliers work to meet the needs of their common customer they will likely find that cross-supplier innovation does indeed create larger value propositions. It can easily become a case of “two plus two equals six.” As this happens it will naturally lead to co-marketing and/or co-selling as that group of suppliers seeks to bring the new value proposition to more customers. Eventually this process will lead to new (and higher) performance norms throughout the industry but in the meantime the users who drive it and the suppliers who participate will benefit disproportionately.

The second form of user-driven alliance is one where users with common requirements work together to accelerate BACnet device implementation. For example, many retail store chains have stand-alone coolers for beverages and small selections of perishable food. Monitoring these coolers and periodically recording their temperatures can be beneficial from many perspectives, including regulatory and liability concerns. In the past retail chains adopted a variety of proprietary building control systems and thus had little collective leverage in appealing to cooler manufacturers for a network interface to enable cost-effective monitoring and recording. However, now that most building controls suppliers are migrating to BACnet, retailers have an opportunity to do exactly that. They can, if they choose, leverage their collective purchasing power to encourage cooler industry suppliers to provide a common BACnet interface that all retailers could readily use. Will this kind of thing actually happen? I can’t speak to stand-alone coolers in particular, but the door is definitely open for this kind of user alliance and I know some users who are looking to take advantage of it.

If the newly opened doors I’ve mentioned so far are, metaphorically speaking, the size of an entry door on a typical house, imagine this last door I want to talk about is the size of the door on a Boeing 747 airplane hanger. I mean, it’s really big. The other doors opened by BACnet allow existing players in the market to play in new ways but BACnet also opens the door for a wide variety of new players to enter the market. One place to look for potential new players in the building automation market is adjacent industries. For example, I recently noticed an announcement from a touch panel display manufacturer that I know from my industrial automation days. Their announcement concerned the addition of BACnet/IP as a communications option on their new line of panels. This company (and again I will refrain from mentioning names) has been doing industrial control display panels for years but never focused on the building automation market. They had no expertise in the wide range of proprietary protocols used in our industry and couldn’t justify the investment to develop them all. However, when they realized the building automation market was coalescing around BACnet as the dominant device-level protocol, they easily justified the investment required to develop a BACnet solution. As a result, they have new business potential, building automation customers have more product options and the bar for building automation display panel price/performance levels has been raised. As my kids would say, it’s all good.

Control Solutions, Inc There are a lot of suppliers in adjacent markets that might find our industry interesting given the kind of open systems enabled by BACnet devices and web services … especially when you consider the potential scope of “adjacent markets.” Even so, I believe there is another, even more interesting place to look for new entrants to our industry. And, it’s easy to find. Just look around you. In an open systems world anyone who has a bit of entrepreneurial zeal and expertise in at least one aspect of building automation is a potential new entrant. Industry adoption of BACnet as a device level protocol is creating an environment where new entrants can realistically make a business out of providing a single component, whether it’s a new sensor, a novel closed loop controller, a new display, a clever actuator or any one of a hundred other ideas that might be dreamed up by the person sitting in the cube right next to you.

Beyond the potential for new market entrants enabled by BACnet at the device level, BACnet web services will enable new entrants to play at the application level. I believe BACnet web services will continue to evolve toward a simple mechanism for any application (with authority) to access a wide range of operational and historical data relating to energy and automated building systems. This will allow anyone with expertise in analytical methods, visualization, data mining, diagnostics, thermodynamics or other relevant domain to spend evenings in their basement writing software with a realistic expectation of selling it to a reasonable base of users. They don’t even have to write full applications. Embedding their expertise in Google or Yahoo widgets might be all they need to do. There could be a lot of people out there who have the expertise and interest to develop innovative software applications or tools for our market. Where will these people come from? Well, you might just look in the cube on the other side of you.

Industry adoption of BACnet at the device level and BACnet web services at the application level opens a lot of doors for users and suppliers. To get the full benefit though there will be times when users have to step through a door bringing suppliers with them and there will be times when suppliers will have to step through a door bringing users with them. Either way, these doors have the potential to create dynamic, exciting growth in options for users, opportunities for suppliers and success for both.

Note: I want to thank all of you who sent me comments regarding my column on the “BACnet Puzzle” last month. As some of you have requested, I will be doing a column soon that further explores BACnet web services and its relationship to BACnet/IP. For more information you might also consider attending the web services session at the September BACnet conference in Dallas. If you want to send comments to me directly, email me at andysview@arborcoast.com.

As always, I have to include the following disclaimer: The views expressed in this column are mine and do not necessarily reflect the position of BACnet International, Teletrol Systems, ASHRAE or any other organization.

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