This article was written by Daphne Tomlinson, Independent Senior Research Associate at Memoori.

Commercial HVAC equipment manufacturers in the North American market are competing head-on with building controls vendors by offering factory installed embedded controllers in their HVAC equipment. These solutions offer customers an alternative to the traditional building management approach supported by external controls contractors and building automation systems (BAS).

Advanced sensors, IoT, machine learning and data analytics have enabled chillers, VRF and rooftop units to be controlled more efficiently than previously possible. Connectivity also allows HVAC equipment to be accessed and controlled remotely, via the cloud.

The digital commercial buildings space is a crowded market with a range of smart connected equipment and service providers including the major HVAC equipment players, building controls firms, IT companies, not to mention specialist vendors and startup companies.

The leading commercial HVAC equipment suppliers (Carrier, Daikin, Trane, Johnson Controls/York) have been expanding their portfolios beyond equipment to encompass controls, solutions and service for many years and have launched connected cloud-based products and services in North America which essentially bring intelligence to individual units in the field.

OEM solutions are positioned as quick to deploy, with simpler plug and play controls and more affordable, due to the elimination of labour and time for integration of building controls on site. The potential of integrated energy management, remote diagnostics and preventative maintenance services further adds to their attractiveness in reducing the total cost of ownership. With greater connectivity and system insight, building owners and facility managers can be more proactive about increasing the performance, efficiency and uptime of their systems.

Daikin was an early adopter of the IoT approach with Intelligent Equipment (IE) launched in January 2015, integrating Daikin's rooftop systems with Intel's gateway solutions. Daikin Applied solutions now provide direct access to more than 150 data points on a Daikin rooftop unit, or over 300 points on an air-cooled chiller, all in real time.

Partnerships and investments in startups are being established by HVAC equipment players, in line with the increased collaboration trend to leverage innovation in the overall smart buildings sector, as highlighted in our recent Startups Report.

For example, 75F partnered with Daikin at AHR Expo 2018 to debut Intelligent Solutions Powered by 75F. The startup company has developed an innovative approach, Dynamic Airflow Balancing, leveraging IoT and the power of cloud computing, designed for light commercial and industrial buildings with forced air Constant Volume rooftop package units.

Daikin is also a strategic partner of Riptide who have provided the IoT back engine for their cloud-based Intelligent Rooftop equipment. In November 2015, Daikin acquired a minority stake in the company.

Small to medium-sized facilities, often buildings without a building automation system are being targeted by these vendors. There are approximately 5 million small to medium-sized commercial buildings across the United States, which lack a traditional BAS, mainly buildings under 50,000 square feet, such as restaurant, office and retail facilities.

But these solutions are not only confined to the small and medium sized buildings sector. Cloud-based HVAC equipment controls, with remote connectivity can also contribute to optimize the efficiency and performance in larger facilities, generally those over 100,000 square feet, with building automation systems.

Vertically integrated building controls suppliers such as Johnson Controls with HVAC equipment in their portfolio, are at an advantage, able to capitalize on pre-engineered controls at the factory. Johnson Controls has approximately 6,000 connected chillers that make use of the cloud. Their system connects YORK or other make chillers using the Metasys platform and streams data from the chiller to the cloud, establishing a 24/7 line of sight into the real-time operation of the connected chiller.

Other vendors, such as Siemens, are offering digital solutions to OEM suppliers. They are launching Climatix controllers for Digital Chillers and AHUs at Mostra in March 2018. With Climatix C600, Siemens OEM customers also get access to the cloud-based Climatix IC Remote Servicing System for diagnostics, optimization and maintenance.

Honeywell announced in January that its Outcome Based Service, a cloud-enabled building management service now extends to mechanical systems. The service uses advanced algorithms that monitor and analyze HVAC controllers, mechanical equipment and their key components, from boilers and chillers to other hardware that make up the core equipment of a building, in near real time, helping uncover many faults and anomalies faster than traditional, routine maintenance.

Another major building controls firm, Schneider Electric have opted for a strategic partnership with a major supplier of variable refrigerant flow (VRF)-based HVAC systems. They announced an alliance with Panasonic in October 2016 to integrate their building management system and room controllers with Panasonic HVAC equipment via the ZigBee wireless communication standard. This integration allows building owners and managers to view these building systems, including HVAC equipment, lighting, security, power and electrical distribution via a single interface, and deliver information that helps to reduce energy consumption and increase savings.

The North American market for commercial building management equipment and systems is opening up, as small and medium sized facilities are now presented with a range of more affordable solutions, regardless of building size.

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