January 2005

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Jack Mc GowanEMAIL INTERVIEW -  Jack Mc Gowan & Ken Sinclair

Jack Mc Gowan, President of Energy Control Inc

Mc Gowan is President of Energy Control Inc., an Energy Service Company and System Integrator.  He is the author of 5 books including “Direct Digital Control” on Fairmont Press.  The Association of Energy Engineers named him 1997 “International Energy Professional of the Year and Admitted him to the “International Energy Managers Hall of Fame” in 2003.  Mc Gowan is a Contributing Editor with www.automatedbuildings and sits on the Technical Advisory Boards of Energy User News and Engineered Systems.

 2004 in Review

Sinclair:  How has your business been in 2004? 

Mc Gowan:  Fantastic, we saw nearly 50% growth and found ourselves working to create interoperability with technologies that we would have never thought likely.

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Sinclair:  Really, can you give me an example? 

Mc Gowan:  Sure, one of our projects was a feature story in the ASHRAE Journal in October, an exciting event in itself.  More interestingly though, this was a renewable energy project that included interoperability for a complex set of mechanical systems.  The technology is not new, ground-coupled heat pumps, but in recent years the term “Geothermal” has been applied to these systems.  As a result, the Department of Energy (DOE) considers this to be a renewable energy system, and the project won Energy Leadership Awards from both DOE and the National Renewable Energy Laboratory.  But you asked about integration.  The integration on this project involved a BACnet-based Building Automation System (BAS) from Delta Controls.  The first challenge was to integrate the DDC systems in four separate schools over the District Local Area Network (LAN) to allow for remote interface, programming and commissioning.  The BAS integrates sequences for individual heat pumps, as well as a closed loop reverse-return pumping system with variable frequency drives for the earth heat exchanger.  (See Jack's November article for more details.)

Sinclair:  Were there problems integrating to the District LAN or Information Technology (IT) / Internet issues on that project? 

Mc Gowan:  Yes there were, the first challenge was to understand the LAN structure so that BAS systems in the four schools could be tied back to a server for central monitoring from the District office and for Internet access.  BACnet IP was used for this integration, but the task was made a little more challenging because this District uses private IP addresses, and it was necessary to assign one of these for each system, and then one public IP address for Internet interface to all four systems.  A custom Real-time Enterprise Dashboard™ was also built to allow District staff and School Principals to view their systems using browser technology.

Sinclair:  Do you think this type of integration is a trend? 

Mc Gowan:  Yes Ken I do.  IT has been a growing force with BAS for quite some time, but in 2004 every new project we did incorporated Integration and Interoperability with IT and Internet access.  To keep it simple let’s just call it integration.

Sinclair:  Are you sure that integration isn’t all just hype?

Mc Gowan:  It is interesting that you should ask that Ken.  An energy manager in one of my seminars this fall asked the same question.  In all fairness, I think it is important to stress that this is a trend, and it is the leading edge integrators that are applying the market push.  Without question building owners have many needs that integration can fulfill, and we have seen several large projects this year that were driven by the user.  Universities seem to be in the vanguard of this movement.  Major integration projects underway or were completed this year at the University of Southern California, University of Arizona, Thomas Jefferson University in Philadelphia and several others.  Also it is important to note that some form of open system technology is being incorporated into new construction specifications more and more.  The flaw in the process is that many of those specifications are written with the premise that requiring BACnet™ or LON™ will make a system open.  The average automatedbuildings.com reader knows that this is not true and, even more importantly, that this does not imply that IT integration will be done.  So in my mind full scale (Building Automation and IT) integration and interoperability is a trend, but it is the leading edge companies that are driving that trend.  Generally speaking this is not happening in the main stream plan and spec market.

Sinclair:  What does this mean for control contractors?

[an error occurred while processing this directive] Mc Gowan:  Good question, but the answer gets a little complex.  First it is important to note that all control contractors are not using the same business model.  I had the opportunity to attend and speak at a number of sales and technical conferences this year and there was one recurring theme.  Price competition is getting more and more fierce in the traditional Building Automation bid market.  So the idea that an Integrator is going to add IT features, which are not specified, is ludicrous.  As a result many control contractors, especially those focused on the bid market, have gone back to the old strategy of educating the consulting community to specify integration.  Of course this is a very costly process and it is not guaranteed to succeed. 

In answer to your question, I think all of these things mean something different to each control contractor, based on their business model.   In my mind there are three prevalent business models in use by control contractors. The first model focuses on the bid market and those contractors are making every effort to sell to mechanical contractors and, as possible, educate a finite number of “friendly” consultants.  This model is not likely to be include any IT integration.  The second model is used by contractors, including Energy Service Companies (ESCO’s), who sell direct to owners using more negotiated sales.  The negotiated sales model offers more opportunity to sell integration, and this happens to a little greater degree.  However, integration is a discretionary offering and its' value must be justified.   As a result integration is a key component of these projects but often can not be justified by energy savings, customer desires or other factors.  True System Integrators use the final model which is a negotiated sale much like the second group, but it emphasizes integration as a key component of every project.  This approach requires very knowledgeable contractors and can be a great growth strategy.  Still however Integrators often feel that they have to bid some as well, so the nature of their projects varies.  This is perhaps a long way of saying that in 2005 control contractors should revisit their business models and carefully evaluate the long term viability including consideration of the Internet and IT.

Sinclair:  What is the state of Integration and Interoperability in early 2005?

Mc Gowan:  In light of the discussion thus far, perhaps I should first ask you to define Integration and Interoperability?  As noted above these terms are often misunderstood.  For purpose of this answer though I will consider the terms to encompass everything from interface between legacy BAS Systems via web browsers to XML based Web Services for system access to utility and weather data.  With that premise, I believe that full scale integration is here technologically. I also believe that a great percentage of the Building Automation business includes some level of integration, though the age of Web Services has not yet begun.  However, asking about the state of integration implies a larger perspective on the industry.  It is harder to pinpoint the state of the integration business as a whole because it is manifested in a very diverse group of efforts.  For integration to be discussed as a business or an offering, it must be clear what the product is, what need it fulfills, what customers need it and what is its’ value?   Recent progress has been made by drawing wide-scale attention on the answers to these questions through the efforts of Automatedbuildings.com, BuilConn and CABA.  Integration is alive and well with a large number of companies focused on bringing its’ true promise to their customers.   To keep this process moving Integrators must also be prepared to match the technology metamorphosis they have undergone in the last decade with a business metamorphosis.  It is my belief that a diverse series of activities and market forces are driving integration.  Yet it will be some time before it is effectively implemented in the traditional bid market.  This business metamorphosis will require Integrators to become much better at selling the value of this technology.  Further they must also be students of trends that will help drive the Integration business.  One such trend is the energy sector GridWise effort.  This is an initiative to apply IT to the national electric grid that will result in the development of energy Web Services.   One near term manifestation of GridWise is targeted at automated demand response using BAS to shed electric load.  Another important indicator of industry health is that BuilConn saw a fivefold increase in attendees from 2003 to 2004, and that a GridWise track is planned for 2005.  All of this indicates to me that there is a tremendous demand for information and sales tools.   There is work to do, but it is clear that Integration holds great business potential.


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