Siemens’ fast-paced acquisitions of J2, Enlighted and Comfy this year portend the company’s keen interest in maintaining a foothold in the coveted smart building sector in coming years. In a one-on-one discussion with the President of Siemens’ Building Technologies division – Americas, Dave Hopping talked about the company’s vision and strategy for the smart building marketplace.
Hopping, who leads operational and commercial activities for Siemens’ broad portfolio of products and services in building automation, energy management, fire safety and security solutions for facilities and enterprises in the Americas, articulated the company’s acquisition strategy.
“The acquisitions were about identifying where the open opportunities were in smart building technologies to create new value for our customers. For us, J2 was about offering a completely open software; Enlighted was about leveraging an IoT– and sensor-based infrastructure; and Comfy about occupant comfort and how to connect users to the building,” said Hopping in an interview with In-Building Tech.
While the company has always maintained a firm hold on the building systems integration market, the acquisitions were an opportunity to add a layer to data analytics that could bring new value to their customers.
“It was also an opportunity to acquire talent that we could leverage as we build our strategy in the future and increase our speed to market,” said Hopping.
Hopping added that while these acquisitions have been primarily in the commercial office space, the core technologies could be used in other vertical markets. “We didn’t acquire them to stand alone,” said Hopping, who indicated that warehousing and healthcare could be areas for vertical growth if the right use case with robust value were to emerge.
The Siemens’ chief identified three significant trends gaining momentum in the smart building space: a desire for integrative technology solutions that drive return on investment for customers, an increase in as-a-service business models, and the relevance of forging a new relationship between users and the buildings they occupy.
Building an integrative approach
While the vast proliferation of companies developing technologies for smart buildings that range from driving efficiency and energy savings through building automation systems to occupancy and space utilization applications have been boons for building owners and occupants, they often exist in disparate silos and are deployed in ways which result in redundancy and duplication.
“Offering a well-optimized and integrative approach that eliminates duplication is essential,” said Hopping who noted that commercial office, hospital, warehousing, airports, and R&D projects in labs are areas where a comprehensive approach is most needed.
“When customers visit our Ingenuity Center and see our roadmap, I’m impressed with their reactions to our journey and what we can do. However, there has to be a compelling business case for customers. They want to know what is my return,” said Hopping.
“Very few customers will come in and buy a smart building. We have to be able to maximize value without increasing costs,” he emphasized.
The way to achieve these customer goals is by building before and after models that provide a clear picture of cost reductions and energy savings for Siemens customers and by offering “as-a-service” platforms, which are picking up traction across the smart building market, said Hopping.
As-a-service smart building business models emerging
An “as-a-service” model is when the customer purchases a service or subscription from a third-party service provider that then delivers the service through assets it owns, maintains and improves. It eliminates upfront capital expenditures related to deploying technology solutions.
The as-a-service business model enables customers to forgo capital expenses and use gains from optimizing building operations to offset the costs of subscription fees in operating budgets making it easier to justify the deployment of smart building technology.
Connecting people with the buildings they occupy
With 90% of our time spent inside of buildings, owners and enterprises are coming to terms that exploring the relationship between the user and the building can drive tremendous value for both users and landlords.
“One of the layers of our smart building strategy is to connect people with the building they occupy. Employees working inside smart buildings want to connect with the building and have a say,” said Hopping. “While energy savings are important, employee satisfaction is also paramount. It’s becoming a significant human resources topic as more companies are focused on attracting and retaining the best talent.”