A LONG-AWAITED WAVE OF DISRUPTION
combination of new technologies and new service delivery modes has set
the stage for a significant wave of disruption in the smart building
systems arena. New software technologies are leveraging diverse data
from equipment and larger systems, creating the potential to unlock new
operating values and user experiences for owners, occupants, and
And yet many participants have been holding their breath for a long time,
waiting for its arrival. The smart building systems market forever
seems poised to be entering a new period of transformation, but it
always falls short of the finish line.
other connected systems, several factors inhibit the evolution of smart
modern buildings. Traditional building automation system (also known as
building management system or BAS/BMS) offerings have focused on
reducing energy consumption and improving operating efficiencies. And
yet today, despite these devices being integrated and enabled with
network connectivity, OEMs and suppliers have largely been unable to
unlock the value of Smart Systems—and ultimately their own
devices—because they consider the opportunity too narrowly through the
lens of aging business models and practices.
Source: Harbor Research, Inc.
KEY CHALLENGES FOR SMART BUILDINGS
A few key challenges facing the evolution of the buildings space include:
- Building Data is Still Locked in Building Devices and Equipment:
Value creation is dependent upon interoperability of equipment systems
to aggregate and analyze diverse data types, and yet this
interoperability largely doesn’t exist. We still live in a hopelessly
- Archaic BAS/BMS Architectures:
Traditional BAS/BMS solutions are often developed on aging
client-server architectures that make applications very monolithic and
software updates and extensions difficult.
- Complex Systems and Solutions Delivery:
With a fragmented equipment and service landscape, building owners and
operators are unable to manage their various operational systems
seamlessly with one provider. The more that OEMs and service providers
offer solutions that are unable to interoperate with the entire ecosystem of devices that buildings require to function, the more difficult it becomes to manage the building as a whole interconnected system.
- Fragmented Vendor Landscape:
Many OEMs and service providers are not savvy about network security,
and still (unsafely) recommend putting building systems on the
internet. Moreover, if several vendors are all implementing equipment
in the same building, these devices do not operate on the same networks
or cooperate with existing data architectures, rendering them unable to
be a part of an Integrated and optimized Smart System.
- Superficial Understanding of Smart Systems Value Potential:
Many building owners and operators are still very cost-centric which
inhibits developing a more strategic view of new technology
investments. They tend to believe that the upfront cost of new network
and software technologies is too high to guarantee reasonable returns
which, in turn, often causes under-investment in the technical
infrastructure required to support more data intensive systems.
Source: Harbor Research, Inc.
CLINGING TO THE STATUS QUO
building system providers move toward Smart Systems, many are trying to
do so by simply “bolting on” new digital capabilities and emergent
technologies without considering the need to address other critical
strategy and operating elements.
rising intelligence of equipment and devices, and the new processes
required to leverage their data, challenge existing supplier operating
models and protocols. Equipment suppliers, contractors and engineering
firms are purely transactional and walk away following the completion
of projects. Building industry OEMs have bundled equipment, software,
and services contracts for major customers in a largely unchanged model
since the early days of BAS/BMS.
clinging to the status quo is not exactly a recipe for success in a
rapidly evolving market where digitization is redrawing the competitive
DIGITAL TRANSFORMATION IS A SUBTLE DANCE
digital transformation still involves a subtle dance of timing and
delivery. Technology innovation always moves faster than the
manufacture and marketing of actual products in the real world. This
creates a classic disconnect between the pace of evolution in silicon
and software versus the pace of change in an equipment sub-system.
of the ecosystem story is the ability to see where, and how fast,
things are evolving and thus get usable products in the hands of
customers before the next technological wave makes them obsolete.
that during the decades-long lifespan of a commercial building, several
cycles of major innovation will occur in various embedded devices and
equipment. Power distribution and HVAC systems have remained more or
less constant, but many other sub-systems—such as LED lighting—are now
designed in a modular way and can be swapped out when they become
addition, the increasingly software-controlled nature of these
components is making them rapidly displace hardware-based control and
communications, resulting in many building sub-systems being
re-programmable and updatable.
THE SPECIAL ROLE OF THE INNOVATION ORCHESTRATOR
though no one can predict precisely what the innovations will be, or
when they will come, the process by which they will be delivered is
becoming clearer. Digital transformation and Smart Systems innovation
are creating the potential for visionary players in the smart
facilities ecosystem to step into the important role of “innovation
orchestrator”—that is, to become the facilitators of the whole
companies that aspire to become innovation orchestrators need to stand
in their prospective partners’ shoes and work through the logic of how
these collaborative systems get designed, procured, and deployed. It
won’t be a classic linear cycle this time around. Old-fashioned
“customization” will give way to personalized configuration, while the
technology itself makes everything much more programmable.
this gives the orchestrator-leader an opportunity to reach out to new
ecosystem participants and build empathy with potential partners who
haven’t thought through these disruptions yet. Innovation orchestrators
who facilitate and leverage digital platforms will enable new alliances
based upon information-sharing and co-creation, and these partnerships
will become increasingly important from a B2B perspective.
Source: Harbor Research, Inc.
SYNCHRONIZING PLAYERS AND INNOVATIONS
will also need to help facilitate changes in how building systems and
sub-system elements are specified, helping to synchronize diverse
players and innovations. They will now take the lead in helping to
evolve solution delivery processes and policies. They will become
educators to their ecosystem peers on challenging issues such as data
privacy and data usage, as well as the inherent contention between
collaborating parties regarding personalization.
players in the smart building ecosystem are in an ideal position to
become innovation orchestrators, but they must learn to be responsive
to new trends, technologies, and evolving user preferences. In this
fast-changing environment, the orchestrator’s ability to identify
emergent trends and see potential discontinuities “around corners” will
become minimum requirements.
capability is more art than science and requires very acute observation
of the external world. Staying close to customers, vigilantly tracking
emergent technologies, and tapping alliance and ecosystem partners for
new insights and perspective are ways to stay acutely aware of change.
SHARING SMART BUILDING SYSTEMS DESTINIES
collaborative innovation communities means managing uncertainty. In the
buildings arena this will both inform and express strategy. Built to
pursue multiple aims simultaneously, a dynamic network of connected
products, developers, users and stakeholders will drive new information
values which, in turn, create new influences in the marketplace.
achieve success, companies will need to recognize the opportunities
offered by these collaborative relationships. Power in these new
structures will fall to those who best understand how to use
information and influence to get and keep key positions. More and more,
business success will be about appreciating shared destinies.