July 03, 2014

| By Chip Pieper, VP Sales and Marketing

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Building Efficiency and Enterprise IT at IBCon 2014

It was exciting and informative to see Microsoft, Cisco, Google, and Intel on the same stage discussing the transformation taking place in this industry.

Although our industry has been discussing the inevitable convergence between the enterprise IT and building efficiency industries for the past 5+ years, it was pretty apparent at this year’s Realcomm's IBCon that this convergence will appear to be more of a collision than anything. It was exciting and informative to see Microsoft, Cisco, Google, and Intel on the same stage discussing the transformation taking place in the building automation systems industry. However, we should take into consideration that these players typically do not invest in developing solutions for a specific industry sector unless it’s sized as a billion plus opportunity for their business. What does this mean? 

Having spent a number of years with Microsoft I saw a repeatable pattern; if they want in, they‘ll get in. This may not be directly, as in the case of Microsoft. Their approach generally consists of influencing (or owning) the development environment and capturing software licensing revenue. Each of the larger players mentioned above (including IBM) however, have different sub-sector targets that they are focusing their resources on in developing and/or displacing incumbent solutions.

  • Intel has just introduced their Gateway Solutions for the IoT (first of many or the next Mediator?)
  • Cisco’s Smart+Connected City platform (did they learn something from the RZ acquisition?)
  • Microsoft’s Azure platform (successful industry deployments include: ICONICS, Ezenics, Switch Automation, and KGS Buildings)
  • Google’s recent acquisition of Nest (what’s the next target?)
  • IBM’s Predictive Maintenance application suite & Global Services (Maximo, Tririga, Cognos, SPSS, etc.)

One key observation to consider here is that there’s a VAST difference between the business practices of enterprise hardware and software companies to those players that participate in the building efficiency industry. The pace of solution adoption in the building automation systems industry is much slower, less urgent to the business, conducted at a different level of decision making, and clearly made up of organizations that are not forced to innovate at the same speed as enterprise IT. Matter of fact,  I’d love to see an enterprise IT deployment that has had to integrate/interoperate with such old, antiquated closed technology as typically the case in the building automation systems industry. 

There are exceptions of course. Namely, ripping and replacing equipment and software because the building efficiency industry continues to provide system solutions that are less than completely open. Enterprise IT however, moved past that game of securing installations/market-share 15 years ago.  The ability to extend the investment in systems through interoperability, without ripping and replacing, increased the value proposition of IT solution investments. 

As our good friend Steven Covey always said, there’s a difference between those that perceive the world from an abundance mentality, verses those that see it through scarcity. Win/Lose eventually turns to Lose/Lose.

Apart from the unique opportunity to see the major enterprise IT players take the stage at Realcomm's IBCon, there are some additional business practices we should note. Most go-to-market through well-established channel partners that are committed to aligning the necessary resources (time, people, money) to achieve mutual success. This is particularly the case in the automated buildings industry as many of these IT players have little to no domain expertise in building management systems and building efficiency. They usually co-invest in these partners that understand enterprise IT channel dynamics (it’s different than our traditional industry channel models). They educate the targeted market, highlighting the business opportunity. Most importantly, their presence forces the established industry to innovate. 

If our new colleagues have the tolerance to withstand the pace of the intelligent building industry’s business, we should ready ourselves for a ride like no other. More money, talent, technology, and thinking will be flowing into this market than ever. We truly could be witnessing a transformational industry change.