February 2009
  
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Subtle Winds of Change in Windy City

A perfect storm of change if you understand the big picture that has been a constant theme on AutomatedBuildings.com for months if not years.

   

Anto Budiardjo
President & CEO,
Clasma Events Inc.

Contributing Editor 

ASHRAE 2009 had a number of subtle undercurrents of change that are worth reflecting on. The importance of these changes could have been missed in today’s economy constrained times, but become a perfect storm of change if you understand the big picture that has been a constant theme on AutomatedBuildings.com for months if not years.

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The end of the independent middleware

The acquisition of Richards Zeta by Cisco, together with the acquisition of Gridlogix by JCI a few months back signaled the end of the independent middleware company in the building control space. Is this a good thing or not?

Well, there are of course a number of new players, possibly ones that are better suited to provide middleware in the new paradigm that we find ourselves in today, with energy and climate change being the key drivers. The problem is that some of these may not look like middleware companies in the traditional ways.

Consider OpenLynx, an initiative to create an Open Source middleware platform that, like all other Open Source initiatives, is free, and thus can be used by anyone and theoretically cannot be acquired by a major player and thus will be guaranteed to remain independent. Under this model, companies can focus on creating valuable applications around the common middleware, for as most people have realized, middleware in itself is not valuable.

This can be seen in Tridium’s move toward Vykon. Tridium is fundamentally a middleware company, but their Vykon offering seems to be more of a control company – an application using the middleware created in its early days. Why Honeywell needs yet another brand is an interesting question for another time.

Wonderware could be seen as middleware looking for a place in commercial building control and facilities management. After many years focused on the industrial automation space, Wonderware (owned by Invensys, though no longer the building controls portion) is now entering as a middleware and user interface solution for buildings. They know a thing about middleware and SCADA applications, so watch this space.

The importance of middleware is clearly there by these acquisitions, as to the future of this space? We’ll have to wait and see.

The growing impact of the grid

Over the past two years, AutomatedBuildings.com has had an increasing number of articles and interviews on the relevance of buildings in the future of the electric grid. In Chicago this year, this almost became a crescendo with a number of grid related discussions over the three days, at the educational sessions as well as at the B2G Summit on Wednesday.

The application that is most important in this area is Demand Response, which also was discussed in many booths and hallway conversations. The impact and value of DR to building automation is huge, why integrators are not more willing to get involved in this “money for nothing” business eludes me.

The B2G Summit was a very interesting, interactive discussion on, among other things, the economics and pricing signals of energy between the supply side (the grid operators) and the consumers (buildings). Also discussed were federal initiatives around energy efficiency and what they will do in this area.

This conversation still has a long way to go, specially in 2009 with the passing of the stimulus bill. Our events in 2009, from BuilConn, ConnectivityWeek, Grid-Interop and GridWeek will likely be well subscribed, so watch this area to explore the opportunities for building automation.

The war has ended, get over it

It’s strange to me how many people cling to unnecessary conflicts. The 1990’s were dominated (in the building controls context anyway) with the open standard war, initially between a number of contenders, and eventually between BACnet and LON (LonMark and LonTalk to be correct).

We’re now in the days of the Internet, the days where multiple communication protocols work together in harmony. This happens hundreds of times in our daily lives, when we send emails, when we visit various web sites, when we use an ATM, when we order pizza or movie tickets online. The only sensible application of standards, is how they can work together.

It seems strange that with this background there seemed to be a continuity of the BACnet vs. LON wars of the 90’s. It was difficult to miss that many of the vendors were absent in their own presence, but present at the BACnet International and LonMark booths. This I’m sure is a combination of economic driven caution and budget management as much as retrenching to communities still based on a vision of taking over the world with their brand of open systems.

Almost all of the controls companies “support” both BACnet and LON. Is this continued war still necessary? We have bigger fish to fry now gents.  Climate change is threatening our very world.  Let's work together and solve problems and stop this insanity!

I challenge the BACnet and LON community to make a New Year’s resolution (I know it’s a bit late) to join up and provide a common message as to how these standards can work together to solve real problems rather than trying to win an unwinnable war.

Widgets get more sophisticated

In many ways, AHR Expo has been the home of selling widgets related to HVAC. Clearly the rest of the floor away from the Building Control and Automation Showcase is predominantly widgets big and small, from Big Ass Fans to rooftop units and fasteners to ductwork.

This year, I saw a trend that widget makers were starting to get into technology and connectivity in subtle ways. Mamac was promoting their IP connectivity platform that provides a way to collect a number of sensors into an IP based Ethernet connectible platform. They also are starting to use Powerline carrier solutions, based, as I understand it on the HomePlug standard.

Also interesting was Cypress Envirosystems offering, to replace pneumatic thermostats with a device that makes them into basically a DDC controller, connected via a robust wireless network. In addition, to this, devices that physically attach themselves to other mechanical devices that read physical gauges to send information out again on wireless devices.

There was an underlying conversation about Parts and Smarts. Parts being the “dumb” widgets that are fundamentally necessary for building automation, and Smarts being the intelligent, clever stuff that happens at the supervisory levels and above. Parts and Smarts have always been there, it’s the relationship between them that seems to be changing.

PlantPROCORE Things are changing very significantly in the architecture of building automation and control systems, from top to bottom. The traditional control system, an easy to understand collection of controllers connected to sensors, actuators on the lower side, and supervisory and management above, this model is changing to sensors and actuators connecting directly (or very close) to IP layers.

Is this the trend we’ve been waiting for, a true IP based control system for buildings? A system without middleware?

Bad economy forces change of habits

We’ve not seen the numbers from the show organizers, but it’s clear that the rush and crowd of past Chicago AHR expos was not there in 2009. There were many “lounge booths”, spaces that vendors contracted but did not show up for, presumably due to cuts in marketing budgets.

In past years, getting a hotel room in Chicago was hard, especially at the main show hotel near the McCormick Place. This was not so in 2009, where many reported economically priced hotel rooms were readily available throughout Chicago. Clearly travel restrictions were having an influence in the number of people companies were sending to this annual pilgrimage.

Marketing materials were also under pressure, there was a distinct reduction of giveaways like bags, as well as “trinkets and trash” at the show. One would like to think that this was to reduce waste in an effort to be environmentally friendly, but alas I think it’s more to do with making marketing budgets stretch in times of budget tightening.

I think this is a good trend, let’s focus on things that matter, be more efficient in the use of our time and resources. It’s good for the environment and more likely to get things done.

Spend the billions wisely

When I started to be involved in the controls business, I recalled a presentation made by an expert stating that the size of the industry was $11b worldwide. The large companies involved were measured in hundreds of million dollar revenues, those reaching $1b considered one of “the majors”.

It was therefore strange to hear many mentions of billions in the course of this week in Chicago, it seems that the recession, with the bank bailout, stimulus and trillion-dollar deficit are making us all blasé about talking in billions.

First there was the long awaited entry of the $40b networking giant Cisco into the building space, with their acquisition of Richards Zeta. I have heard many times that companies like Cisco don’t get into a new business unless they can forecast a billion dollars of business, so one can only assume that this acquisition is an indication that they see this in their future in buildings and energy.

On Wednesday, the U.S. House of Representative passed the economic stimulus bill, worth some $819b. Of this amount, several tens of billions dollars were allocated for building efficiency of government buildings, allocating a few $5b contracts to several energy services companies over the coming years. Some $11b has been allocated for smartening up the electric grid, which should include projects related to buildings where controls can play a role.

The urgency in this stimulus bill is huge, an urgency to create jobs to revive the economy. I must say that I’m not the only one that’s concerned that this money is spent wisely, and to do the right thing with respect to implementation of technologies that we’ve been working on for years.

Let’s not be blinded by the need to spend our money, it’s a huge opportunity to move our collective agendas forward.

The perfect storm

Observing these trends, it is clear to me that a perfect storm is gathering. From trends toward a focus on energy, to architectural changes in control systems, to some interesting financial incentives to do things well and to the entry of new players. The business of building automation is definitely not business as usual.

For a direction to the future, how this storm will turn into tangible change and opportunities, I strongly suggest that readers attend the upcoming BuilConn event in Santa Clara. All of the issues discussed here will be covered in Santa Clara, in a way that will start to rationalize how the industry will morph into an effective contributor to solving the challenge of our generation – climate change.

Look out for more on BuilConn over the coming months on AutomatedBuildings.com, it will be an important gathering for your company’s future. www.BuilConn.com

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