The Internet of Things (IoT) has established itself as the next big thing. According to IDC, IoT spending will reach $1.7 trillion in 2020, and undoubtedly, the HVAC industry is in a prime position to cash in on this hearty market.
The IoT means different things to different people, though its most basic definition recognizes it as a network of smart interconnected devices. Many of the devices within the IoT are HVAC-related as connected technology aims to harness the energy consumed by residential and commercial indoor comfort systems.
While most studies insist IoT technologies are on the cusp of becoming mainstream, the question remains: Is the HVAC industry truly ready to embrace the IoT, or is there a sense of trepidation and concern regarding the technology’s staying power and long-term viability?
WHERE IT STANDS
Before grasping the IoT’s HVAC future, it’s important to understand where the industry stands today. Manufacturers big and small are currently producing or developing a variety of connected devices and ensuring customers who want to get involved with the IoT have plenty of options.
“If you say IoT, most customers won’t know what you’re talking about, but if you talk to them about a connected thermostat or a smart thermostat, they understand that and want one in their homes,” said Devoe Ward, business development manager, Nexia, Ingersoll Rand. “Most people have gotten very comfortable controlling different aspects of their lives with their smartphones, and they are increasingly interested in making their homes just as connected. And interest only increases when we start discussing the ability to reduce energy usage by managing their settings from anywhere and utilize remote diagnostic capabilities. The idea that they can conserve energy and potentially save money on repair costs really resonates with people.”
Sudhi Sinha, vice president, product development, building efficiency, Johnson Controls Inc., said as mobile devices become the norm rather than the exception, they’ll more frequently connect customers to their homes, families, friends, work, and other electronic devices, allowing them to do things like remotely turn on the lights in their homes or track their steps and sleep patterns, it is not surprising that they expect connectivity with their HVAC products.
“Connectivity offers homeowners and building managers the ability to better control their environments, improve the efficiency of their HVAC systems, and reduce operating costs while conserving energy in the process,” said Sinha. “This is clearly a fast-growing industry need.”
It’s also important to note that HVAC products do not exist in a vacuum. Bill Alderson, corporate director, marketing and digital services, Rheem Mfg. Co., pointed out that as primary players like Apple, Google, and Amazon continue to position their frameworks and products to take advantage of integration opportunities, consumer demand will grow with increased realities of whole-home comfort and energy-efficient solutions.
HOW ARE CONTRACTORS RESPONDING?
As the IoT attempts to move past the “now trending” moniker and into the game-changing role it appears ready to occupy for the foreseeable future, contractors must be willing to evolve and be prepared to utilize an entirely new product landscape.
“We’re finding that acceptance from consumers and building owners is driving conversations with contractors,” said Kevin Miskewicz, director of commercial marketing, Mitsubishi Electric US Cooling and Heating Division. “As contractors get more questions from consumers and building owners, they need to be knowledgeable enough to answer and provide solutions. Nowadays, they are walking into a home or building and finding a client who has already done the research. Our goal is to educate and provide the contractors with all the necessary information. It’s really focusing more on them from a marketing and advertising perspective — providing them with information on how ductless technology, VRF systems, or the IoT impacts them. They are certainly at a point where they know they have to stay on top of the trends, and that’s a recent industry phenomenon.”
According to Sinha, the IoT space is quickly expanding, which, in some cases, is forcing contractors to more effectively and efficiently address many of the day-to-day challenges in the built environment. As a result, they are better equipped to ensure occupants are safe and comfortable and equipment and systems are in good working order at an optimized operating cost structure.
“As connectivity to HVAC systems continues to grow, so will customer expectations,” said Sinha. “Contractors are accepting the IoT and the benefits it offers with increasing frequency,” said Sinha.
Ward said contractors appreciate having the option of offering something customers see as high-tech and environmentally aware.
“Smart thermostats are one of the most popular residential IoT categories, but they can also be daunting to homeowners who may not be comfortable installing one on their own,” said Ward. “For contractors, the installation and activation is very familiar, so they can provide a service customers want without having to adjust their entire workflow or invest heavily in new training. Another big opportunity is with homebuilders. Some of the nation’s largest homebuilders include our thermostats and the Nexia bridge as standard features to differentiate their offering from the resale market.”
“Rheem EcoNet-enabled products benefit contractors with enhanced equipment detection for easier installation as well as equipment alerts, which provide assistance for homeowner-to-contractor communication, should the need for service calls arise,” said Alderson. “In addition, EcoNet allows installers to load their contact information into the EcoNet system, which, in turn, can be automatically displayed in the EcoNet app when equipment alerts occur. This helps immensely with customer-contractor relationships and sales.”
Shane Mason, vice president of software engineering, Greensleeves LLC, Findlay, Ohio, sees contractor acceptance of the IoT as being dependent on the industry segment.
“I think residential customers would still consider it trendy and appreciate the smartphone integrations, but, on large commercial projects, we’ve had no success selling any IoT-connected piece of HVAC equipment, and it always seems to stem from IT [information technology] security. Think Target, U.S. Government Accountability Office [GAO], Anthem Insurance, etc.”
The security concerns Mason mentioned have certainly been a topic of conversation and awareness for manufacturers.
Sinha said an increase in the number of devices and data brings with them significant exposure to security and privacy vulnerabilities.
“IoT amplifies the access points for data and control, which amplifies the intrusion points,” he said. “The result is a complicated situation that requires emotive, ethical, legislative, and commercial considerations. To help address some of these issues, companies like Johnson Controls have created secure development policies and practices, which we encourage contractors to review and become familiar with. Our website includes materials for contractors to access and use to educate themselves. In addition, we reassure them with products like Metasys 8.0, which includes the industry’s most secure engine for end-to-end protection.”
For Trane, Ward believes one of the advantages of the Nexia platform is that the company can constantly test for vulnerabilities and, because it’s a cloud-based system, apply updates without the consumer having to do anything.
“That’s very reassuring to people,” said Ward. “We use encrypted communications and invest a significant amount to ensure our security protocols are as tough as possible. Like many conveniences we’ve all come to enjoy in life, there are cyber risks whenever something is connected to the internet, but doing business with a company like Ingersoll Rand/Trane with a long history of quality, reliability, and consumer protection gives consumers peace of mind.”
STAYING AHEAD OF THE CURVE
The very nature of internet-enabled devices calls for constant software upgrades and new features.
Rheem stays ahead of the curve by focusing on interoperability and how the company can play in the home automation space.
“We’re one of few manufacturers that currently offers an application programming interface [API] for product integration,” said Alderson. “Built around a robust API, Rheem and Ruud can provide simple remote control and diagnostic access to our products, which means contractors, distributors, public utilities, home automation companies, and other third-party businesses have an unparalleled level of integration opportunities with our systems and products.”
Partnerships with technology companies can also be beneficial. Johnson Controls is one of many manufacturers taking that path.
“For decades, Johnson Controls has been providing equipment and systems that communicate in real time to deliver optimized environments,” said Sinha. “Today, the company continues to pursue innovation and has partnerships with leading-edge technology companies like Microsoft and Cisco to further the agenda of smart environments.”
Trane attempts to listen to its customers and dealers to best understand their needs. The company has utilized Amazon Echo integration based on user interest. Through the Echo device, users have the ability to control Nexia-certified devices in their homes, starting with lighting, thermostats, and plug-in wall modules — all through voice commands.
Moving forward, Mitsubishi Electric plans to continue developing IoT solutions by investing in its own people.
“Over the last few years, we have made a significant investment in our North American engineering center outside Atlanta,” said Miskewicz. “Within that engineering center, we built a team that focuses on the entire ecosystem of controls, developing end-to-end internet-enabled solutions entirely in-house. By doing this in-house, it allows us to stay ahead of the curve and develop products and solutions specifically for HVAC and our end users. We are developing specific solutions that are functioning the way customers want to interact with their HVAC systems.”
Only time will tell how that customer interaction will evolve and change — and how, exactly, it will influence HVAC product design — but evidence suggests the HVAC industry is ready for the IoT.
Publication date: 8/29/2016