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Posted by Chris Mines on July 6, 2011
The promise of smart buildings is cropping up across the ICT industry lately. Our calendar of vendor briefings and events is crowded with announcements of new products, acquisitions, and partnerships as ICT suppliers seek to connect their digital and analytic systems with the physical world of HVAC, security, lighting, and other in-building systems.
There are a number of goals that smart building projects hope to achieve, including:
And since buildings represent 40-plus percent of overall worldwide energy consumption, they are a very logical place to focus attention and investment. The vendor activity in smarter buildings is running bi-directionally, from digital to physical and back again.
IBM's recent acquisition of Tririga was a catalyst for its early June announcements of a suite of smarter building control, management, and reporting capabilities as part of its broad Tivoli software product family. IBM's alliances with the physical world include relationships with Siemens, Johnson Controls, Eaton, and Schneider Electric, all purveyors of building HVAC, electrical, and control systems.
In the other direction, for example, Schneider Electric is working with IT suppliers like IBM but also with Cisco and Microsoft to create complete systems for energy management. We see three principal roadblocks for the ICT industry in realizing the potential that smart buildings represents:
The challenge within a particular customer is drawing the boundary of the physical-to-digital interface. All suppliers agree that the higher-value functions -- i.e., those aimed at customer executives -- include data analysis, interpretation, and visualization. These are based on instrumentation and data feeds from a building's mechanical and electrical systems -- i.e., those run by the facilities and operations teams.
But the boundaries are not clear. Where does a "building management system (BMS)" end and an "intelligent building management system" begin? How do the physical and digital systems interface? -- and no, saying "Web services software" or "open standards" is not a sufficient answer! And, critically, how do the different constituencies with a customer -- facilities, operations, IT, sustainability, etc. -- come together to create and approve a business case for investment?
The challenge in building a broad customer base is that the vendors so far are finding opportunities in sectors that are not especially fast-moving or driven by competitive pressure. The early customer examples cited by IBM, Tulane University, and the Metropolitan Museum of Art, typify this challenge.
Schneider as well mentioned education, hospitals, and government as targets for its smart building offerings. And yes, these customers have the multi-building campuses and energy-intensive facilities that make them, theoretically, good targets. But technology buying by the public sector and educational/nonprofit institutions tend to be notoriously sluggish and lumpy -- not exactly the characteristics that will feed a fast takeoff for this category.
The challenge even more broadly than customer sectors is the "clockspeed" mismatch between the IT industry and the buildings/facilities operators. Think about the investment, planning, and development cycle-times in those two sectors: One moves in weeks and months, the other in years and decades.
Yes, the software content of buildings will grow, just as it's done for, e.g., autos over the last decade or so. But buildings will remain the ultimate fixed asset, with a lifetime measured in decades, while software decays and refreshes much, much more rapidly.
This mismatch will show up in the different expectations and decision-making cycles of potential customers for intelligent building systems (just as we expect it to in the utility industry, where the "smart grid" has been the next big thing for the last 20 years or so). What are you seeing as IT and facilities teams start to work more closely together? As always, we welcome your bouquets and brickbats in the comments below.
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