PR: Every day of my life (laughs).

KG: The Internet of Things has become a buzzword. How do you explain it to people who are less than familiar with the term?

PR: At the end of the day, there are five key principles for this: edge-to-cloud, mobility, analytics, security, and collective relevance.

These are basically services that are delivered across the enterprises and the network edge from the cloud and back again. You are taking information and data out of something, bringing it up to the cloud to filter and analyze it, and then sending it back to be delivered in a value-driven way. It needs to be actionable and associated to a benefit.

It’s kind of like the beginning of the Internet. Everyone was excited about the Internet and everything it would do, but success with the Internet still relied on business experience and knowing what to do with the information. At the end of the day, IoT is an enabler. It’s not the silver bullet that just does everything for you while everyone makes money. It’s all about mobility. No matter where you are in the world, you can connect to the solution. At the end of the day, you can do
anything, anywhere.

KG: Obviously analytics and what they call ‘big data’ is important to everyone.

PR: Absolutely. We live in a hugely sensor-rich environment. I live in Minnesota, and we like our remote car starters in the winter. I can start my truck with my iPhone from any place in the world. A lot of people would say this is a form of the Internet of Things. They are wrong; this is an example of being connected. The IoT would represent a car with a temperature gauge telling the vehicle it is minus 20?F, which triggers the seat heater to turn on. That is the value of the IoT, which is driven by the analytics.

And, of course, you need to connect securely in a trustworthy fashion. We don’t want to become another Target or Home Depot breach story. We are less of a target than most consumers because hackers are typically after credit card numbers.

KG: Do you see this as more of a problem on the commercial or residential end?

PR: I think it is both. The consumer side is probably more publicized because it is the home. There are benefits to monitoring the house and energy savings. I think the acceptance has been a mixed bag. Some consumers have a fear about all these things being connected and letting people into their homes. But they have already let people into their houses. The cable industry is in their homes, and their Internet providers are there, as well.

KG: Is it easier on the commercial side to have people “let you into their building?”

PR: I think so. I think commercial folks will be more apt to accept it after we show and demonstrate what the bottom-line impact will be and how it will lighten their workloads. Everyone is looking for things that increase productivity and offer operational benefits. But that comes with a bit of a tag to it. We need to make it really secure.

KG: How involved should the HVAC contractor be? Heating and air are obviously a big part of it, but so is lighting and security, which a lot of HVAC folks don’t do. I hear from contractors that they are concerned someone else (non-HVAC businesses) will come in and eventually own the building and the HVAC. What is your advice?

PR: HVAC contractors need to have the ability to open up and function in a more open ecosystem. If you don’t know how to play or work in this environment, quite frankly, they’re right; someone else is likely ready to come in and own it. This does not mean everyone needs to become the Wal-Mart of HVAC. But, I think they need to understand how to stay true to their core yet also interact with the other groups. They’ve got to be able to work within the ecosystem from an interface standpoint. The key to that is having an open system and being focused on who the users are. The big part of the opportunity is that 94 percent of the buildings in the U.S. are 50,000 square feet or smaller. That’s a rich opportunity. You have to pick the right partners and players, but to simply close up and say, “I am going to just stay focused on this and not worry about anything else,”
is a mistake.

KG: Security wise, how do you put the customers’ minds at ease?

PR: That’s a great question. That is why we’re very carefully picking the right partners. As an example, security for us is Intel Security, which used to be McAfee. It’s not a simple anti-virus security. It is firewalls, penetration testing, etc. The key is to tell people we are not doing it, we are letting the experts do it. We realize where our expertise stops and theirs starts. You are going to have a lot easier acceptance level with customers this way. We would not do real well if we just said Daikin’s new software security will protect you. It would probably be an issue, which is why we’re leaving it up to
the experts.

KG: Good point. How do you get the contractors on board?

PR: It varies. We are an older industry, but the consumer side of things with iPhones, tablets, etc., which has helped us. Most contractors have smartphones and that has modified the industry. At the end of the day, contractors need to see the benefits. If you go out and buy a TV today, how many people want to buy a dumb TV? The reality is, they want the benefits of a smart TV. You’re not going to build a building that doesn’t have the capabilities to expand and have these things in it. Contractors need to realize you can’t say, “We’ll figure it out in five or 10 years.” You need to build the platform in that facility today. To say you are not going to have the ability to have IoT and software integrated into the building is a huge mistake. They are going to start to see the advantages. We don’t think of doing anything without technology.

KG: It has to be a fun part of the industry to work in.

PR: It’s absolutely fantastic. Coming in and working with customers on a daily basis is a lot of fun. Sitting with a customer and showing them what we can do and watching their reactions is great. We’re trying to tell people, IoT is a great buzzword, offers a great impact, is a big enablement step forward, and we feel it’s fantastic; however, you can’t just be a techie person and expect this to succeed. You need to have the business knowledge to understand what you want to do with it. It can do pretty much anything you want it to do, but, the question is, what do you want it to do?

Publication date: 6/29/2015

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