Konkana Khaund's Blog

What do we expect to see in the Intelligent Buildings Industry in 2014?

19 Dec 2013 | by Konkana Khaund
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As 2013 comes to a close and we all eagerly await the new year to unfold, I am sure each of us are going through a time of reflection on things gone by, and an anticipation of what the new year holds for us. No matter how much of a surprise we expect, it is almost uncanny that things to come are often predictable to a certain degree, and largely depends on how we shape them to impact our lives and businesses. The intelligent buildings industry is no exception to that rule. I am sure all of us involved in this space are already forming our opinions and mental picture of what we may see unfold in 2014. Weighting the good and bad in our industry over the last few years, I strongly feel that some of the following trends will mark the 2014 industry trajectory:

Leading with financials: Move over energy savings, incentives, rebates, low hanging fruits. 2013 already ushered in a period where increasingly building owners are looking at those buildings as financially lucrative assets that will appreciate in value multi-fold if the right investment decision is made. As this resonates with more and more asset managers and owners, we will see a strong shift towards the need for financial optimization on a long-term basis, including operational maximization from their assets, whether or not energy provides that initial boost to consider investments. Of course, needless to say energy would still be the winner in the long term as the right technology and investment choices get made.

From technology to apps: Not just technology sophistication, but what technology can achieve for the building owner and operator will drive the show in 2014. The robustness in hardware and software may well be in demand. But ultimately it is the user experiences, interfaces, mobility-on-demand, and scalability that will determine how adoptable technology will get. With smart devices ruling our existence today, the building operations world is no longer being controlled from the plant room. There will be an app for every function to control, monitor and predicatively optimize our bindings.

Acknowledging the Cloud as the best fit: For all things that will rely on a control point, the cloud will unanimously be acknowledged as the best answer. The need to manage huge volumes of data and making sense of it all has already brought the importance of the cloud to the forefront of building management. Reducing the burden on local storage, growing complexity of demand from tech-savvy FMs, increased demand on networks and bandwidth are all inevitable reasons why migrating to run applications from the cloud will be the natural progression. 2014 will likely do way with some of the reservations that kept this migration at check so far. Besides the fact that intelligence in building systems and devices no longer need to rely on middle-ware integration, with smartness being deployed directly into devices that interact from cloud-based platforms will make the cloud a distinct reality for intelligent buildings in 2014.

Continued innovation and entry of disruptive technologies: The entrepreneurial spirit will continue to help offload nascent and promising smart technologies, devices and apps into the intelligent buildings solution portfolio. And it is the small and medium sized entrepreneur, not the established OEMs of the industry that will be the active contributors. Be it energy management, analytics, third party services, smart device integration, value-added apps, they will continue to come out of nascent suppliers who do not need to rely on huge operational expenses, hardware sales, manufacturing capabilities, or brand presence to be part of the game. That doesn’t mean the established large OEMs will step aside. For them, leaving any part of the business on the table is not an option. However, true innovation with absolute technological differentiation from what they already offer has not been forthcoming as a prominent part of their business proposition in the last few years. It is the SME that has stolen the show. And tying up for an alliance with these promising newbies makes far better business sense for the large OEMs, and also helps these nascent providers to ignore their lack of brand presence in capturing market attention. This trend will continue through in a big way in 2014.

Adopting the intelligent building operating system (OS): The OS is no longer just limited to running our PCs and other IT-aided devices. To truly move over to the next generation of intelligent buildings it is imperative that buildings should get their own intrinsic OS to build its intelligent architecture of automation, connectivity and interoperability, supervisory control, energy management and analytics, diagnostics, and adopting a fully converged IT-aided infrastructure platform. While this should have been a precursor to several intelligent building-related developments, it is still not too late for an industry wide open effort in 2014. Not to ignore the various options of OS that presently exits in the intelligent buildings industry, from digital building OS, to IT-centric, controls-centric OS that are already being used as the basis of an intelligent building framework. However, some consolidation efforts are needed in that direction to come up with a robust and truly scalable OS that an intelligent building could benefit from. Standardization of data modeling is a key issue here. Open collaboration is important, and the good news is that the collaborative community in the intelligent buildings industry has been fairly active on a number of initiatives already. Let us hope that the intelligent buildings OS initiative from all such efforts gains good momentum and leads to some fruitful results in 2014.

Due attention to cyber security: Cyber security vulnerabilities are a valid concern for all involved in this industry, particularly the c-suite of decision makers and their executive management who cannot afford to expose themselves even to the slightest bit of risk in running their intelligent buildings business portfolio. With increased remote controllability and data flow, buildings are overtly being driven to security risks than before. While this topic has seen adequate attention in the last few years, it is clearly gaining more traction now than ever. As security risks invade the BAS, the need to secure remote connections, data storage, managing access rights and privileges to devices, audits and activity sessions of operators are all gaining reasonable importance. Reducing vulnerable points, increasing oversight, and protecting sensitive organizational inputs and outputs are absolutely necessary. While some of this is technology and software driven, there is a significant part of this that will need to be driven by compliance attributes, and even regulations and privacy issues. This is yet another area to witness collaborative initiatives from vendors, users and regulators in 2014.

The exit trend: Just as realization of the green washing concept led to the subsequent exit, or weeding out of a spade of companies in the mid 2000, it will not be surprising to witness some similar exits and weeding out of those numerous solution providers, particularly within the ‘value-added’ technology segment, the energy management segment and online operations/management services that have only added confusion, rather than real value to the end-user in the last few years. Clearly there is no comprehension of what these operators have to offer, or has there been any distinct value derived from using their tools and services for any building owner. Operating mostly as point-solution providers, this category of market participants have struggled to carve a niche for themselves within the intelligent buildings and energy management industry. 2014 will witness some of them make their inevitable exit, or else get weeded out with end users unceremoniously side-stepping these for more comprehensive and value-driven robust solutions available from true innovators.

And finally on the wish list: It is great to see large campuses and portfolio of buildings leading the way when it comes to marked changes in building intelligence. However, the industry has waited apprehensively for the mid-to-large sized single buildings to make it to that list. Some of these buildings are already strong adopters of intelligent building solutions and are operating as fully simulated entities, equally capable of proving best practices and business cases just as their large C&I counterparts. However, they have either not been very demonstrative of their initiatives, or OEMs and services providers have not spent much time investigating this opportunity. Let’s hope 2014 marks the beginning of a period where this untapped market opportunity unfolds as a strong business contender for all parties involved. Towards this end, let us also hope that energy service providers, utilities and their regulators take them as serious demand response candidates, formulates the appropriate demand response programs, utility driven energy management programs, and most importantly OEMs and vendors work closely with the decision makers in this category to bring out good demonstration cases that will help prove the value currently latent in this segment.