June 2005
  
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Building-IT Convergence…What Next?

Anto Budiardjo
President & CEO,
Clasma Events Inc.

Contributing Editor

In this four part article on the future of Building-IT Convergence, I will cover the driving forces, trends and predictions on how our lives will change as convergence will take root globally. In part 1 this month, we will look at the true impact of the Internet, and in part 2 we will look at the change Convergence will bring to the stakeholders of our industry. Part 3 will explore what needs to change in the route to market of building system solutions and part 4 will tie it all together with some predictions and suggested action for those interested in playing a role in the future of buildings.

It has been three years since I ventured out on this wild convergence ride. After over a decade of developing and marketing software and hardware products, the step I took in 2002 was somewhere between foolish and brave, and though I’ve not had the time to analyze which, it’s been a non-stop ride!

In this four part article on the future of Building-IT Convergence, I will cover the driving forces, trends and predictions on how our lives will change as convergence will take root globally. In part 1 this month, we will look at the true impact of the Internet, and in part 2 we will look at the change Convergence will bring to the stakeholders of our industry. Part 3 will explore what needs to change in the route to market of building system solutions and part 4 will tie it all together with some predictions and suggested action for those interested in playing a role in the future of buildings.

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Much has happened in three years: open systems is now an accepted norm (though people still debate the flavor); the number of controls vendors have almost halved through acquisitions; system vendors are either marketing or busily developing XML- and Web services-based solutions; integrators are now more aware of the benefits of a converged building; wireless is now the big buzz; and we all realize that the building automation and controls industry is not the only one interested in connectivity between devices/machines (M2M reaches all manner of industry segments).

The promise of M2M is nothing short of incredible. Harbor Research consistently talks of M2M as the trigger for the next phase of the Internet, one that will eclipse the size and magnitude of the existing Internet and change (yet again) how we live, work and play. This has potentially enormous impact on commerce and on the buildings where we spend a significant amount of our time. Making things (products) is no longer going to be the challenge and neither is technology; we learned at BuilConn 2004 the barrier to entry for product development gets lower every year, while the manufacturing cost (thus selling prices) of widgets gets lower, as manufacturing power houses like China continue to produce better quality things we need at lower cost. Wait until China starts to mass manufacture commodity controls products, now enabled by open systems!

The general world and regional economies are showing signals of strengthening, oil prices are on the rise—bad for summer vacations, but good for energy management business. While we never totally get used to being on some level of terror alert, even this has become a part of our lives today. My financial contacts tell me over and over that Wall Street (as well as your neighborhood streets) is awash with money looking for good homes.

One thing that BuilConn has helped in the past three years is the definition and building of a more cohesive intelligent building industry; I am humbled in our contribution in this area. The fact that Frost & Sullivan awarded yours truly with a CEO of the Year Award in 2005 is a clear and strong testament that this space is growing, it is important, and it is starting to have some common voice and proposition.

Most important of all these changes is that building owners are starting to voice their desire for all this stuff we have been talking about for years. “Yippee!” I hear you cry, quite rightly too – about darn time – so we should all be busy, rushed off our feet implementing smart intelligent buildings, right? But I see hesitancy in the market…what’s going on?

Everything seems to be on hold – I hate being on hold, even when listening to music!

Not being one to accept unacceptable situations, I have to ask why, or more importantly, how can we as an industry break this hold cycle? The technology is here, the will to deliver is here, and the market wants what we have to offer—let’s try and figure out how to make the connection.

I propose a number of areas where we can get things moving.

The Internet

Reliable Controls We saw in the nineties as the Internet took hold that the way that technology was adopted for the betterment of the end users (and thus suppliers) was not a continuation of business as usual. Experts agree there are generally two ways to look at Web sites and the Internet: either as a communication medium or as a business. Let me explain.

For most of us the phone and the Internet are essentially a communication medium. We use the phone to talk to people about our business, but our business is not the phone. Similarly we use email, the Internet browser as a medium to get access to information and exchange messages. If you have a Web site, it typically contains information about your company so that prospective customers can understand what you do. Again, neither your Web site nor the Internet is your business per-se.

At the beginning of the Internet, many organizations used the Internet initially as a communication medium. Airlines, banks, book stores and other types of businesses placed information about themselves on their Web sites, a great start! Then these companies started to really use the Internet, the term eCommerce was born, and now these companies’ business is the Internet. I had to open a bank account recently and the bank clerk had no paper forms to fill-out, doing all on the bank’s web site, and finally printing ready-to-sign PDF forms for me. Airlines (especially the low-cost carriers) rely on the Internet to conduct their business. While in these two examples the core business (money and airline seats) is not the Internet, they have integrated the Internet and the Web into their business so thoroughly that it would be impossible for them to operate without it.

Now, I’m sure you’re reading this saying, “How can we use eCommerce in our business? We’re not in that kind of business!” Also, you may be thinking that with the plethora of Web-based building control systems, you are already using the Internet; however, you are looking at the wrong perspectives!

If you look at what airlines and banks get out of the Internet, it is not efficiencies resulting from lowering the cost of opening an account or selling a seat. What they got out of the Internet is a much better and closer relationship with their customers. Their customers are able to get much better service and a much better array of information about their products than before the Internet. The relationship between the supplier and customer is now strangely much more intimate despite the lessening of human interaction.

So, in the buildings industry, we need to get past using the Web and the Internet simply as an add-on communication medium, however cool and wizzy our Web site is and how ever good the Web-based interface your system vendor is providing to you. You need to turn the Internet into the core of your business and not some periphery supplement.

You need to find ways to leverage the Internet to become your connection to your customer’s business, their buildings, their day-to-day problems, their objectives and their successes. This starts with a demand that you must make that all of the systems (I repeat ALL) you design must be connectible with native IP technologies and with gateways only when necessary to link to legacy systems and non-Internet standards. But this is only the beginning.

The key to getting the level of intimacy from the Internet is to provide services that your customers use as part of their daily lives. Provide a service that they cannot do without, one that ties them to you in a way that no proprietary protocol could have ever done. Your Internet-based service must become the center of your business and the center of your customer’s interaction with their building (and thus, with you).

You must develop an Internet strategy that channels as much of the interaction between your customer and their buildings through some Internet-enabled mechanism, be it a Web portal, Email notification, wireless PDA based-tools or some other online mechanism. As you present your offering to a customer, you should look and design all aspects of the offering and your behavior so as to revolving around some Internet enabled “service”.

Look at it from your customer’s perspective; remember, they have a busy life. They should be able to use the Internet to do everything they need to do, including the ordering process, the implementation process, and most certainly, in the operation phases as well as in their on-going need for further services from you.

PlantPROCORE You must also look at it from your point of view. It is critical that you have access to all of your customer’s systems, devices and information using the Internet, and I don’t mean having access via some Web server on your customer’s site either. The Internet must be a systemic component of how you understand and respond to your customer’s issues. There is no excuse whatsoever for a need to visit the site to diagnose, re-program or re-configure anything in a well designed Internet-based system. The reason to go visit the site should be to replace known defective items or to spend time with your customer (the human-relationship element), to understand their issues, and hopefully find a way to provide an Internet-based solution.

One way to look at this is to decide which of your current activities you need to stop doing so as to provide better service for your customers. We have a fundamentally wired expectation to do more in our business, more people, bigger facilities, etc. Leveraging the Internet often involves doing less to achieve more. Banks now have fewer paper forms and process, which means fewer people also, while airlines have less agents on the phone, less agents at airports and rely less and less on the traditional travel agents. If you are to re-organize your company, I propose you place the Internet at the center of your business and build around it.

Words that you should be embedding into your operation and offering are technologies such as XML and Web services, mechanisms such as hosted service (ASP), Web portals, integrating tools such as commissioning, maintenance, alarm management, and of course, the different flavors of wireless.

It was not a long time ago that names such as eBay, Amazon.com, Priceline, Expedia, Google and other similar types of new Internet-enabled businesses were unknown to us. I wager that in five years time, new types of businesses will exist in the building systems space, and they will be doing things that provide building owners with such a compelling proposition it would not take much for them to buy in.

Next month read Part 2 of this 4 part series of articles which will deal with Stakeholders.

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