Smart Buildings

Beyond the Hype: Assessing What We Know About the PassiveLogic Ecosystem, So Far

Many startups set out hoping to change the game, to put a "dent in the universe" but the reality is that few get close. The odds of "success" if you are funded by a top VC are something like 0.05%. Even "success" doesn't mean you change the game. Salt Lake City-based startup PassiveLogic is being touted as a potential game changer in building automation and are backed by some tech heavyweights like NVIDIA. In this research note, we explore their new ecosystem, and consider its potential impact on the real estate sector, based on an email interview with their CEO and November product launch. Last month PassiveLogic announced the launch of an ecosystem of hardware and software tools, which it claims will “democratize the future of AI and enable generative autonomy for the public”. The launch video was straight out of the Apple marketing playbook, with a broad all-encompassing vision, pushing the right buttons regarding […]

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Many startups set out hoping to change the game, to put a "dent in the universe" but the reality is that few get close. The odds of "success" if you are funded by a top VC are something like 0.05%. Even "success" doesn't mean you change the game.

Salt Lake City-based startup PassiveLogic is being touted as a potential game changer in building automation and are backed by some tech heavyweights like NVIDIA.

In this research note, we explore their new ecosystem, and consider its potential impact on the real estate sector, based on an email interview with their CEO and November product launch.

Last month PassiveLogic announced the launch of an ecosystem of hardware and software tools, which it claims will “democratize the future of AI and enable generative autonomy for the public”.

The launch video was straight out of the Apple marketing playbook, with a broad all-encompassing vision, pushing the right buttons regarding the huge impact of buildings on the environment.

“Today, buildings and industrial systems are the world’s largest decarbonization opportunity; they consume more than 68% of the world’s energy, and account for the largest proportion of wasted energy due to inefficient control,” said PassiveLogic’s CEO and Founder Troy Harvey. “Buildings also stand as the world’s largest robotics challenge, with the biggest ones trending toward one million sensors and controllables. PassiveLogic has built the technology to make buildings autonomous, enabling buildings to be 30% more energy efficient through system controls optimization alone.”

The PassiveLogic Quantum Standard

The overall standout feature of the PassiveLogic solution is the promise that almost any building will be able to design and implement their own autonomous system, allowing the company to serve a large and diverse real estate market.

Underpinning their ecosystem is the Quantum Standard, which they describe as “the first physics-based digital twin ontology that emulates and predicts a building’s operational needs with real-time control at the edge.” We discussed this with Troy in a podcast from April 2022.

Ontologies are nothing new to the smart building industry. Semantic data models and metadata standards like Project Haystack, Brick Schema and RealEstateCore, have all been designed to help solve the problems of interoperability.

According to Troy, Quantum makes a distinction between semantic standards, like RDF-based approaches, and a true ontological language. He suggested that the terms around ontologies and semantics have been misused in the past leaving a confusing landscape for building stakeholders.

“Outside of a few national labs and perhaps at most 1,000 people in the world, nobody understands the obscurities of RDF/OWL and what to do with it, it’s a bit of an orphan technology. It's not an API, or an object model. It's lost on the millions of programmers out there,” Harvey told Memoori in an interview.

“Not being RDF-based, we don’t share any DNA with Brick or REC. Our original intent was to build Quantum this way, but we quickly realized it wasn’t feasible. You couldn’t just slap physics on top of Brick.”

Whilst I agree with the premise that RDF/OWL are obscure and confusing to many programmers, this did raise questions in my mind about how Quantum would align with these existing ontologies if they don't share any DNA. Troy addressed this question by saying that PassiveLogic had been building a semantic translation engine that supports "semantic lowering” which includes multiple semantics like BACnet, MP-bus, BLE mesh, Haystack etc.

“We provide the ‘iPhone for buildings’ experience. With an API to build next-generation applications and an App Store to get them in front of customers. Like Apple Xcode we provide a developer IDE called Quantum Explorer, to make it easy to build code, visualize it, debug it, and test it,” Troy told us. “Unlike Apple, we aren’t just removing customer purchase friction, we are dropping $50k-250k integration barriers to every building that a Proptech company wants to sell to. That’s huge. Also unlike Apple, we are making the API open source.” The API is built on GraphQL.

To what extent you can make an API open source is, in my opinion, not clear. Like all engineering, software development requires making choices which ultimately limit functionality. You cannot be all things to all people. An API allows you to provide a layer of abstraction on top of complexity like semantic ontologies. This makes programming easier. But do they help solve smart building interoperability issues? In my opinion, not really.

In itself, Open Source just means decentralized software development, but because of its transparent nature, it instils a certain amount of confidence. Anyone can see the code and contribute to its development, therefore lending itself nicely to ontologies because they need industry-wide adoption to help solve interoperability issues.

APIs make sense from an Ecosystem perspective. They make it easy for developers to build their own applications on your platform and abstract out complexity which gives it broader market appeal. And let's be honest, tight integration of hardware and software in one ecosystem makes it easier to deliver a seamless experience. Think Apple again. Whether you want to call that Vendor lock-in or not, depends on your perspective. Ultimately the customer decides based on what their requirements are.

The PassiveLogic Broad Ecosystem

PassiveLogic’s Hive BMS is at the core of the ecosystem, providing distributed full-stack control built on Quantum digital twins to enable real-time autonomous control at the building’s edge. Hive also provides some openness to PassiveLogic’s ecosystem by supporting a range of standard protocols, while supporting the company’s own Quantum interfaces on the other side (see early comment on "semantic lowering").

“We think about where is the right place for deep innovation, and where is the place for compatibility. We think the Autonomous Platform or “brain for buildings” is the place for deep innovation, but all of the connectivity is the place for compatibility,” Harvey said. “We have an advantage over Autodesk or Trimble. They must make money from the software, we can make it downstream from the autonomous system and services. This allows us to make our software available for free and, honestly, free usually beats open in the market.”

That is potentially very disruptive. Yes free can beat open in the market. It's another benefit of the end-to-end tightly integrated ecosystem approach. You could see this being attractive to various types of customers willing to buy into the end-to-end solution approach based on cost.

PassiveLogic Hive

The November launch announcement revealed a portfolio of six applications that work together to make up the PassiveLogic ecosystem. While each application serves a different phase of the process, bigger customers are likely to need all of the products:

● Autonomy Studio: a generative enabler to speed up integration workflows.
● Building Studio: a generative modelling tool to speed up design and engineering.
● Quantum Lens: a design app to speed up the design, installation, and commissioning process.
● Quantum Creator: a tool to make digital twins scalable for equipment manufacturers.
● Quantum Explorer: an integrated development environment for digital twin data.
● Quantum Passport: a customization tool to make buildings adaptive for occupants.

Despite the hype that has accompanied PassiveLogic’s activities since its foundation, few could question the company’s ambition. Troy and his team are essentially attempting to re-think building automation from the ground up to create what is the "holy grail" of smart buildings, truly integrated and fully autonomous facilities.

This ecosystem breadth places PassiveLogic in direct competition with most of the industry’s incumbents. Few smart building startups offer more than point solutions to enhance established technologies. As Troy suggests though, “integrating point solutions to bandaid the BMS is only shrinking the market, not growing it”.

PassiveLogic Auto Commissioning

PassiveLogic Potential Impact

PassiveLogic completed three funding rounds in 2022 giving them pretty deep pockets. They completed a $34 million Series B in January, which was followed by strategic investments by Brookfield Growth in April and Nvidia’s venture arm in September. These followed a Series A in October 2020 that included investors; Keyframe Capital, Addition, RET Ventures, A/O Proptech, and NREP. Total investments in Passive Logic now amount to more than $85 million.

Given the sheer breadth of their offerings, building out an effective go-to-market strategy that cuts across design, construction and operation of commercial real estate will not be cheap. I would expect them to raise a new funding round fairly soon.

In September 2023, ahead of the launch of its ecosystem, the company announced that it had pre-sold its Hive Autonomous Platform as part of an early-access program for its first three years of distribution. They have given distribution rights to 11 distributors across North America.

The hype surrounding PassiveLogic is hard to ignore in a market that has been crying out for decades, for a user-friendly solution that addresses all buildings and drives new market adoption.

If the company and its ecosystem can live up to some of the hype it could create significant disruption for incumbent hardware and software vendors across the supply chain. The results of initial implementations in 2024 should give us more insight into the company's development and its potential to be a change agent.

Keep up with the latest updates around PassiveLogic and the building automation industry as a whole with an annual subscription to Memoori in 2024. Subscribers get exclusive access to our wide range of news and analysis on everything smart buildings.

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