WHERE HAVE ALL OF THE MANUFACTURERS GONE?

I am of a certain age which has allowed me to witness two expansions and contractions in the number of commercial controls manufacturers. Prior to the 1980’s dawn of DDC, there were the “Big 5” manufacturers of pneumatic controls: Barber-Colman, Honeywell, Johnson Controls (“JCI”), MCC Powers (now Siemens), and Robertshaw. Since then we have witnessed:

1. First wave of DDC manufacturers. The growth of microprocessor technology in the late 1970s led to the first DDC controllers. These products were introduced by a small group of startup companies. While the “Big 5” were playing catch-up, many others with the engineering know-how and entrepreneurism entered the market. This led to an exponential growth of DDC manufacturers that lasted for about 10 years. If I recall correctly, there were as many as 40 “BAS” manufacturers in the U.S. at the peak of this explosion.

2. First contraction. Several forces led to a reversal that began in the late 1980s. First, the “Big 5” had caught up with the DDC trend, and, at the same time, many of the startups failed due to the challenges of our industry (i.e., having a “DDC Controller” does not make a commercial controls company).

3. Open protocol wave of DDC manufacturers. The LonWorks ecosystem provided a relatively easy means of entry for this next wave of new manufacturers.

4. Second contraction. The growing acceptance of both LonWorks and BACnet DDC controllers meant that they started to be viewed as price-point sensitive commodities. This put financial pressure on the smaller manufacturers. Further, the larger manufacturers began to buy up the smaller LonWorks and BACnet manufacturers as a simpler path to adopt these protocols.

This second contraction has led a return of the “Big 5”: Honeywell, JCI, Schneider, Siemens, and Tridium. There are some clear familial lines between the old and new “Big 5,” such that one might ask “Is this Back To The Future?” I’d say yes and no. Yes because, as with the 1970s golden days of pneumatics, the lack of a “market disruptor” has led to a stasis in technical advancement. However, history never repeats itself perfectly, so there are some important differences:

• “Doesn’t Honeywell own Tridium?” This is true, but Honeywell’s market approach is a bit too complex to stick it into one box. They appear to be hedging their bets via offering both a variety of Tridium “Niagara Framework” based systems (e.g., Alerton and Novar, which they own, along with the Honeywell-branded “WEBs…”) while also offering Honeywell-branded controls products (e.g., EBI and ComfortPoint), which are not Tridium-based. Perhaps it should be the “Big 4.5”?

• More important is the widespread adoption of the Tridium-based systems by many, if not most, other manufacturers. Even JCI and Siemens offer a second tier of controls products using Tridium technology. This has essentially bifurcated the BAS offerings into “Tridium-based” and everyone else.

• There are a still a small number of other controls manufacturers that have survived the above contractions, still appear to be successful in some markets, and are not Tridium-based, so the dominance of the “Big 5” and Tridium is not absolute.  

So what does this mean about the future? One possibility is the market acceptance of the Tridium platform as a de facto standard.  This would probably lead to a further implosion of the manufacturer choices available to us. I doubt that this will happen given the strength of JCI/Siemens/Schneider, whose main offerings are not Tridium-based. But even without this Tridium “takeover,” I only see further contraction in the market. Sorry, but, unless they start offering some trendsetting technical advances, I believe that more of the non-“Big 5” manufacturers will continue to disappear.

Fortunately, I believe that we are on the cusp of yet another market-disruption cycle that could lead to another expansion. There is an overwhelming need and demand for the application of more (artificial?) intelligence to BAS (self-driving cars are close at hand, yet manually tuned PID loops are still the norm for commercial DDC control). Facility Analytics is already showing some promise of providing this “intelligence” and perhaps being the nexus market disruptor. However, this technology currently operates “above” the BAS level. Will this continue and lead to even more commoditization of DDC controls? Hopefully not.