Not all Integration in The HVAC Industry is GOOD, Some is BAD, and Some is Just Plain UGLY

GOOD: If you are on this web-site then it’s safe to assume that you are a professional that makes your living manufacturing, specifying, selling, installing, integrating, or servicing HVAC equipment. A few tidbits about the industry: At the end 2010, the HVAC Industry was estimated to be $49.3 billion. Part of the schema of our standard of living is based on the extraordinary and advanced equipment that we’ve come to expect, with greater and greener shades of performance and efficiencies still to come. To their credit, the big equipment companies have indeed, delivered.

Yet, the equipment manufacturers constantly face what I see as the royal flush temptation – the perfect hand, the technical business term for this is backward integration. In this type of integration the goal is not to open things up, like we do with a JACE, but to close a supply chain down, giving a customer fewer options and controlling the after sale as well as the original sale. Here is how it works in our industry: Make the equipment, get it specified and win the project, install the equipment, sell the service contract the equipment, and then live happily ever after with the proprietary software – the concept must be utterly intoxicating. Do you feel the noose tightening yet?

BAD: It’s working. Which of the top four major players (Listed in order — Capstone Q4 2011 Report): Carrier (12%), Trane (10%), Lennox (4%), and Johnson Controls (4%), really drive the open solution? (JCI, maybe?) Equipment manufacturers are practicing protocol appeasement, not open solutions. This is a disguised intermediate step fraught with duplicity and extra cost, until the final solution is found. From where I sit, these guys are all only missing one card and getting that missing card has to be highest on their priority lists.

Market-Nature has dealt nobly with this heavy-handedness. The largest MUSH Market users (Municipalities, Universities, Schools, and Hospitals) wanted solutions to proprietary protocols, and over time, open standards became a reality, and some others bolder solutions came forward: Richard Zeta (Trane Comm3, Comm4, and N2 Drivers), Tridium (CCN Driver), Easy IO (Trane Comm3, Comm 4, and N2 Drivers), that have adequately protected our jobs and the investments of large equipment users through competition.

UGLY: Despite all the progress that has been made and how the equipment manufacturers are able to provide open protocols — as extras, while they simultaneously continue their investments in their latest versions of proprietary software that comes standard with every unit, presumably in an effort to draw that royal flush. You think someone would have dreamed up a green protocol by now.

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5 Responses

  1. The UGLY…The “Green Protocol” has been dreamed up by the manufactures it’s called GREENBACKS…. Everyone has a right to make a couple of bucks but when manufactures try and take it ALL for themselves it will, and it has, come back to bite them.

    The BAD… Seimens and JCI have been doing it for a while but when their installations start to out weigh the ability to service the installations unhappy clients are created faster than the installations are.

    The Good… Users are really starting to “get” proprietary installations slowly but surely. It’s the job of suppliers and private installers to get the word out to the end users through talking and forums like this one. Get the word out to specifying engineers to push through specifications that require the ability to have truely “OPEN PROTCOLS”. The sqeeky wheel gets the oil squeek to the right people THE END USERS.

  2. Worked in a Schools system HVAC Dept for the past 19 years, I could not have said it any better. They know how to squeak.

  3. This sums it up great. The big players really want to get that royal flush. They don’t care if the customer is happy though, they just want to ‘deliver a profit to the shareholders’.

  4. Very true and very Sad, Honeywell branches up the ante a little further by having licence restrictions on “open” devices, (The Comfort Point Jace comes to mind) The technology may be the same as a Honeywell Webs open or Vykon Jace, however only a branch licensed workbench can connect to it!

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