Jump into the Monday Live! Conversation

In the early of months of the COVID-19 outbreak in the United States, Anto Budiardjo launched Monday Live! – a recorded chat session among about a dozen BAS industry notables (links found at www.mondaylive.org). For about an hour every Monday, the group talks about how they are experiencing the pandemic; Covid-19’s impact on their business, and strategies for navigating these unprecedented times. The MondayLive! panel members tend to be news hounds, so the typical show starts out with a review of noteworthy headlines and social media posts with implications for the world of building automation. The panel also generally agrees that the following five trends were underway in the BAS industry before Covid-19 hit and that they are accelerating now:

So, each episode, we discuss one or more of these trends at length, often with guests that add further depth to the conversation. In July, Brian Turner of Buildings IoT/Controlco/Kodaro and Brian Oswald of CBRE/ESI joined the Monday Live! panel. With this mix of guests, the conversation delved into both their Master Systems Integration (MSI) businesses, as well as BAS-related software/hardware distribution businesses, touching on a majority of the 5 trends. Here is a sample of some of the insight gleaned from those guests.

Brian Turner: A lot of our MSI business is with enterprise-class customers with large, international property portfolios. As an almost immediate response to Covid, we saw several of them pull budgets for work under development, delaying them until 2021. On the other hand, they continued work that was in process, creating this dichotomy: our distributor/reseller business has lost some momentum; but, our MSI business is winning and securing brand new contracts throughout Spring and Summer 2020. Basically, the heavy investment we’ve made in secure remote communications and implementing secure BMS technologies over the last several years is paying off.

The Buildings IoT MSI team is spread throughout the country, lightening the implications of air travel restrictions. And, we’ve learned how to secure contracts over Zoom meetings. But, the main thing that has kept us working despite Covid is that we can do the knowledge-work of integration-planning and deployment remotely. Our field technicians were the only ones that felt strong impact from not being able to go into the field. To the degree possible, we turned them onto remote working too, for example teaching them to do some pre-configuration in preparation for an eventual site visit. Then once construction activity was allowed again, we were able to get back onto those projects too.

Brian Oswald: We’re also seeing increased demand for remote monitoring services. ‘Remote’ was a nice-to-have up until a few months ago—it seems like a few years ago—but now it is a need-to have. If the people running the buildings cannot be in the buildings, they need remote monitoring. We're excited about where this is taking our service offering. It seems like we're getting back to the core of solving building operation functionality challenges. We are seeing a lot more customer interest in how smart building technologies can help them do operations better, smarter, more efficiently, utilizing less people.

Roller Coaster Ride of Covid Era

Brian Turner: Prior to Covid, the amount of construction that was going in the backlog was huge. Then, we had that blip, where everything was locked down. After that, as construction started releasing, on our distribution side, we saw orders coming in. And then, on our integration side, we were able to start executing work, aided by remote connectivity. But, I think that this is a short-lived phase of activity. Next, I’m bracing for a short blip of time where we see a downward trend for product sales. But, after that, I think there could be great opportunity for MSIs and product distribution as owners re-envision buildings.

Brian Oswald: We are fortunate because we have customers in the ecommerce space. Covid created a big business boom for them, which then led to big business opportunities for us. So, our product sales have increased, as a function of the volume of work we are doing. There is another factor influencing sales as well: With Covid, solution providers are starting to bring more diverse products to the market. I would say they are working to embed in their products more specific problem-solving capabilities. Whereas six months to a year ago, a product would have been a general-purpose IoT device, now it has a specific target for its embedded sensing and software and is being marketed as an occupancy tracking device. Suddenly, the product makers have captured more customer interest because knowing where occupants are located -- being able to gauge density--is the focus right now. The underlying technology is the same, but the product is getting a lot more attention.

Energy Focus Transforms to Healthy Building Focus

Brian Turner: Yes, it is funny how energy teams have become healthy building teams. They have adjusted their focus toward air quality and air changes. In California, we have had stringent Title 24 guidelines on these aspects of building performance forever. But, when it comes to operating buildings in other states, many enterprises have not made a point of running continuous fans or using Merv 12- 13-, 14 -type filtration and air handlers. They haven't been really monitoring outdoor air. They haven’t made the most of their economizers. And I would say that, while the focus has certainly been elevated, they are not making a lot of strides yet. The enterprises that have energy teams have certainly expanded their focus to encompass healthy ventilation strategies. But, for the most part, what we're seeing is a wait-and-see attitude. Before investing in new solutions, they want to do everything they can with the systems they have. So, like Brian, we are busier than we've ever been. It does feel like that. But we're doing more software work. We have a lot of people coming into our cloud and into our service business. Clients are asking “Help me report on our indoor air quality. Help me report on our fresh air changes. Help me systematically shut down buildings that are less occupied or not occupied at all. Then, help me report on that. When it is time, help me bring buildings back up.” So, there's a lot of labor sales going on right now. That doesn't always translate into new products going in, but it does translate to more implementation of control strategies or even analytic strategies. I agree with Brian's point about remote monitoring in the time of Covid rekindling customer interest in all the capabilities of smart building technology. All those things that we’ve been telling customers for years that we can do, we spent a lot more time actually doing them over the last six months.

When Will We Get Back to the Office

Brian Turner: I'm in my office. But, of the 30 people from our company that work out of this office, only three come here now. Again, our team is mostly capable of working from home and working remotely. In terms of the whole office complex, it is occupied at about 20% its normal rate. I rarely see another human when I’m here, so the chances of spread are very low. There is low danger in coming into the office. But the anxiety level is high. Everybody is anxious to return to any kind of normal – but they feel uncertain that it is safe. Uncertainty is having the biggest impact on our business.

Brian Oswald: We're not fully returned to the office yet. Much like Brian said, there is still real concern out there – both from occupants and those who operate offices and other workspaces. Any real estate management company will tell you that there is still great uncertainty and that tenants are weighing partial return against full return. It’s something that they're trying to figure out as time goes on. Covid case numbers are going up and down region by region, further increasing the feeling of uncertainty. The idea that on or near January 1st, 2021, that we will be back to normal as if a light switch has been pulled, I think that is a little far-fetched. I don't believe many people thought we'd be living in what feels like a rolling pandemic for as long as we have so far. And as every month goes by, and the conditions change, the variability of what the future holds, also changes.

We feel very blessed to have the opportunities that we have and the growth that we've seen during this period. But I think the threat of a long-term toll on general construction is real, and it's something we must prepare for. I read one report that warns the construction industry at large won’t come back to 2019 levels of activity until 2024.

On the Future Outlook

Brian Turner: The spending of institutional or enterprise-class customers is largely a function of consumer confidence. And when consumer confidence is destroyed abruptly, it has an immediate impact and comes back gradually. I'm optimistic that it's coming back. I just don't know when. It would be great if it came back January 1st, 2021. But, like Brian, I'm pessimistic about that. Even if consumers can get back to normal spending early next year – whether they are doing that via ecommerce or physical retail – it will still be months before enterprises start opening their pocketbooks again. Complicating this normal cycle even further is the fact that, as you said, commercial office buildings are not opening very quickly and there is a general rethink about office space for knowledge workers.

Brian Oswald: Yes, I think we are going to see a lot of enterprises push projects out into the future. I think they’ll work through those projects currently on the books, queueing up the most urgent of those for 2021. But everything else I think is going to be a little bit slower as people try to figure out what this new environment means for them.

Brian Turner: I think of now as a time when people are re-envisioning what buildings need to be, and re-envisioning what restaurants need to be, and re-envisioning other building types too. Consider, if people only come back to commercial office space at 30% to 40% of former occupancy, then that means property owners are going to have to do something with that square footage. Humans are innovative. We're not going to let buildings just sit there. We will figure out the next thing to do with that real estate. And that will present a huge opportunity to MSI’s who are willing to look at things differently. Afterall, the core reason MSI’s are MSI’s is that we look at things differently.

NOTE: There was a lot more to this conversation. To find links to full videos, transcripts and panelist bio’s, go to www.mondaylive.org. Note that the views expressed on the MondayLive! Show and here in this article are those of the panelists themselves, rather than of the organizations or companies with which they are affiliated.

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