Most operational systems in buildings, from lighting to HVAC, last at least 10-15 years, and perhaps more. While there are ongoing maintenance costs to operate these systems, those ongoing expenses are small compared to the costs to replace core systems.
Smart building technology can extend equipment life and improve performance, but vendors often run into a different challenge: common budget cycles are not aligned with acquiring cloud based technology. The trade-off of increasing annual operating costs (for ongoing software licenses) to reduce longer-term capital costs (of purchasing new equipment) may not be viewed favourably.
Some vendors struggle to convince building owners and operators to invest in their technology due to these increases in operating costs, Vendors may be more successful if they pitch the future-proofing benefits: specifically, that the technology can prevent or mitigate vendor lock in.
Memoori has covered the ”lock in” issue in the past, highlighting the opportunities created by 3-D printing and building information modeling (BIM). But the opportunity is larger than that.
As background, building systems historically have been closed operating environments, and even today, proprietary controls are still used in new construction. Most building owners and operators would prefer to have more flexibility and access to their data, but it’s typically not such a high priority item compared to other needs. Hence, proprietary systems still are deployed.
Another consideration is that adding a new, less known system, even modern and cloud-enabled, may be viewed as a risky proposition. It’s another solution for staff to learn, a new budget line item that will face greater scrutiny, and it may add to the significant backlog of work that many building operators have. These near term pain points often outweigh the longer term benefits.
But, with costs of sensors and big data processing coming down significantly and technology-rich buildings demanded by tenants, one way or another, advanced software likely will become more embedded in buildings. And, a smart building platform may reduce the likelihood that a building gets locked in by making data more available and connecting legacy systems together (which avoids replacement, which requires significant capital).
The opportunity for technology is becoming an increasingly common refrain in the industry. Volker Buscher, global digital services leader at Arup, noted that technology is a key piece of the future, open building.
“Instead of choosing fixed and inflexible systems inside, which don’t speak to each other, [buildings] need to move towards having a single open-source technology platform into which all the services plug,” he adds. “This will enable the building to speak to its operators and tenants, and new technologies or applications to be plugged in, making the building incredibly responsive to the changing demands of occupants.”
Moreover, while a software subscription may appear to be an added cost, it likely will save money in the long run. According to The Economist, 80% of businesses see demand from their customers to change from an ownership model to one of access. This reduces lock-in and overall costs of ownership, and gives customers more flexibility to access capabilities that they need, when they need them.
Additionally, the increase in data being collected in buildings will require new systems to collect and analyze it. Traditional building automation systems (BAS) will not be sufficient for these new data streams. Building owners and operators seeking to avoid vendor lock in may find that avoiding the purchase of smart building technology actually creates “data lock in.” An inability to collect and benefit from a more data-driven building.
Future proofing as a concept will likely grow in importance in the coming years, as occupants demand new investments in technology, and owners and operators seek to ensure that their systems and solutions will be adaptable to these expectations. Moreover, future proofing could be considered at multiple levels of the building.
Physical sensors being deployed within a building may seem to be hard to update, but smart lighting vendor Enlighted recently launched a new sensor that can be swapped in an existing fixture containing their older hardware. The wiring systems can also be an opportunity to future proof: Water Park Place in Toronto employs fiber cabling for all of its critical systems, including lighting and the HVAC terminal units. While this cabling likely won’t be replaced anytime soon, the universality of IP networking means that any new equipment should be easy to connect.
The hardware systems are the hardest and costliest to replace, though many building owners that worry about future proofing their buildings also think about the software offerings. Of course, it’s much easier to update software than it is to swap out hardware, though there remains concern – especially with many startups in the smart building space, that smaller vendors may not be in a position to deliver a compelling product over the long-term. Given the vendor churn, this is a fair concern.
Moreover, training and adoption of on-site staff also should be part of future proofing. Specifically, are the on-site staff in a position to continue to learn new capabilities, of ever changing and advancing building technologies? This could be a challenge nearly as great as procuring and funding new, future proof technology.