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This article was written by Daphne Tomlinson of Tomlinson Business Research.
The announcement by UTC on 20 March 2017 of a $300 million investment in a Digital Accelerator based in Brooklyn, New York is another example of the trend by building technology suppliers to step up their digital innovation efforts. The accelerator will serve as a hub for attracting digital talent and unlocking the power of software and analytics to further broaden UTC’s leading portfolio of products and services for commercial buildings.
UTC will recruit 250 new professionals specializing in product management, software development and data analytics “to create new sources of value with our products and services, drive productivity, and help improve customer operations”.
The need to increase speed and agility in developing smart connected products and services by leveraging software, analytics and the Internet of Things (IoT) has been recognized as a key factor in maintaining competitive advantage and accelerating digital transformation.
Many of the established suppliers (eg. Tyco, Schneider Electric and Siemens) have sponsored or established incubator and accelerator programs for startup companies, in order to scout and select disruptive ideas and increase momentum in innovation, as our recent report on Startups and their Impact on Smart Buildings highlighted.
In combination with investments in startup companies, building technology suppliers are also exposing their own R&D and product development staff to a different perspective on innovation, in order to stimulate the ideas and expertise of employees. Various initiatives have been adopted by the leading players intended to replicate business environments which mimic the incubator and accelerator startup approach for faster and more agile development programs.
Danfoss announced an incubation hub in Berlin in October 2016 to boost the development and testing of new digital products and viable IoT business models in Connected Products & Services.
Danfoss is moving its innovation activities from their usual internal framework into a start-up environment consisting of international entrepreneurs and with access to a global network of digital and industry expertise. The new competence center has been set up in cooperation with two external partners: Rainmaking Loft Berlin and Deutsche Ventures.
The Digital Business Acceleration Hub introduces a new approach to rapid business development, which will be limited to 12 to 16 weeks. One project from the Danfoss Heating team examines how to use cloud-based online solutions to make management of building installations user friendly for all stakeholders and improve loyalty amongst building management companies.
In January 2017, next47, the new venture unit from Siemens, announced a corporate partnership with Techstars, the global accelerator which helps startups develop their businesses and deploy solutions as quickly as possible. Through the partnership, next47 will nominate and embed Siemens teams in Techstars’ upcoming startup programs including the Internet of Things in New York City. Successful teams will spend three months working with Techstars’ mentors to refine their strategies, explore partnerships and pilots, attract customers, grow revenues and get ready to raise funding at the end of the program.
Honeywell Home and Building Technologies (HBT) is also establishing its innovation activities in a new environment. In December 2016, Honeywell announced that it would move to Midtown Atlanta to house its state-of-the-art software center and the global headquarters of HBT. Honeywell plans to invest $19 million in the site and staff it with more than 730 full-time product software engineers and approximately 100 HBT HQ employees over the next five years. Most of the employees will specialize in developing software products that support Honeywell’s solutions addressing the emergence of the Internet of Things (IoT), including mobile, cloud computing and data analytics, as well as marketing and user experience.
The Midtown Atlanta building will have an agile work environment to encourage collaboration among employees. Proximity to a network of universities and colleges anchored by Georgia Tech and Atlanta Tech Village, a technology startup center with whom Honeywell has partnered, aims to serve as a catalyst that connects them deeper into the Atlanta tech community.
These initiatives highlight the recent changes to long-established innovation approaches by building technology players. They reinforce the trend of major corporations to rapidly reinvent themselves, faced with the imminent disruption caused by the Internet of Things, part of the Fourth Industrial Revolution, which will invoke the most powerful market transition in the Smart Building Space over the next 10 years.