The building management systems (BMS) industry has traditionally been a conservative one, dominated by well-established global players like Honeywell, Siemens and Johnson Controls. But in the past few years, a number of factors have converged to shake up the industry and bring in new players, with companies like Cisco and IBM acting as bridges between heating, ventilation and air-conditioning (HVAC) systems and IT networks. And with 50 percent of all energy consumption coming from the operation of buildings, the incentive to monitor and reduce energy usage by automating systems within buildings — from lighting to air-conditioning to security — is increasing.

A World Full of Sensors

Creating smarter, more innovative building system controls rests on the ability to add a new layer of environmental sensing, made possible by the introduction of millions of wireless sensors into a building environment. These sensors detect temperature, humidity and speed of movement.

Why the need for them? Knowing precisely how a building is being used at all times and centralizing that information in one place allows buildings to actually get smarter about energy usage and lets the industry address commonly asked questions: Does the data center need to be 68 degrees from floor to ceiling? There’s no movement in one section of the office; can we shut down the air-conditioning in that unit? It’s winter in Oregon; can we turn off the chillers in a data center and open the vents to bring in natural cooling?

Steve Lewis, the CEO of Living PlanIT, a company that is partnering with Cisco and the town of Paredes, Portugal, on a greenfield project, estimates that they’ll initially deploy about 3 million sensors, generating about 6 petabytes of data per year. He thinks that in 5 years, they can get to 100 million sensors. With the explosion of connected devices far beyond what people normally consider connected devices to be (think temperature sensors, not just smartphones), one can see how we’ve exhausted the 4.3 billion IPv4 addresses, prompting a move to IPv6.

Deploying sensors is all about feeding back information to improve decision making, whether it’s data about the environment or information about a lighting system. O&M Engineering, a Baltimore-based consulting engineering firm, specializes in bringing older equipment onto a network and has worked in data centers, some of the biggest energy hogs. “We look at the HVAC, the chillers, the boilers, the security systems, the access control. Once we get connectivity and visibility to existing equipment, then we can start synchronizing equipment to make it more efficient,” said Christopher Volpe, the vice president of Sales and Marketing. “The server manufacturer doesn’t care about the lighting. It just needs a temperature. There’s an art of linking them together and synchronizing.”

Making It All Communicate

In the past there have been two major roadblocks for the industry in terms of evolving from building management to building automation. For one, automating a building meant dealing with lots of expensive cabling to connect different siloed building systems. Second, there can be as many as 80 different software protocols and multiple separate networks in a given commercial building.

The solution? Make it wireless, and make it all communicate. These demands have brought new companies, from smaller fish like EnOcean to global IT companies like Cisco, into the building automation market.

Cisco in particular continues to invest in products and projects to make its technology the singular network in any automated building. The company’s recent history has been a challenging story, if only because its stock chart for the past 12 months reads like a series of quarterly cliffs: Cisco has repeatedly missed Wall Street’s earnings expectations and has had to revise revenue guidance downward. Over $30 billion in shareholder value has evaporated as the company has encountered increasing competition and margin pressure in its core routing and switching business and has acquired consumer-facing businesses like Flip and Linksys, which have failed to show solid margins and returns.

Cisco’s core competency has been building the network that runs the Internet, but as competition grows to do that very thing, it’s no longer enough just to be the network. You have to show the ability of that network to save money and maybe even help the environment, which explains Cisco’s move into the building automation market. ABI Research pegs the market at $36 billion by 2015, and a critical piece of that growth will be the ability to get multiple building systems onto one IP network, so that monitoring and energy savings can begin.

Cisco’s primary building automation system (BAS) product, the Network Building Mediator, is a big box lined with an array of analog and digital ports that collect data from IT, building, energy supply and energy demand systems. It’s protocol-agnostic, meaning that all data is normalized into one common language that can be understood by a dashboard and, ultimately, a facilities manager. NetApp implemented the product and estimates that it saved 18 million kilowatt hours in the first 18 months, with a cost savings of $2 million.

And it’s not just the private sector that’s sending the same consistent message about building automation. The General Services Administration (GSA), essentially America’s largest real estate agency, has taken President Obama’s executive order requiring all government agencies to reduce energy usage by 30 percent by 2015 in the same vein. The first two goals it lists in its Smart Buildings Initiative are to “implement a single optical IP backbone” and to “integrate disparate building systems so they can be controlled by a centralized common user interface.”

Wim Elfrink leads Cisco’s $7.6 billion global services division from Bangalore, India, and reports to CEO John Chambers. He and I spoke recently and ran through the numbers. Seven hundred million people will move to cities over the next few decades. And $10 trillion will be spent on construction and urbanization. At a conservative 2 percent spent on IT, that’s about a couple hundred billion dollar market that smart building technologies can participate in. And all this is coinciding with rising commodity prices.

Referring to the various systems found in a building, Eflrink said, “All these devices will be IP-enabled. It’s like the Internet 30 years ago.” He added, “It requires leadership, open standards and, particularly, a new industry for partners.”

Elfrink acknowledged that the facilities management and building construction industries are among the “most conservative,” but he felt that there are enough drivers of change — technological, governmental, environmental — to push the building automation industry into a new era of innovation.

Companies looking to enter the BAS space would do well to consider a few key things:

1. Implement solutions that make it easy to get a given building system onto an IT network.
2. Make it possible for different building systems to integrate and communicate with one another.
3. Consider the value of wireless sensors. More importantly, ensure that the wireless sensor proposition is low risk by making the sensors as reliable as wired options.
4. Realize that the greatest savings in operating expenses come from automated decision-making tools that actually lower labor costs; energy reduction is compelling, but so is hiring fewer employees.

Man Meets Machine

As building automation technology improves, the next step will be to use that technology to alter human behavior. The Duke Energy Center, in Charlotte, N.C., a 48-story skyscraper with 1.4 million square feet, recently won the grand prize for the Siemens’ Smartest Building in America challenge (the building implemented a Siemens APOGEE building automation system).

The building uses light-harvesting blinds, which automatically rotate to reflect as much light as possible into the building. The rotation occurs in response to sensors on the roof, which feed back information about the direction of sunlight. Add the fact that every lighting system in the building has a MAC address and is controllable via a network and you can see a picture of an integrated building system.

While Jim Patterson, the property manager at Childress Klein Properties, which manages the Duke Energy Center, is excited about all the efficiencies brought about through new building automation technology, the innovation that has him almost more excited is the ability to submeter. Unlike most commercial office buildings, every floor of the Duke Energy Center has its own energy meter, which in turn opens the door to charging tenants based on their energy usage. “It’s about restructuring leases so that [tenants] pay energy separate from their rent,” said Patterson. “Most commercial office leases don’t submeter individual tenants and have them pay based upon actual use of energy.”

It may be that the ultimate solution lies in the combination of building automation technology and the financial incentives inherent in submetering. In the end, the two endeavors may not be separate at all. The sensing involved in BAS is about having machines more fully understand human behavior and a given environment so that the machines can make better decisions. And if we can use machines such as submeters to get humans to make better decisions, then we might just have the best of both worlds.