Contractors Prepare to Cash in on IoT Buzz
Selling features will include better efficiency, comfort, safety
There is a lot of buzz these days about the Internet of Things (IoT) and how it will continue to influence — some say take over — our lives in the near future. But what does the IoT mean for HVAC contractors, and, more importantly, how can they profit from its proliferation?
The latter question is an easy one to answer, said Tim Vogel, marketing manager, KMC Controls, because as more types of systems are integrated with the IoT, entirely new lines of business will become available. “Contractors will be able to provide energy management services, continuous monitoring and balancing, preventive maintenance services, and more precise annual proposals for service agreements. It will allow them to paint a more complete picture as to what needs to happen to make a home or building safe, efficient, and comfortable.”
While the IoT may offer tremendous opportunities for contractors, it is first necessary to understand what the term means.
As Rod McLane, senior director of product marketing, Ayla Networks, explained: “On a very high level, the IoT is the ability for things that contain embedded technologies to sense, communicate, interact, and collaborate with other things, thus creating a network of physical objects. Basically, the IoT enables a shift to more open communication and connection between a greater number of devices within a home or building. This is beneficial for consumers, as it gives them the ability to remotely control and manage devices as well as improve energy efficiency through connectivity to demand-management applications.”
Basically, the IoT offers a revolutionary change in the way devices are connected to the internet as well as how users access them and use the data they provide, said Robert Hemmerdinger, director of business development of SmartStruxure, Schneider Electric. “Today, technology in many different markets uses other communication methods to share data within a subsystem that is often then made available to the internet via a single connection point. With the IoT, those devices will sit directly on the internet, communicating natively to other systems using the internet as the communication infrastructure. Over the next five to 10 years, the amount of devices within the HVAC industry that support the IoT will increase dramatically. The number of devices that are connected will depend on if the user sees value in making that connection.”
To that end, there may seem to be no practical reason to connect a furnace to an oven, said Vogel, but perhaps a homeowner wants to monitor his or her natural gas usage and metering for individual appliances, and with the IoT, both appliances can report back to the same platform. “Similarly, you may have forced-air heating, radiant in-floor heating, lighting or window shades, and a coffee pot working together so that when you wake up in the morning, your furnace heats your home to a preset temperature, your bathroom floors warm up, selected lighting comes on (or blinds open), and your coffee maker begins brewing a fresh pot of coffee for you. The IoT isn’t about connecting everything to everything else just for the sake of making connections; it’s about improving efficiency, safety, comfort, and convenience in the spaces in which we live and work.”
On the commercial side, the IoT is also having a sizable impact, as buildings are no longer seen as simple steel, bricks, and mortar, but as forests of information, said Sudhi Sinha, vice president, product development, building efficiency, Johnson Controls Inc. “Temperature controls, security systems, energy storage, demand-response intelligence — these are all streams of ever-changing data points. The technology makes it possible to direct a facility’s usage as needed — to remove wasted energy and eliminate unnecessary costs and to bend the will of a building so that it meets today’s needs.”
But with that improved technology comes many challenges for building owners and facility managers who are expected to use those data to satisfy numerous stakeholders.
“Occupants want comfort and safety, and if something goes wrong, they want the issues to be resolved very quickly. They also do not want to be impacted by any building improvement projects. The service team has to address all the complaints from occupants, ensure all the equipment and systems in the building are working fine, find capable people to maintain the systems, and do all those tasks with limited budgets,” said Sinha.
OPPORTUNITIES AND RISKS
It is in this changing world that savvy contractors will thrive, as they will understand that connected devices and systems within a building or home through the IoT are game changers for the HVAC industry, said McLane. “One of the key benefits the IoT provides is the ability for contractors to build ongoing relationships with customers as they become more involved in the setup and maintenance of connected homes and buildings. This begins to shift the revenue model from one-time engagements with clients to one in which they can provide subscription-based, value-added services during the entire life cycle of the product.”
In addition, contractors who provide post-installation support will have the device usage and performance data, so they can change from being reactive to being proactive — essentially identifying potential problems before they become critical, noted McLane.
“As a result, it is likely that HVAC contractors will start to play bigger roles in providing services to their customers,” he said.
The bottom line is that by deploying IoT-based systems, contractors can provide more value to their customers, noted Hemmerdinger. “For example, they can design a system that sends data to the cloud that can be analyzed and used in energy-reduction programs. This is a very compelling return on investment. In addition, an IoT system can also increase installation efficiencies, which allows installers to do more work remotely and engineers to analyze and configure systems from afar.”
On the residential side, there are several IoT systems already available, including Apple’s HomeKit, Google’s Nest, and Samsung’s SmartThings. However, that market is still highly fractured, which means it’s difficult to mix and match components, said Vogel. “Most residential systems are still in the proprietary stage, and at the moment, connected home systems still haven’t gone truly mainstream.
The commercial market is more advanced, as it has utilized various IoT technologies for the last few decades, including occupancy sensing, remote scheduling, CO2 monitoring, temperature trending, and remote/automated control, said Vogel. “The two biggest areas within the commercial segment that will be affected by new IoT technologies will come from integrating all types of mechanical and information systems into a common platform and providing a level of data analysis and reporting that allows for smarter and better decisions to be made.”
While the IoT brings with it many benefits, it also creates significant exposure to security and privacy vulnerabilities, said Sinha. “The IoT amplifies the access points for data and control, which, in turn, amplifies the intrusion points. This is a complicated subject, because there are emotive, ethical, legislative, and commercial considerations in addition to the technical complexities.”
However, ignorance is not a shield where cybersecurity is concerned, said Hemmerdinger. “Contractors need to be selecting manufacturers that are committed to providing safe, secure, information technology (IT)-focused technology, and they also need to take on and own the security requirements to make sure any IoT solution they offer is safe.”
Publication date: 8/8/2016