Q- As the CEO of the company, can you tell us about your journey and how the company has evolved over the years?
A- I joined Buildings IOT in 1998 and became the CEO about 10 years ago. During the last 10 years, there has been a huge amount of transformation for the company. When I first joined the company, we were a distributor, selling controls products, and over time I realized that we needed to get into the deployment of the technologies and explore new use cases working directly with owners.
We were fortunate to land some accounts that gave us access to around 100 buildings where we integrated with different vendors from BMS and systems like lighting and power metering. This helped us get a better understanding of how to integrate systems effectively and provide a better environment in the building. It was at this point we realized that data was not easily available and there was not a lot of software available on the market that was fit for this purpose. This led to our first software build in 2008. We then sold that piece of our technology over to Tridium Inc, which is now the basis of Niagara Analytics. A few years later, we started building an analytics platform and a cloud-based platform for managing buildings and operating buildings. Two years ago, we sold the distribution part of the business and the business today has two cornerstones, one is our software and SAS for PropTech, and the other is our MasterSystem Integration and controls contracting.
Q- In recent years, we’ve seen a shift in attitudes from the property industry and a recognition that the industry is not just about the buildings, it is, and should be about the people that interact with them. How have you seen this relationship change and the driver for PropTech change over the years?
A- It’s interesting because the basis of Psychology and human factors, which is the undergraduate degree I studied, is looking at the human impact on the environment that they are in and the environment’s impact on the human – which plays in well when we are talking about buildings and the built environment. Whether it’s schools, office , buildings or museums that we are talking about, it’s important to recognize the fact that people can be positively or negatively impacted by the environment they are in, and the environment can be positively or negatively impacted by the way people use it.
The industry has known for a long time the impact a building has on the health and productivity of the people within it, but measuring ROI and understanding how this relates to value and numbers, has proven to be difficult. And so, the cost has been the focus for those looking at PropTech. What we are seeing in the last couple of years is a slowdown in deployment as people are trying to satisfy ESG goals, which include more than just energy savings. In fact, if you really want to be carbon neutral, you might actually spend more energy. To give you an example, in the building that I am in right now, there is fresh air coming in to create a healthier environment and maximize productivity. The outside air temperature is currently cold, so they have to warm it up, which subsequently costs them more money. A lot of clients that we come across would rather starve off fresh air in order to save some energy. As those two paradigms fight against each other, ESG and other pressures are going to create a drive toward improved health, safety and comfort, rather than just pure energy savings.
Q- What challenges have you faced selling your product to clients or in implementing your solutions to clients?
A- Some companies that we are talking to are not prepared internally to make use of the platform, whether it’s our platform or technology that we might want to bring in to solve some of their problems. Once they start to understand that to operate a building well, and use products like ours, it’s not just capital expenses. Expenses can be high if you have to put new technology in the entire building but if you are integrating technology you already possess, then the capital expense can be relatively low. The ongoing expense of operating these systems that are now helping you operate your buildings is a new expense for people. We have to shift the paradigm of how much effort and energy it takes from the manpower to manage these buildings in a different way because they’ve been managed essentially the same way for almost 40 years.
After implementation, you then have a whole different host of problems, such as legacy technologies that were never intended to be part of an integrated platform. You’ve got a lot of different technologies going into buildings that all want to be the primary user experience, and sometimes those tools are great, and most of the time, they’re not. They also need to be part of an integrated building, but often technology providers, for example, BMS manufacturers or lighting manufacturers, do not want to do this. They may want to be the primary solution to access everything, which is all motivated by owning the customer. Beyond just the pure technology and complexity around integration and making sure the data works well together. Sometimes that preparation is more difficult than the integration itself. From the client’s perspective, I think they need to get serious. We’ve seen a lot of property companies dabble in deploying technology, wherein some have been more successful than others. But even with the most successful deployments, out of the 3000 buildings the property company has in a region, they will have only piloted technology solutions in 30 of those buildings over five or six years. They’re not taking the step to get to the next route.
Q- Despite these challenges, you have managed to grow and scale the business across Australia and now the UK. Can you tell us about your experience entering the UK market?
A-It takes time. What we’ve learned is that if you’re trying to sell enterprise software and the clients are serious about making the right decision, they are not going to make that decision on a phone call; they are going to do their research. They are going to understand what they are going to use. They are going to understand the value they are going to get out of it and decide, which could take anywhere between 6 months to a year.
Similarly, in the US, we have seen that in the UK too. What we are finding in Northern Europe and the UK is that there is a lot of pressure coming from legislation and peers. Also, the complexity of London being so compact in terms of buildings and people, means that consumers want the buildings they’re in to be energy efficient and want to be working with companies who have strong ESG standards and commitments. This is driving an interesting dialogue. I would say that the UK, in my experience of the last 12 months, is somewhat ahead of the US. We certainly have pockets in the US that are engaged in the ESG agenda, but it is generally small pockets or cities within a few states. As success happens in Northern Europe and in the UK, we are going to see the US close that gap quicker over the next three to four
Q- Lastly, what is next for Buildings IOT? What does the year ahead look like for you?
A-We have had a strong close out of 2022 through purchase orders, commitments, and contracts, so we are now answering 2023 with the largest backlog since the pandemic, which is fantastic. We do see the obvious challenges with the economy, and it’s not as robust as it was prior to the pandemic, but we think that this is one of the areas of the economy that’s going to continue to grow. Although I don’t see exponential growth happening in 2023, I do believe we’ll see a continued growth cycle happening within the PropTech space, especially when it comes to things that can directly contribute to ESG and carbon neutrality. ESG is going to be one of the things that takes it up a notch, and we will see more of the industry start to take this seriously. The questions we are getting from end users today versus the questions we got three years ago are a different order of magnitude, and they are way more insightful, which I believe comes from property owners doing their research. I think that we are on the cusp of some really good growth in our industry.
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