Episode 336 ControlTalk NOW: The History of Building Automation and Smart Building Controls

Here is the transcript of Episode 336. We really dive deep into the history of Building Automation and Smart Building Controls. Enjoy!

Eric Stromquist  

The following is a presentation of the ControlTrends podcasting network

Unknown Speaker  

123

Eric Stromquist  

This is Eric Stromquist. Welcome to control talk now you’re smart buildings, video casts and podcast for the week ending. October 27. There we go. This is Episode 336, where we talk about all things smart building controls and HVAC controls and I am joined

by your

co-host, the man, the myth, the legend, the one the only secret Hey Jeff, man, Kenny smiles. Kenny, welcome to the show.

Ken Smyers  

Thank you very much, Eric. Chilly, chilly chilly Billy parents. Mother, mother winter has knocked on our door. So

Eric Stromquist  

well. Listen, I tell you what, we got a great show. It’s going to run late today. But I can tell you that if you stay till the end, you will learn one of the secrets of the industry that people have asked us about for years. And so you definitely stay tuned to this interview and we’re going to enjoy before We get to that Kenny man the nomination ballots are out. Sure. And, man, so if you’re not sure about where to find those, it’s on the ControlTrends website, on the right hand side, you can click that link, it’ll take you to the nomination ballot. And you can also copy that link and send it out to your network. And remember, you can nominate to three, three different nominations per category. And if you don’t see the one you like, in there, there’s a thing called other, just type in the one you want for other and Kenny will make sure it gets added to the official ballot. And we’re rocking and rolling. So let’s get that done because that nomination periods going to end here in about a month. So let’s get going. Yeah,

Ken Smyers  

so we’re getting a huge influx of people doing that so we’re catching up of every second day. The others have been added to the categories and they’re starting to lengthen and broaden in in the number of products and pack solutions people that’s great industry and to see this participation. I love it, you know as we have a very interesting Interview coming up. And we talked about some of the histrionics of the building automation world and where it was seated from, you know, and how it came to, to be where it’s at now, and it was the big thrust is people. I mean, yeah, technology is great. And obviously, you’re only as good as your last program, you know, but the people that have really elevated it made the move the needle in the industry, we see a lot of them that their career spanned 3040 years, and they’ve taken, you know, their particular companies, you know, you know, picked up the banner and marched forward, you know, for all these years and made sure that they did everything right, you know, and worked well with people work with products, you know, and the marketing, as you said many times, the silent hero many times is the marketer, the person sitting back there sweating out the message, the knowledge, how do you how you put that into a coherent marketing theme. And, as you say, all the time, everybody’s got a great product. I mean, that’s just that’s, that’s the ante is great products, great solutions, great technical support. You know, where The real test to come is the is the marketing.

Eric Stromquist  

Right? It’s going to be great. And we actually recorded this interview because of scheduling before we’re actually cutting this part. So I can tell you it’s gonna run long. It’s worth hearing everything this gentleman has to say. So Kenny, without further ado, let’s rock and roll and let’s get this show started.

Ken Smyers  

Sounds good, other stalwart in the industry, a guy that’s seen a lot and shares a lot. We have Mr. Leroy Walden, President and Chief consultant of high rose consultant, LLC. Welcome to the show, Leroy.

Eric Stromquist  

Hey, good morning, King. morning air. Hey, Leroy. We’re glad to have you brother. And listen, man, I gotta tell you, Leroy is done some great things. And then as trees work for several several master systems integrators around Atlanta, and he personally has helped me pay off two of my divorces the alimony so I’m just hoping there’s a way that we can monetize this relationship as well because I’m still paying for chip.

Leroy Walden  

I’m glad I could help Eric. Yeah. Leroy and

Eric Stromquist  

I go way, way, way back man to the 80s. I mean, when we first got started, we were doing the mathematics and then we’ve gone from pneumatic to electronic and from electronic to DDC. And now you’ve gone from, you know, integrating all kinds of incredible different systems to consulting. So, I guess for our audience real quick, sort of walk us through some of the some of the changes you’ve seen along the way and sort of what’s it like to be a consultant now. So we can talk about the history of Building Automtion Controls and how it has changed over the years.

Leroy Walden  

But appreciator? Yes, it’s been it’s been quite a journey. I never were real. I never would have realized when I was going to school, that thermostats and temperature control will be a way to make a career so I’ve been blessed with having a having a career began in 1978. a pneumatic Yeah, pneumatic electric, actually, you and I became really closely affiliated in the Barbara Coleman system. 8000 Electric product was right really, really solid product back candidate. Even some of the old state electric electronic controllers back in the day we were, we were really on the cutting edge at that point because up to that point and then brass cell phone and oilfield capillary tubes and pneumatic pipes and pneumatic diaphragms and air compressors and those kind of things. So, so the electronic age was really ushered in. And we talked about disruptor control based upon computer computer automation, because hell we’d already landed on the moon, you know, so we got to be able to do something with computer automation So, so that kind of crept into our industry and mid to late 80s. And then lo and behold, it came in like gangbusters in the 90s. And so, literally overnight, the industry was transformed with with computer and microprocessor based controller systems. Yeah, they were pretty expensive and they were kind of low capacity in the beginning, but we all saw that we all saw the future that was headed our way with wristwatch calculators and And pocket computers and ultimately lyst desktop and laptop computers. So we knew that it was going to come our way for buildings and those of us who had really come up in the in that age felt like it was time. And in some respects it felt like it came slowly. But in another respects it really was more like a revolution where it’s kind of storm the beaches and it came on quickly. So Brian,

Eric Stromquist  

well, I tell you what, Leroy, you know, 78 so yes. For audience out there that think you know, Ken and I are young millennials and we was young millennials. Yes, we are really that old. Yeah, that’s gonna

Leroy Walden  

say that was a nice way you said had a telling me that I was old can appreciate that.

Eric Stromquist  

Yeah. But I think it bears a little history lesson. So there are a couple things that if you guys want to win a ControlTrends Trivial Pursuit couple things you need to know if you’re especially if you’re a newer person, the industry First of all, do mathematics uses air and it’s not spelled in EWMAT ICF Exactly. He is You so that’s it now the second thing is you could almost argue Leroy that Georgia is the home of building automation controls and I say that because you will remember that all this came about when the peanut farmer from Georgia Jimmy Carter, President we all embargo and all of a sudden they tried to make people drive 55 miles an hour set your you know your thermostats back and everything and buildings energy became a premium. Okay, so it started back in the day the only people that could really make a system where people like you know, Honeywell and Johnson Controls because computers were new, and people couldn’t program or whatever. So everybody had a proprietary language. So you know, Honeywell had theirs. Barbara Coleman had theirs and basically when it first started, the only people that would work on the systems would be the branch offices right because it was too damn complicated. Exactly. And the protocols were separate then we were you one of the first people to come along and it was Robert shot was the system 350 that you when you were with sheer that you guys took Calm with

Leroy Walden  

the damage. DMS 350 was Robert Shaw controls answer to building automation, multiple iterations before that, but really, the product and the system that they really had a home run with was their DMS 350, which was largely built around the microprocessor based central panel that utilize this new thing called the desktop PC as far as the human interface, so the user interface so so it really kind of hit a home run over that time. And so, really fortunate.

Eric Stromquist  

They did, they did, but I want to acknowledge you because when they went away from the branch offices, to working product directly to give customers an alternative for the branches like the Johnson branch, Honeywell branch, and so on and so forth. You guys were one of the first people to get set up as an independent solution with that. And so talk about the requirements you had to have them versus the climate. Yep,

Leroy Walden  

it was. Hell, you know what, you know, I appreciate you knowledge in it because it was a challenge being basically what I learned when I was in the branch off because I actually worked in the branch office for five years is that it’s almost like the branch offices are a launching pad for people to begin to career, the organization and launch off to a bigger position up into the corporate office and corporate headquarters and so, so really, when you get right down to it, everyone in the branch office of branch manager, the senior sales engineers, the construction managers, so forth are all focused on that next big put that next big promotion in the organization and they kind of left behind the customers and Lyft behind the products the projects is almost like build an abandoned because, you know, basically they’re trying to do is drive top line revenue to get a notoriety in their brains. Now, I hate to have to admit that some branches were better than others and some people in branches were differently focused but as a as a whole. That was what I saw in the industry. It was very, it was very discouraging me because I knew that longevity in a marketplace dependent closely upon an affiliation with a great group of customers, you know, it’s no doubt about it, the number one thing that we do in this industry is we create long term relationships and long value race relationship with customers, because the products that we put in are very custom and very bespoke. And consequently, it requires a lot of investment of our sales as we install those systems. And it also involves involves a strong bond of trust with that customer, because in many instances, they could go and do some of the things that we do. But by and large, they’re in another business. They’re basically leasing property managing properties and those types of things. So they have to rely on professionals and people that they can trust to build a system for them. So So there are many factors that went into what it took for us to actually acquire that product line. You know, not the least of which was the fact that I had worked at the Robichaux branch office for five years prior to joining this independent temperature control company, and we had a lot of experience with that product guided at that time. And so it was it was let’s say this a little bit A sales job that we did, because here we were a company of four or five individuals really bright, you know, undercapitalized, no doubt about it. But we had some great customers, we had some great relationships. And those are really the thing that brought us forward. And from there is basically was, you know, had a great product, we had a good pricing point to sell that product. We had some unique characteristics about our company, and the fact that we did temperature controls, and we did mechanical service. And so a lot of that kind of went hand in hand in one industry, one part of the business and the other part of it is so, so that was a real key for us being multifaceted. And not really, maybe we were too stupid. Or maybe we were just fearless. But what which one which way it took that we stepped up took some really large and complicated projects on the front of the box. We were working from Alaska to to the Virgin Islands, and we were we’re doing work and you know, customers do and I shared for quite a number of years in the US Army. Engineers really liked what we were doing. He was infatuated with the product and technology and so consequently had a chance to go with him. Do some really some really interesting projects across the US

Eric Stromquist  

really was great projects. And Kenny, you had a question to hop in if you No, no, no, not really.

Ken Smyers  

Question I just commend you guys for bringing the history of Building Automation Controls here histrionics because I think you nailed it with the Jimmy Carter era. That was it. That said back then was that out of California, kind of set the whole whole thing emotion, what but everybody to line but I wanted to just go over the Delta, DSM 350 and Robert Shaw, that group of people that started that to also probably were the precedent setters for the whole growth of DDC and the next level next level, some of the really fancy names to include the Frank family. And you know, Beatles are matrix all these guys all came out of that Robert Shaw, core of early beginners, early adopters, amazing history and then we Had the delta I was the Honeywell side of that. We didn’t really have it. We were a distributor. But we started hearing about all this Honeywell stuff. So we had the persuasion was a little bit different. And our first ventures were going to the prom days were used to take the brands to get him foot, and then get him flash and bring it back home and try to stick them back into my places. But that’s a great history. I mean, this is

Eric Stromquist  

no, no, no, it is. And this is great. And lou is a great guy to talk to about this because then the next step that came on about four or five years later, so Leroy and his company and several like him across the country sort of pioneered the whole idea notion that somebody other than the branch could install the system. And then as things went on, you know, got tech hats off to Honeywell and Johnson Controls because they were the first people to bring distribution into it and created a product specifically for distributors to work with. Maybe contractors at the time that weren’t as sophisticated as Leroy’s company was and I got to tell you a funny story about that and then we’ll get on to it but at the time, you know, while we were selling Part Two pieces, Leroy and a guy you know is going to come to the story in a minute, which is what I want to bring it up. Yeah. So Johnson Controls comes in and says, Hey, we’ll give you the take on the DDC product line will give you an additional 20% discount on your products. I think this is great. We’ll you know, we’ll go out and we’ll take advantage of that. So I tell the president, the company at the time, Lewis cook, I say, Louis, we get this deal from Johnson Controls, you know, additional 20%, probably about six months before they realize that we’re not don’t know anything about it. But we can look at 20% for six months. And so Louis goes, Okay, I’m game but you’re in charge of it. You’re the guy was in charge. Anyway, you know, a couple weeks go by and all of a sudden I get a call from the counter, and they go there’s a guy down here that wants to buy some Johnson Medicis from us. You’re the guy, right? And I said, Yeah, I’m the guy. So I go down. I said, Sir, I need to introduce myself. I don’t know anything about this product. But, you know, he goes, it’s okay. I’ll teach you. And the guy was a guy you know, Ted Riggs.

Unknown Speaker  

Oh, yeah.

Eric Stromquist  

Ted would come in every morning he took a couple hours and he would teach me everything and Ted to type of guy. He asked him what time it was he tell you how to build a damn watch. Right?

Leroy Walden  

Exactly. Oh, yeah. And how and how the time base was invented. Yeah.

Eric Stromquist  

I got way more than I needed. But that’s how we got involved in DDC. You know, with the Honeywell and the Johnson sort of evolved from there and Kenya knows probably somewhere story with you guys.

Ken Smyers  

Oh, yeah. I was actually in Germany at the time was 1992. And I get this letter from home from my father. It says come back now or forever hold your peace. And it’s about an eight page handwritten letter. So we went into detail like the time maker you’re talking about, but honey will head just begin what they called their operation monarch and they were taking the branch and they were it was it was a they were downsizing the branch and they wanted to put this capability into distribution. So a lot of people left the Honeywell branches and went in either a contractor, business or distribution business but all of a sudden is the secrets. The secret sauce is being led out of the out of the honeymoon. Will you branch envelope and they began, what was it called? So I came back in 1993 to a family business and actually flew out to Honeywell met a guy named Alberto Bartholomew and Roberta. conversation was in Germany because I was still proud of myself. I got my details from disruptor. We had no conversation, Jeremy said, Well, you know what? Okay, so we wanted to get on board with the Honeywell DDC program. And we they pass this on the first round. So we picked up in 1993. But oh, what an uphill climb. I was we didn’t even have a I think we were the last people to get a fax machine. Honeywell gave us a fax machine because we call the orders and they said Finally, please use this thing. It’s called a fax machine. And so we were brought into it kind of unwittingly and unwillingly. But that’s where the technology that’s when I thought this was really cool. I was cutting the grass one day thinking about the software programs and as backward as floppy disk zone and how much money we’re going to buy in terms of the investment computer. You know, I mean that was back when they would cost us considerable amount of money. And and we were arguing between I think was gateway and down which was better than Honeywell would only support one versus the other. So it kind of steered us through the pathway and look where it’s gone look look look at now

Eric Stromquist  

what what has gone a long way and I’m gonna I’m gonna flip it back over to you because back in the day and Kenny I think you agree with this I mean, there were basically three strategies right for energy management you did time a day you did demand control you’re monitoring the current coming in turn the stuff on and off and what was the other one we used to do? their duty cycle yeah duty cycle some people who do that anymore?

Leroy Walden  

No, thankfully.

Yeah, yeah.

Eric Stromquist  

You’ve seen tons of changes because even back then you were integrating thing like lights and stuff like that, which for us, you know, didn’t happen but but so did you kind of went from there to walk us through where you went from there cuz he was

Leroy Walden  

interesting and can you brought up The Jerry Frank connection with the Ron Michelle platform because one of the final iterations of that Robert Shaw DMS product was known as a systems integrator and it was a really I mean talk about you know fill in the earth shape whenever they started talking about this stuff I got really excited because the we had several customers they wanted to have their fire alarm system and there be a mass and they’re lighting all under one one operator interface so that they could have their their operating bureau or their chief engineers or whatever set in front of one machine and be able to command and control just like in just like in the Houston space it you know, that’s that was the vision. And so Robert Shaw really was the first one to step forward and they did it not necessarily by owning all the technology and the brainpower but they use the strategic partnerships with power products, fire alarm systems and with GE lighting and, and several other big name brands like access control, big name brands, and and Really their biggest partner was IBM, IBM stepped up with this new platform. And they call it OS to that basically was a multi threading, multi processing, really elaborate piece of software that allowed a PC at that time called a PC, a desktop PC to actually multitask of multiple systems at the same time. So essentially, you had all the front ends for all these various systems running simultaneously in the background. And then Robert Shaw and IBM build up this unifying user interface that allowed binding of points and they use this thing called a virtual object or a shadow object and all these other new term that really come into the industry that were just brought down my throat down my bailiwick, because coming up through the early days of microprocessors and desktops, and mainframe computers, I was like, yeah, we need this multi threading because we got to have more capability come out of these processes. And so so really, what What we were looking at at that time and we actually implemented several of those systems, but what we were working with at that time was the colonel for what became the tritium Niagara platform. Because about that time the acquisition of Robert Shaw took place where they got combined in with the BB Coleman network and because BB Coleman had a larger manufacturing facility up in Rockford, Illinois all the think tank and it was in Richmond, Virginia for our show. was told your job will be moved to Rockford Illinois. Well, quite a few of those people had strong ties to the east coast. They didn’t want to move to Rockfield. Oh, they heard of got cold up there. And so so you know, being sons of the South, they want to stay close to the coast and close to where their technical base was in Virginia, Virginia Tech and BR and all those other things that they love about being in Virginia. And so they talked to they talked to the owner and basically took early retirement and all the way out the door. They said oh by the way, are you guys interested in doing anything more This facility integrated platform. And they said no, not really. We got this network 1000 stuff that’s really hot right now. It’s moving along. Great. So you guys, just, you know, have a nice day. Thanks very much. And we’ll see you later it really this began, this began tritium, Niagara because, you know, they had already begun looking at Java and how job could do this multi threading that IBM had taught them was the way to do this. And really, from there, I mean, I know that I’m being kind of clumsy with the actual gestation of how it happened. But I do know this that they have a lot of it to say the owners of what became Barbara Colin CB environmental controls, taking their eye off the prize, that really they had right there right at their fingertips, which what became the Niagara platform, which now has become so ubiquitous that you know, it’s, it’s global. I mean, I wouldn’t be putting on the space station, you know, but honestly,

Ken Smyers  

wow, what a great, what a great summary. And you know, I’d heard similar versions, but I think that was the most succinct you know, Step by step forward of evolution because, yeah, that was just an amazing story. And then there’s, there’s groups of people I, like I say, I think that’s the fun part of going to these big meetings, you know, after hours, you know, seven around 10 o’clock and everybody had one or two and then the story start and, and people really just take the way they best they remember it and the names they drop are incredible. The guys that were you were talking about that little group down here in Virginia. Yeah. I mean, there’s gotta be like, six, seven names there. I remember Ed Richard says he was part of that. And he started the Richard zeta. And then was it Paul Jordan was down here in Ecuador. Yeah. And so to hear those stories about, you know, the intelligence and just like you said, the forward thinking and then the it started that that really became, we’re building automation became a true technical industry where we went from being an owner and being you know, parts of, you know, to the smarts that added this march because we weren’t quite In the 30,000 foot orbits that you run, because I mean that that is incredible and we never had we avoided that kind of investment, like, at all we need to do with it integrating find security that was like, You ran away from that stuff because of the risk and liability, right? Let’s get, you know, whole new expertise in there. So we just focused on boilers burners, chillers, you know, air handling units and so kind of stayed close to the earth you know, in terms of the development of the the actual programming you know, in the in the software development you know, we right, so we’ve kind of again, that’s the honest you know, we’re our entry point where our sweet spot was, was got down closer to the equipment and closer to the

Leroy Walden  

well there were there were very few companies very few companies are actually able to pull off the consolidated system as a, as a sole proprietor at Honeywell probably the best job of anybody, including a fire under their access control and BMS in the early days. of the Delta systems and and what they found quickly as they ran out of steam, trying to maintain all that expertise in house, you know, around those various systems because yeah, there’s, there’s similarities to the way those systems communicate and the things that they do, but there’s great very variability and the actual on the onsite, you know, at the location or the troubleshooting techniques, or, or the reaction or response is those types of things. I mean, I’ve never heard anybody died because the temperature in the space was too high. But I can tell you that if you don’t have a fire alarm system is reporting accurately you can have, you know, loss of life and loss of property very quickly. And so so there’s a different there’s a different focus that involves, so Honeywell, probably the best at doing that. Johnson Controls tried it, I don’t know. I think they did it also through partnering a little bit like Robert Sean did back in the day, but but and when you roll the tape forward, now we’ve got this capability now within systems integrators do all these things but but the systems integrators are still struggling with that same variability. And that is how do they maintain the expertise in house to do so many things that touch so many different systems, you brought up liability. That’s one big issue. But I mean, also, they’ve got to be profitable at what they do, or they don’t keep the lights turned off, you know. So so consequently, it’s a very big challenge today that building owners still have that vision of that central command and that, you know, launch control and heal Houston, Houston, we have a problem, you know, they got all these, these systems all tied together in one but the reality is, is that it’s very rare that you’ll find and right now, quite honestly, in the marketplace, most most large systems integrators have written recognize limitations and began to say we’d better get some partner and we better get some. We’re going to get some experts to come in that are there on the hook with us for expertise because there’s no way we could maintain this this stable of people that need it.

Ken Smyers  

We so right and then, you know, the fractional having 50 states and each state has their own ability to regulate and put standards into place and then you break it down into counties, municipalities, one of the worst things we tried to do was, you know, integrate early levels of the firing burglar, you know, the panel, right? Every every community had a different Fire Department somewhere volunteer somewhere paid anywhere near the metropolitan area, you have a whole different structure, you know, you have different income, you have different taxation. So you have monies that are available, so to make a product that can be globally distributed, you know, it was almost impossible. So like you said, you had to have a foundation, maybe in a city, and then, you know, you took her to major markets and then from there, it kind of evolved, but technology caught up. I remember the big thing about the front ends is you had to have a huge list in front end.

Leroy Walden  

Oh, yeah. Yeah.

Ken Smyers  

And who could afford you know, how many people were playing with that, that sort of investment, you know,

Leroy Walden  

the thing about it is it took so long for that process to work through the worked through the system. technology advanced. I know that Robert Shaw had four different generations of front ends being tested by UL simultaneously and by the time the first one got approved, it would have been obsolete. I mean, you know, it’s like, it just it took so long and still takes a long time because there’s a lot of arduous testing Vanessa go into it.

Eric Stromquist  

So so like you say, there are very few people that have the chops and the wherewithal and the financials to really support that and move that forward. So what I think you’re writing you know, we’ve we’ve had a term that bounced around can think where I think might have started called co competition, meaning that, you know, one day you might be competing with somebody The next day, you might be cooperating with them, right. And, you know, Kenny and I talked about one of the trends now given, you know, the advances in technology and it’s just hard to be all things to all people that it’s almost now is important as who you know, as to what you know, you kind of have to have both those because you can’t know everything so you need to know people that know No stuff. And

Unknown Speaker  

back in the day we have to send you have a big Rolodex, right. knows what a Rolodex is now right Oh, yeah, yeah, yeah, I think that’s a Trivial Pursuit.

Eric Stromquist  

It’s under 30 gets really well but he gets back to so you know, Kenny what was the guy’s name from Oklahoma the van or better we know Jeff helped I want to say the link spring guy here but you know he came up with a term right now what I want to see if this resonates with you as well but he says it’s almost we’re in the integrity economy right now. We’ve kind of couple you know, co competition you might be competing, competition competition, versus, you know, so it’s almost like, and again, this is for some of the younger people in this room and it’s like, you know, do what you say do say what you do, because your integrity is really what you what you trade on me because we’re going to be competing against somebody one day and then the next day, cooperating with them. You’ve got to play fair, you gotta, you gotta you gotta play Win Win almost. Right. So it’s, you know, it’s something we don’t talk about a lot, but it’s, it’s one of those ingredients that you know, is it factors in today’s market more so than ever, I think.

Leroy Walden  

Yeah. You know, one of the things that harking back to the DMS and Robert Shaw days and the gestation of tritium, one of the things that that that whole exercise taught us at Robert shell was the strength in partnering with the true true true market leaders. Yeah, you know, when we looked at who would we want to partner with, for lighting control, there’s no bigger no better no bigger no better than GB right and so so, so they’re so ubiquitous in the marketplace. When you look at new construction projects, how many of those were specified all GE switch gear, all GD distribution panels, all GE lighting fixtures, all GE automated lighting control, and in that world, it’s a little bit different the way the specifications are honored as it relates to HPC or Twitter. controls especially because typically the electrical product is purchased directly by the general contractor. In sometimes that term contract is directed by the owner as far as which product to acquire because what they do is, you know, there’s a lot to be done with spare parts and all this kind of stuff for electrical systems. And so that being said, GD had the inside track on a lot of nice projects the inside track because they were there when the specifications were written and they were there when the owner made the decision. This is going on these the light fixtures that we want, this is how we want them to make control. And so very quickly, I saw if I affiliated myself close with my Genie lighting partner in my market, I would be led into some really nice projects. And so consequently, a lot of times, I was brought in as the building automation expertise as a part of G’s team because God would say, Hey, we want some of that facility integrator stuff that you guys have to go on this project. We want this customer because they’re going to build not only one plan, they’re gonna build five plants here in Griffin, Georgia. And we want to make sure that all five of those plants have RGA product in it. But what better way to make that happen than to have them integrate the whole first building everything all together, and then they won’t make a move without both of us. that’s a that’s a great idea. Let’s do that.

Ken Smyers  

You know. And so now you tell us, I know we missed that. But somewhere.

Leroy Walden  

Yeah, basically, it’s, my son is in the industry about the time I retired four years ago. And so he’s really become quite infatuated with how projects are put together. How? I say Well said, well, Taylor, I’ll tell you one thing that you really need to start thinking about is how does it come to pass that you get the opportunity to quote that job in the first place? What were the decisions and one learns and twist made it possible for you to get that chance to sit down and price a job obviously, to get the job you got to price the job? But how did you think that somebody just all of a sudden download Install McKinney’s a job on parole share controls and Robert Shaw job though, it’s because of connections and those connections are based on people, those people relationships are based on successful projects in the past or that confidence or whatever. There’s many, many factors that go into it. So if you want to really spend time thinking about hard things and things that make a difference, think about how you get to the point to where now ready to price the job. And so so so I spent a fair amount of time digesting and dissecting that particular metric. And I learned really quickly that this Systems Integration business is all about relationship. It’s all about people.

Eric Stromquist  

It’s what you know, and who you know and what’s Taylor doing. Does he need a job?

Leroy Walden  

Exactly what exactly he’s working he’s working in the automation business over there.

Unknown Speaker  

He started off as a control systems installer apprentice and right now in front of some pretty nice

Eric Stromquist  

nice nice well he is with a great companies, you know, yeah.

Ken Smyers  

So I think to the the main buzzword that I keep thinking when you say was the active role versus the passive role so many so many businesses in the distribution world were set up where you had an exclusive territory and you were the you were the entity that people had to go through. So never the whole idea was to get your liquor license with one of these big control companies and then you would be the regional provider you know, and then you put a nice little inventory in there and then the phone rang and people came in they had to buy these these restricted products or these unique products from the authorized distributor and then then then the e commerce thing happened and everything else too so that the passive person and that distribution channel was a dead man walking you know, because you had to go active like you said you had to be more more the networking is a great thing. And the other thing too with the networking were used to network changed. They went from being ashtray and Boma to directly to the building owners. Control change, like you said earlier? I mean, the real players went directly to the high, high rolling really entities and work network with them,

Leroy Walden  

and still do and still do it. Yeah. You know, in today’s marketplace, we talked about small Smart Buildings and we talk about these your smart campuses and smart cities and those types of things, I can tell you that if you sit back passively and wait for those opportunities roll in your front door, so you can price them your way beyond the eight ball, you’re way behind the eight ball because, you know, every every building system, whether it’s lighting, whether it’s building automation, access controls, they’re all they’re all bespoke. They’re all very unique, very custom, every buildings a custom prototype, and and usually it starts with a desire a dream or a need within a property owner or it could be a property speculator, you know, a spec builder, whatever. But they have this idea and have this concept and then everybody starts filling in all the blanks as far as how is this going to look and you know, what, how high is going to be how wide is going to be how many windows and all this kind of stuff. Everything affects all the engineering decisions that go into it you know along the way. If you’re not involved in that early phase or or in the in the lead world is called a charrette. You know, we all get together and you say what are our goals and what our assets and what things that we want to do know something, if you’re not involved at that stage, a lot of these mega projects, then these large systems integration projects are really not going to fall in your lap. Unless you have someone that’s helping you lead the way in, for instance, if you have a great affiliation with access and security control company, and the building is, let’s say, a data center and that data center also in addition to high security because of whatever processes they’re running, they also have a honey for temperature control. If you have a strong relationship with that security control vendor who finds that lead turns over that rock and this project runs out of they can sweep you right in there and all of a sudden you’ve got tacit Salesforce or basically it extends your Salesforce beyond what the abilities that you have is your own company so so it is a it is a good goes around and those kind of things. And these larger integrations that are being envisioned nowadays they have to start where you’re involved

Ken Smyers  

in the mastery of the technology, I think to was that was a leverage player. In other words, the mature vendors enjoyed that same passive type thing, they get their share of any any major market, they can go in there and they could count on setting up a channel that gave them access to a certain percentage of that but now we’re seeing this this technology bubble up and these people that really understand the integration convergence of it and OT and the integrator took on or this this master systems integrator evolved into a person that was basically that that consultant at had the ear of the owner or the general contractor and whispered the technology and say, hey, look, you know, don’t let this happen at this point. If you do everything Beneath that, that that branch is going to be questionable. So we need to seize, you know, the approval and power of rejection and short integration. So that was another thing, because we saw a lot of people that were very good, probably more it favorable than OT favorable, but they because they understood it ultimately is going to come on a network and somebody was going to have to be the chairman of decisions, you know, and, and then cyber security. Now, again, we talked about liability risk, and we saw that bubble up to that this evolution that we started out at the very beginning with the the DSM 350. Now is, is it’s an extraordinary array of technologies, you know, so, and you’re right in the middle of that too, aren’t you?

Leroy Walden  

Yeah, I’m you know, since since my retirement from actively being involved in systems integration, I’ve been able to acquire some pretty interesting consultation, opportunities in the marketplace, serving some old customers and serving some new customers as well. And and one of the things that, you know, we have All different attitudes, the fact that cyber security is something that we all have to be actively engaged in. And one thing that really been encouraged since, you know, since my retirement it began before I retired. But since my retirement, what I’ve found is many of the property managers and property owners have amped up their game as it relates to their internal IT teams, to where they’re very proactive now and ensuring that there’s no loss of service and that there’s no you know, penetration. So the encouragement that I give to systems integrators that are the ones that are in the business probably already come to understand this, the ones that are entering the business now is take, take a look at that IT department within that customer you’re targeting and make sure that they’ve got the chops because ultimately it’s up to them to defend their own perimeter. And all you got to do is make sure you don’t mess it up. You stay within their boundaries, you stay within their boundaries, follow their guidelines, and dot all the i’s and cross all the T’s and your your cyber is going to be taken care of so so that’s a big change because when I was really good startup denied a platform we were the it you know infrastructure for the most part in a building. But with the proliferation of cloud based services on the RP side and some of the other things that a lot of these property managers they’ve had to become much more proactive in that realm and so consequently it’s it’s really really incumbent upon them more so than it is the building automation guys are the access control people to make sure that everything’s taken care of, as I say, so just make sure you don’t miss it up you know, just just stay in alignment with what they’re doing. And they’re going to guide you to the level of security and their appetite for risk and you know, from there you just follow along and just make sure the contract language gives you gives you an out you know, in case of some kind of intrusion

Eric Stromquist  

suspicions or you know, for what what I know about hi Rose is that, you know, a lot of your customers are owners, but I guess one of the suggestions or one of the concepts have you ever had a systems integrator, reach out to St. Louis, can you come in and look at our business? and and you know, help us sort of gear up or show us for a week show us where we’re strong. Is that something you wouldn’t entertain doing

Leroy Walden  

something? Yeah, I would entertain in in some respects, I have engaged and you know, I’m involved have been for the last three or four years with the real calm. Yep. obby con conference. And one thing that that does, it brings me in close proximity to a lot of the key systems integrators across the US. And so consequently, we kind of maybe, you know, impromptu have this roundtable discussion. Maybe it’s over a cocktail or maybe it’s just you know, sitting around the booth or whatever chatting it up. But we do have that and they do I do find them that they’re, they’re opening my head and picking my brain on things I don’t mind You know, I don’t mind sharing because it’s an industry that I’m very passionate about. So what I found is also have had some products and people with new products that they want to introduce or some products that they’ve had on the market and looking for some insight as to how can we make this more attractive to our potential target market or What other features can we fold in are those kinds of things. So I had the opportunity to do some of that, too.

Eric Stromquist  

So we’re going to make sure we have your contact information in the show notes. And we’ll give you a chance to shout that out when we let you know, I do know a rumor has it that we’re going to need to shift directions here a little bit. Rumor has it that you are actually in the running to be a reporter for one of the major networks like a fox, CNN, I know you can’t officially talk about it, but that you kind of agreed to share with our community today if we sort of gave you the opportunity to do a demo tape. So we agreed that we would sort of shift the gears midway through the interview and let you become the interviewee so you would have this to present to the folks at Fox.

Leroy Walden  

Yeah, that’s great, man. I appreciate that. You know,

this this new this new era, you know, I’ll get out I’ll get out of this opinions for hire gig and I’ll get into the actual Yeah.

Eric Stromquist  

detail with Leroy Walden. Right.

Leroy Walden  

Yeah, exactly. Really glad you all could be here with me today. And I’ve got on the line with me two of the most preeminent systems systems distributors that I’ve come across in our marketplace. And a couple of guys that just started off having fun, but really turned out to be quite a quite a new addition to to our industry into into buildings as a whole. So with that, I’ll introduce Eric Strom quest and Ken spires. And, guys, I appreciate you guys being here today. And I’m going to talk with a little bit about some of the things I think that kind of biting at the back of the mind of some of the integrators that you guys sell to and and definitely some of your clients and potential clients, the building owners and the building developers and so forth, that serve the market and serve these customers these great ideas so so I’ll just open it up just kind of as a general comment, I mean with you guys, I know you serve some large metropolitan areas, sell a lot of products, got a lot of great customers. I mean, I can just say just those ad nauseum the numbers of customers, but how is your Business overall, how are you guys faring out in this this growth economy that we seem to be experiencing?

Eric Stromquist  

Well, I, I’ll start with that, Kenny. I mean, our business is fantastic. And if you can’t try to make money in this market, man, you just, you don’t have the lights on or whatever. So it’s, it’s been great. I think that we’re probably going to see a slow down, Leroy but but I’ve noticed and I’ll ask you, and I’ll ask Kenny do it seems like we’re always a little bit out of phase with the slow down. In other words, economic slowdown happens. But because integrators have projects bill, it you know, we’re usually a quarter or two behind before we actually feel feel that pressure but right now business is great for us.

Ken Smyers  

I would answer that business is steady, but like we’ve kind of been talking offline is it’s not the same business. You gotta move. It’s a shift. And we used to work primarily with the marsh markets and municipalities, university schools and hospitals. And each one of those markets has taken on a different has changed because of all the different Universities used to be used to be our, probably the most constant customer, because they were constantly trying to provide that great user, student experience and whatever. But now with the competitions that they’re experiencing, some of the state schools and universities are just real slow. Hospital industry, I think is growing from the small med Express type urgent care facilities, the little ones. So that was something we had to learn quick and application get some contractors up to speed. So if you kept moving and you put new arrows in your quiver, like you’d mentioned, the new technology that’s available now you had to learn it and adopted or pass it, but you had to become a filter of the stuff so so I think the business is good, but it’s so changed that it doesn’t feel as good as it used to be. I mean, once upon a time, the distribution was was just an absolute, you know, great industry to be in it was like quiet WA did but it was just you know, it was just it was there, and now it’s a moving target. So I would say it’s good, but it’s a hostile it’s more of a hostile than it was before.

Leroy Walden  

Oh, that’s that’s really a Good inside because as as I know the Atlanta market very well. I know that a lot of it is built around commercial real estate and some multifamily and some multi use. But, you know, to hear your perspective as it relates to a totally different dynamic in the marketplace is pretty interesting because all I know is that Atlanta and Charlotte, Nashville and some of the southeastern cities predominantly are dominated by sky cranes right now, you know, it’s just it’s just unbelievable what’s going on. So so that that brings up a great point what what are some of the interesting trends that you’re seeing and the products that you’re selling? You kind of alluded to a little bit Kenny there and that comment about how it’s changing, but I mean, is it more transactional based sales? Are you seeing more system type sales and whatnot, things we can see?

Ken Smyers  

I think it’s clearly moved from a product orientation or product centric to solution centric. So yes, systems now is where we do you know, I think, folks like honey Well, Johnson and Snider electric eel they divided up the markets pretty much for the vertical integration and to the kind of the light commercial building solutions. Yeah, I drive down through the South there particularly Nashville I couldn’t believe how many crane stocks were there and did Lance I’m jealous. They’re coming to visit Eric I said, Man, you must be this is definitely a we’re tapping to where we are part of the rust belt, Pittsburgh and western Pennsylvania West Virginia had extraordinary good times back with the industry’s this primarily glass, you know, whatever. And now we transition to a white collar area where we’re doing a lot of medical stuff lot of universities know that says a lot of it’s more corporate now we’ve got Amazon’s building a million square foot, you know, fulfillment center. And so we’re getting that kind of opportunities, but like you said on that very appointment fact that you brought out if you weren’t in the management meetings, and wherever they happen in maybe Silicon Valley or whatever, we’re going to build it up someone. You were totally out of the picture so it lands in your area, and I You might catch some, some some business there, if they specify some of the sub con subsystems that might be favorable to you. But so the it’s just been a, you know, kind of an interesting thing where the markets that we’re focusing on now probably aren’t the big ones that you all see on your right, we’re probably going into that big as Mike Marston once said, it’s like a pyramid where the big buildings are the top of the triangle, but the real base of the triangle is where the markets are at that probably have the greatest growth. That’s what we’re orienting is we’re picking the product sets and solutions that kind of fit. Maybe that like commercial market, more so than the big, you know, the big building where you get an opportunity to build, you know, 700 VV, whatever, we’re probably looking at commercial stuff that’s probably in the, you know, 60 7080 zone range, you know, the source stuff, right. There’s, like Eric said, if you’re not trying, if you’re not able to succeed and make a living there, you’re not trying because you’re not not focusing because everybody needs help is one thing that we’ve determined absolutely, is that the market is Competition they just keeps growing I mean you don’t have to go take somebody else’s piece of the pie just need to have the the tools and the people to go build more the market.

Leroy Walden  

Everybody say

Eric Stromquist  

well we kind of we kind of are in both those markets so I kind of got a little bit different perspective our transactional business is still doing well. And but it’s you have to think about those as almost separate businesses right. So the transactional business is more about you know, having the product and also your platform we’ve invested a lot in the our online site because most that transactional business is you know, breaks down to people that want to order online. You know, there’s sort of a bit of a almost wants a misconception about price most of the most of our customers you know, we have a really good price that includes technical support all the stuff you need to be have a problem you’re taking care of. So we’re not is thought well maybe did the price sensitivity as some people are. Now will say for distributors that go the other outlet. Kenny saying where you’re creating the value add to add more systems. That’s where I think you’re always going to have a market because I think if you if you’re providing those services and systems and you know, support, you know, you develop that loyal clientele and you work together to do like you said, where, you know, maybe I bring you into the market, you bring the end of the next job or whatever, right. And I think that that’s where you’re going to be more less vulnerable, I think, than the transactional business. So I got one customer, and he’s just bulletproof against Amazon in he has two customers. And he goes, there actually is one customer. He goes there every morning, he finds out what they need. And he goes around town, he brings his stuff and he puts a 15% markup on it. And that’s it. They don’t care about the price, because it’s the service he developed. So, right now, growth is a different topic. I mean, I think as a distributor, you sort of have to decide if you’re going to be growth oriented or you’re going to be profit oriented. And a long time ago, we decided we were going to focus more on the profitability of the business and taking care of our core customers. Yeah, whereas before I Kenny said, it used to be a vendor come in and say, You got this piece of dirt, whatever we say you go, do you grow the business, we want these expectations. If you don’t make these meet these expectations, then you know, we’re going to take the product line away from you. And you know, that affected so many distributors for so long. But guess what, with the age of the internet, they cannot legally prevent people from selling into your territory. So that piece of dirt you quote unquote, own doesn’t really mean a whole lot, right? So we used to make business decisions based on how we’re going to make this manufacturer happy. And I think if you’re doing that still, you might want to reconsider, that you might want to reconsider was be profitable and take care of our customers. Because my goal my deal is whoever’s got the relationship with the customers is going to win. They make the rules, right. I

Leroy Walden  

you know, you bring up a great point, because a long time ago, a guy that you know, Eric, and you may know Kenny Gary sweat yeah what’s the Honeywell Honeywell distributor and I was I was really focused on the fact that you know through your through you through access to the product through strong with the company we are going to become the largest Honeywell exhale 5000 you know systems integrator in the marketplace and what I felt in some respects and Honeywell was not picking up there into the into the end of the pole you know, and helping us carry it slow because they were really far behind them some of the some of the emerging technologies that were coming out and being made available to us through distribution. And so I told Gary one Thomas I really kind of, you know, want to do everything that I can for Honeywell because you know, I really feel like that will get rewarded you know, ultimately long term and Gary just flat out and his old Alabama country yc we were what don’t ever give the Honeywell what Honeywell doesn’t deserve. And that rang in my ears and still to this day rings in my ears as the Absolute Truth coming straight from the mouth. The guy who I’m trying to convince I want to sell more of his stuff.

Eric Stromquist  

Ladies and gentlemen, please understand this is the Leroy Walden show here. Yeah, and and Canon Canon, I will not agree or disagree with legal your statement.

Ken Smyers  

I neither confirm nor deny.

Eric Stromquist  

Suffice it to say, it’s really difficult for the vendors now, right? Because, you know, you’ve got they’ve got so much competition, especially if you’re, you know, a Wall Street, you got so much pressure. So it’s like, how do you motivate a distributor? And, you know, it’s fear is not really going to work that well. Not anymore. I mean, because again, you can’t they legally cannot enforce their and I’m not a lawyer, so check with your lawyer. I’m but you know, it’s just like, my understanding is that you can say you can’t sell on somebody else’s territory and you can try to dissuade somebody, you could try to take the product line away from them. But the new reality is that you can’t really protect your distributors. So if you’re a manufacturer Now, how do you have the best product? Because you know, you got to have the best product, the best price support, and then you got something else on top of that. And then if you’re a manufacturer, and you’ve got a legacy product, like, you know, some, like the great company, Honeywell is and Johnson who from, you know, since the very beginning have built products and have products in the field that they continue to support. I mean, that’s a cost and and almost, maybe it’s not the right word, almost a disadvantage, at least competitive way to somebody who’s just coming into the marketplace now that doesn’t have the legacy products, right? Because they come up with the latest technology, they can design it. I mean, and I guarantee you that if you talk to the folks at any of these major companies, if they were just coming into the game today, they would design probably, you know, their product would be designed differently. They would be they would have more advantages. Yeah. So on one hand, go ahead.

Ken Smyers  

No, you’re so right. I mean, you hit the nail on the head and I just wanted to throw the glow ability of the products. Now the competition coming from all ends of the world. The world shrunk. Yes to be impossible. is now the reality is is that the biggest competitions are coming from

Leroy Walden  

frictionless. Yeah,

Ken Smyers  

yeah. So so that you’re getting this technology from Australia from from Malaysia you know, and we can name some manufacturer but the one that rings rings like you said Leroy the bell ring is the ZIO. And the concept of how to design a controller instead of taking your your your your footprint that was this big by this big and it was the size of you know, little bit smaller in a football and then you had to cram it with all this stuff. You don’t need to put a router in there and you put this in there and you put this in there and some sort of capacitors you know for backup and whatever. And reverse that concept and take the best router on the market and add IO to it and add stuff to it. It was like to me that was like that was a clear bell ringing that a lot of people doing that. Now you know next ring does that. They’re taking somebody’s best in class product with the latest and greatest dynamic speeds and processing capability and then they adding their their secret sauce to it and that whole concept to me was like an inside out you know?

Eric Stromquist  

Yeah, yeah. The analogy I would use and again you know mad props you know again I have a lot of respect and empathy for some of the major manufacturers honey will be in one Johnson being another because you know i you know i know those guys personally they’re all good guys and good guys and good girls men it’s a little bit like we’re all gonna go run a marathon and they look at the guy from Johnson honey one go Okay, here’s your legacy product forgot 100 pound weight go have at it. Right so I don’t want to say it’s unfair because you know, they’re still make revenue off of that right. But you know, this is one of the new realities that when you come to the market and you know it, Mike Marston EZIO 1015 years bad they’re going to face that right because you’re gonna have more product on the market

Leroy Walden  

is experiencing the same thing because how many instances of our two are still out there still trucking along right there in there in dire need of upgrade, you know, right. tons of them, right. And so so so you’re right yo time has a way of kind of equalizing liberalizing everything. And again, you point out the fact you know, Honeywell, see the old guys, you know, semen. Johnson Controls me. Yeah, they got some they got some old products that are still out there not one thing just won’t die.

Eric Stromquist  

Yeah. And they’re supportive, unlike windows who Kenny tells me no longer support. Support anymore. You know, I have yet to hear one of these major manufacturers ever say we’re not going to support that anymore. So you know, they’re being treated their products. And for that, I think we need to, you know, tip a hat to them for that.

Leroy Walden  

Oh, yeah, no doubt. I mean, it’s a it’s a hard thing they’re setting out to do so. But what’s interesting is, and one of the questions I had kind of envisioned was, you know, how your manufacturer responding and, you know, to these buying trends that you guys are seeing, and I mean, it seems like the pretty well answered that I mean, essentially, they’re all adapting their products and they’re adapting their distribution models and how to market strategies and those kinds of things. Just to try to keep up with all these upstart, you know, competitors, and showing You know a good friend of mine just showed me on Amazon where you could buy 15 IO controller for 130 bucks you know it’s not a hell of crap it’s all IB serves up a web page. Oh my gosh you know it’s it’s astounding the products that are showing up you know so unusual your some unusual locations and unusual

Ken Smyers  

you said to me one time too because we were talking about that at a trade show even real con last one and you said that you’ll be doggone if you’ll be somebody science experiment or science science. They didn’t have deep enough pockets to handle a couple generations of the product you know, it’s really not time yet. It’s not It’s not right yet.

Leroy Walden  

It would be something I wouldn’t mind putting to say in my, in my workshop or something you know, here outside or something I’m doing as a family or whatever, but yeah, Christmas lights. Everything that I had to go back on

Eric Stromquist  

You know, but you’re You guys are so right. And I want to stay on this question for a minute because what you didn’t ask is what could they be doing differently than they’re not now. But before I get

Ken Smyers  

there,

Eric Stromquist  

I think the one thing that I would encourage our audience distributors, integrators user, we talked about this being the integrity economy and part of the value we bring as a consultant to is it blue or Walden says this system is going to work. They’re taking your word for that if Kant’s Myers, Eric Trump was says, this is going to work, then they take your word for it. Okay, so we’re trading on integrity, and my customers count on me for that just as yours guys do, too. So the one thing that manufacturers have to do is make sure your product is rock solid because it’s my reputation your trading on as well as yours. If there’s an issue, you know, stand behind it, and everybody we’ve mentioned stands behind, right so so so I think that’s a that’s a key piece. My dad used to have a saying that trouble costs more than a better price or whatever. So there’s that. But if it gets down to it, Leroy and I’m going to ask you and I asked Kenny this because we’ve talked about this, if you don’t have a great product, you’re not in the game. You’re just not in the game. You’re not even part of the conversation. If you don’t have good customer support, good tech support, you’re not in the conversation. If you don’t have competitive pricing, you’re not in the conversation and virtually everybody that we deal with on a day to day basis as well as you and Kenny, they have all that so what’s the differentiator what makes it different Okay, and I say that one of the key pieces is marketing now is more important than ever. How much easier is your job Leroy but if you go to one of these meetings and owner goes hey, you know I saw this video that Brand X put out and I saw this paper this makes so much sense to me. I understand this Lou, what what do you think about this product and it was something you know about they they’ve done that for you. And part of what we’re all balanced and battling against this the time and attention thing nobody has Time to really do the research. So how can you as a marketer, capture somebody’s attention had generate a buzz so they were getting calls as distributors your integrators are getting calls you’re getting calls can What can you tell me about this product right now? And I mean, look at nest. I mean, nest is a great example of a company that did that. I mean, Kenny I did everything we could derail NASA, you know, and there was just no,

Ken Smyers  

neither confirm nor deny that.

Eric Stromquist  

But not just talking about but they created the buzz I mean, they came in zero thermostat, they had a different look different field the way they market it, there was a buzz. I mean, how many people are asking about well, he hadn’t all Nast? Can we get a nest thermostat for you? They changed the game. So it’s not an easy task. But that’s some of you know, which of you can do something to pull business through the channel. That’s going to be more for your product than anything else. In my humble opinion.

Leroy Walden  

Yeah, yeah. Well, I noticed that you flipped the term, flip the table back on me and became the interviewer again, but that’s okay. I’ll answer that I’ll answer that. because quite honestly, the manufacturers are in a, like an arms race where they try to cram as many features and yet all these new features and all these new things and these new tricks, and Hey, what’s this thing a little backflip and all this kind of stuff. The challenge, though is, is that it’s very difficult for the integrator and the guy who’s actually doing the work is difficult for them to keep his people up to speed on these latest features. And so, you know, my feeling about it is that Yeah, we do want to see a marches, growth in technology, but same token, we’d rather see these features more fully fleshed out before they’re actually rolled out. because quite honestly, sometimes it’s the answer to the question. Nobody asked, you got this new thing that it can do, but you may have one 100th of 1% of the market that my want that and you spent untold thousands and thousands of hours developing that capability and build it into a product. It’s getting released that may nullify product that an integrator was so dependent upon, because now that’s the old and they want this new to go out into the marketplace. And all of a sudden, you’ve got an integrator, just like what do I do with this? You know, how do I get? How do I get there? So, so the one thing that I would like to see is a little, say, sanity injected into some of the product development channels and product development streams that are coming from product proprietary front from from many of the manufacturers, and I’m talking about some of the foreign manufacturers as well as some of the some of the larger manufacturer or some of the third tier manufacturers of all those little Santi please Because ultimately, somebody’s got to put this thing in until it is not a toaster. You know, you got to get the thing up and get it running. You know.

Unknown Speaker  

Challenge

Eric Stromquist  

Lou or your dad that’s on a Kenny, what kind of computer you’re on right now. already know, but just our audience

Ken Smyers  

of HP and Dell.

Eric Stromquist  

Okay, so your windows basically Well, you and I are both on Mac. That’s right. Here’s the example. Leroy and I probably paid at least 60% more for our computers in your guarantee your computer has many many more features than ours does. But ours just works right this got that hit thing is

Ken Smyers  

you know so your cameras but and that’s why you look so good old time

Leroy Walden  

but he’s got the big microphone to

Eric Stromquist  

know what I’m saying is to leave boys planet I think there’s something to that is you know Steve Jobs was you know, notorious for de featuring products and charging more for it. But it got back to the fact that the max just work and I mean, I might I might put poking holes at windows but Kenny Okay, anybody we have somebody come on our show that’s using a Windows computer. We have to spend 510 15 minutes talk them through getting set up. You come up with the makki it just works. So I mean, do you

Ken Smyers  

think I agree. But there’s a couple things that you know, we this is an amazing conversation. I love it. The right and going back to the question about the vendors and what’s going down is there’s a probably an updated construct on the way the buildings the interior buildings work and it Now so user interface user experience based, you know, things that company or have driven manufacturers to respond to, you can’t build something to make people buy it, you got to find out what people want and what’s going on in the world, like the IP controllers that are coming out are extraordinary because they’re faster the better and and then the, you know, apps guy named Scott Cochran says, you know, you guys keep they get to your point where things you wanted to integrate, but who’s going to do the integration? It’s not that easy. in many regards, it was just a misguided inquiry for somebody. Have you ever integrated Otis elevators? And you know, can you give me any help here, and people just think that because we claim we can integrate with everything and the master systems integrators have had successful projects. The people in very probably high percentage do not have that experience and don’t have a place to get it easily. But yet, it’s expected. So the end user is expecting all these these bells and whistles that they take from their residence. They go into rock sec a thermostat in the wall. We were in a meeting the other day and honest to God, you had to be seven things on the wall. We didn’t manufacture sensors, there was a co sensor, there was a lighting occupancy sensor, and you know, and then and then you got people putting one sensor up from the ballast, and it has eight sensors in it. And so if to get there, it’s not magic, you know, but but it’s, it’s desired now. So I think the advent of the IP controller itself was like a major thrust of some people lead the league in it, you know, just tech EZIO and, and Siemens. Now honey was got theirs, but we’re going to see this MST thing like a lawn back that thing we’re launching back that would have 5050. And, you know, depends if it was the Army Corps of Engineers. It was long if it was GSA was back net. What’s your thoughts on that? We’re seeing if we feel it already, that there’s a predominant preference for IP versus MSRP. You see that so the protocols

Leroy Walden  

are easy, and the reasons are varied. Number one, the cabling is A lot less stringent you know basically it’s point to point you know, in some instances people doing daisy chain or ring topology or those types of things but basically they’re using pre terminated cat five cables which you can buy dirt cheap nowadays and so the technique that used to be required of pulling out and string in STP twisted pair and make sure you had the terminations in the right spot you had no stars no rings and all that stuff that’s pretty well gone away I mean basically you take care of you take care of a physical problem by going with these pre terminated in some instances cables plus the fact that the ability to terminate cat five cable has become so lyst scientific used to be it was a backroom you had to have a little you know tat and some tape around you you know to be able to terminate a cat five cable It was so so such a pain in the rear end but nowadays it’s almost cut paste where you just cut the wire, put the connector on pulling flip, you’re done. Yeah, so everybody now is a perfect RT cable guy, you know, so so so that’s one big thing is is that it’s becoming expected, I think it also has become has come from the fact that that a lot of the people entering the marketplace from a technician perspective are more comfortable with cat five cable and they’re not they don’t understand the idea of a multi, you know MSRP type, token passing, twisted pair network that’s so foreign to anything except what we grew up with in the building animation industry. So that’s when Nikki, but you got to talk about the speed you have to talk about security, you have to talk about the simplicity and programming. You know, when you have a back net in device that’s connected by MSRP. Every point available on that controller is infinitely available for any application that you want to write. You don’t have to go through a router, you don’t have to go through BB MD. You don’t have to make all these special considerations. It’s all right there. It’s all the flat network. And so essentially every point that’s available to the system, whether it be CFM flow rate, whether it be numbers of cycles of heater and a terminal unit, whether it be you know, and pass it a compressor in some critical chiller, it’s all available to us so you can actually begin to use it so, so there’s so much good that’s come from that can come from it is coming from the IP connected controllers where, you know, it is the next thing is the next thing and with the price going down, you know, I mean, routers are becoming so inexpensive. Some new topology technologies have been released back nets done a whole lot to mature their, their IP technology and their IP protocols. So, so the markets definitely marching in that direction. And I don’t think now without thinking that wave is going to crash on the shore. In fact, it already has shown I think it’s just going to continue to to set the pace for what comes what comes next.

Eric Stromquist  

Very cool. You got to take your take your show back over.

Leroy Walden  

Yeah, right. You guys appreciate the sidebar. Yeah.

Unknown Speaker  

We’ll talk to our producer To make sure they edited appropriately, so

Eric Stromquist  

your producers are not gonna allow us to come back on your show.

Leroy Walden  

Yeah, so So talk about talk about your innovators and I, we’ve talked a lot about product, but you know, you guys live and breathe on your integrators, the guys who are actually standing at your counters are making the phone calls or picking up their, their internet devices and sending orders to you. Are you seeing the number growth and number of integrators and what can you talk a little bit about how your markets are responding, or the integrators becoming more prolific, less prolific? Do you see any consolidations among your integrator swap when you click and say about that?

Eric Stromquist  

Can you want to start with that one?

Ken Smyers  

Sure. Sure. I think we were saying that the data is the new gold, right? Well, I think the integrators that we have are precious and gaining value. Because the scarcity ism is becoming resident. We now know that we don’t have enough. We don’t have enough talent. We do not have every single major integrator that has, you know, maybe four or five Five certified people and above are looking for people, they can take on more business more, they don’t have bandwidth internally. So we’re seeing some some some interesting evolutions going on. I know, one of the things that Honeywell did with the global engineering services was to bring some some engineering centric capabilities from around the world, make it available through through programs, and it’s being refined, that that’s going to be going to help solve some of our problems. But right now, to be honest with you, the way we have 12 probably 14, integrators that are really good to go to guys and more in their business. And they are just saturated. We we get referrals all the time, because it’s just the Unfortunately, we don’t have enough people coming out, they just they can’t cookie cutter these types of people because it’s such a hybrid education experience where you know, you get involved with some of the journeymen go through the trades. And you know, they get their experience firsthand with equipment from there, they evolve into, you know, networks and whatever. And that, that’s a But steady process, so they’re doing good. Some of the technical schools and some of the universities that are putting people like they come out heavy ended on it, which is really good. But then they really can’t become functional unless they work alongside somebody from many years sometimes. And there’s a couple of folks that are just they self teach themselves like you probably didn’t, Eric did many ways. You didn’t, you weren’t told what you know that it’s eight o’clock in the morning, someone start training and then at five o’clock, I’m gonna punch out. It was like it was like an experience where you invested every chance you get to, you know, learn this thing and become a master. That type of persona is not this not readily the the people that we have coming into our industry so that right now we’re challenged, to be honest, when we have great integrators and they’re doing great work and we live and die by our integrators and something about this distribution. You were mentioned about your market, different markets and product marketing, where you’re you’re doing a lot of after market replacements, OEM It breaks down into exactly what they need you taken from the 1000 generation to the 2000. So you can move on to the legacy stuff, that business is kind of waiting to the we live with contractors, we actually find ourselves being kind of a contractor based business where if our contractors aren’t successful, we aren’t. integrators are extremely successful, and they’re holding us they’re keeping us in the game. And we could grow that.

Eric Stromquist  

I would concur with Ken said, everything you said. And I think I’m not necessarily saying on new, a number of new integrators that are showing up. I’m seeing, you know, integrators are more dependent on us with all this new technology just sort of be their filter. And, you know, a lot of times we’ll have some of our integrators who somehow contact them directly. That’s a cop you know, call Strom quest. If they like it, then we’ll we’ll take a look at it. What one term we are seeing, which is kind of interesting. I think it probably is happening primarily because what Ken said they just don’t get more business they can deal with. We’re seeing more people that have been set up factory direct wanting to come through two steps. distribution. And basically because they don’t have to deal with the sales reports and all the you know, all that stuff, they don’t have to do with paying the bills, we give them a little bit more flexibility with the credit terms. And then the big thing that we’re trying to do is to try to sort of be that Salesforce forum where we can bring leads, and because if you think about most integrators, I mean, there are exceptions, McKinney’s being one of medtech being another one where, you know, they’re really great in any rating, but sales is a really expensive part of our deal. So if if a distributor like Strom quest can go in and help generate leads are going with their people and help sell the job that offloads a huge cost for them. And none of them have time to fill out, you know, market reports and you know, you’re going to meet your quota none of them what quotas anymore they just don’t have time for that nonsense. So the trend we’re seeing is it more people that were, you know, seeing the benefits of going direct to a manufacturer, being the direct guy or girl are now coming to two to two step distribution and letting us take care of a lot of that. stuff that they had to deal with in the past.

Leroy Walden  

One of the interesting things that I experienced is, is that a lot of the integrators, you know, I was involved in that business association, the inside IQ, right in my in my final years, and that was an alliance of 55 or so systems integrators across the US and European and Canadian markets. And what was interesting about that is that one by one, little by little, we began to see our integrators being gobbled up by these these consolidators and basically, you know, take that market by buying that contractor. In some instances, it was welcomed by the contractor, in some instances, maybe they were, they felt like if they didn’t do that their market penetration would be would be impacted. So are you guys seeing that kind of activity in your marketplaces where some of these, some of these integrators do become too dependent upon or gobbled up by let’s say, the comfort systems or the Yeah, or the M course and that’s got

Eric Stromquist  

things we’ve seen some in the in the Atlanta market. I haven’t seen Any recently, but we’re also seeing that trend with this distributors as well, you know, bigger companies gobbling distributors up. So I think that consolidation is, you know, it’s been around for a while I haven’t seen an increase in it necessarily. But what about you, Kenny?

Ken Smyers  

Well, I think you’re right. But when they gobble up this distributor, a big distributor golf gobbles up a little bit of they’re getting those contractors, that’s how they’re getting access to those systems integrators through their distributor relationships there, and the particular lines that they sell, but yeah, the integrators that have gone on their own and really, truly invested and they’re there. They’re being offered all the time. We we don’t let our people go to national trade shows anymore because of the event that they talked to so and so and the guy doubles the bar, and then he doesn’t come back to Pittsburgh, we feel that pain, you know, but so there’s there’s there’s a scarcity. And there’s a true story where one company one this guy so bad they bought his house because he said I’ll never be able to sell my house or whatever will be lost. They took care of me from me. I bought his house bought him a new house,

Unknown Speaker  

couldn’t say no.

Ken Smyers  

You guys, I just I gotta go I see it. But he’s living in the city now he was a country boy. And

Leroy Walden  

I could imagine that those those rollers could have an impact on you guys business because in a lot of respects those they thrive on national buying agreements, where, you know, comfort systems may do a big bottle of control battle. So they may do a big buy of wire and, you know, whatever. And they have a central distribution point where they distribute that out to all their integrators. So I can see where that could become a disruptor for you guys in your, in your local markets, if you begin to see a trend and those integrators being being gobbled up so, so So, let’s switch gears a little bit. You know, the big thing that we all talked about back in the day was, you know, the factory offices, were getting all the big jobs. You know, if you’ve got a new big job and new headquarters coming into town, we pretty well feel like that. The big factory office had the inside track was able to acquire business? Are you seeing a lot of growth? Are you seeing any activity at all within the factory offices? I’m talking about the Honeywell offices and Siemens office. And I know that there’s very few factory offices it left in Atlanta. What does the Johnson Controls officer? As a general statement, you guys seeing a lot of growth or acquisition of market share by your by your factory offices?

Eric Stromquist  

I’ll start with that one, Kenny, not so much Lee Roy, we’re seeing some of them that are trying to go in and get service agreements with jobs that we sold through some of our integrators. So, which would indicate to me that this might be kind of scarce. I will preface it by saying I don’t directly know I’m not seeing as much activity from them. I think they’re still out there. But I think it gets back to the owners are a lot more savvy. Now. They have a lot more choices and and you know, maybe they could buy a job. But you know, having that independence where you can work with independent people, I think Most of the owners have gotten pretty savvy to that.

Ken Smyers  

I would say they’re, they’re handling our markets. It’s waning, they’re not as they’re not as successful as they used to be because of the options because like you said earlier about Nagra, and having the open systems proprietary days are doomed, except for the big stuff, you know, like maybe the hospitals are the people that want a single throat to choke. And they have a vertical integration of got your critical environment areas, you know, in hospitals in particular, the big guys still do well, Siemens, and they still doing holding their own Honeywell, like Eric said, they, they pick the ones they want, they just come in and do some kind of overwhelming, you know, opportunity for the user the large use of the hospitals particularly, and so they see them around but the new stuff. No, it’s it’s, it’s it’s like the words out see, I think the associations and the events like real calm, I become educated these people they have these knowledge wells that they can go online to and access You know, the business case studies, you know, and understand that, you know, the do’s and don’ts are much more universally broadcasted. And if you like Eric said about integrity economy, if once somebody gets involved in a proprietary relationship and has a bad experience and realizes that they’re kind of painted into a corner, if the savings of having one person take care of their security, life safety, whatever, if it doesn’t, doesn’t, you know, come together in a business case. And that’s probably the last time they do that, or Yeah, and so we’re seeing that again to the marks we don’t have a whole lot of big big buildings here. I think we have one crane right now in downtown Pittsburgh, and there’s a lot of growth in the smaller suburb areas was a lot of strip malls. There’s a lot of houses going up but not not the fracking is real big right now. We’ve got a huge shell fracking plant that’s coming to completion that’s really put a boost into and so so that kind of growth is there, but it’s not it’s not the we don’t have a whole I think that the branches can can can chew on here. I gotcha.

Leroy Walden  

I gotcha, gotcha. Yeah. It’s kind of interesting in this is just from my observations, being in the marketplace here, helping a few clients with some new projects or specifying those types of things. When we did, we did a pre interview. As far as qualifying bitters, we actually invited one of the branch offices in. And while they came with some competent people, while we didn’t see was a lot of depth, and that skill that went below, you know, let’s say their Director of Engineering and those kinds of things, and when it comes down to it, it’s that lead technician, that lead programmer, and those kind of things and actually become the face of the product during the implementation of a project. And, you know, they don’t hold that into any secret sauce as far as acquiring talent, you know, basically in a given marketplace, all those offices still, you know, fight for the same talent pool. And if they’re not doing anything, if they’re not making any investments in creating growth in that talent pool, they’re going to be suffering the same as everybody else. And so so one thing that you know, one thing that always depended on was Johnson Controls always good for hire and a lot of new people and bring them into the industry. That’s gone. Amazing. nobody’s doing

Ken Smyers  

it to your point, I went to a branch, and I’m not gonna say which one and I was shocked. It was it was one third populated and it looked like look like a ghost town. Yeah. And then I went to a contractor that we integrator, he had deleted 15 and for certified technicians on staff and yeah, they had their own graphics department had the point. I mean, they just it was like, it was it was the branch. In fact, it reminded me the old days of branch so I saw that was in a unique transition of, you know, power so to speak. They were more competent than branches. I thought in many regards. So

Eric Stromquist  

Kenny, I hate to interrupt, but we’ve been going about an hour and 40 minutes, guys, so we’re going to just begin to think yes, 10 right. So so so I got I got one more

Leroy Walden  

question, Mr. commenter. One more question is my right. So I just want you guys this is this is the opportunity for you to really tell our audience about your businesses and what really differentiates you in your marketplace. And you know, that marketplace definition can be local, it could be global, or it can be any anything in between. So whoever wants to start off just say what differentiates your company from from your competitors or from your good,

Ken Smyers  

good first, good chance to think about that?

Eric Stromquist  

No, I think for us, it’s been probably our corporate philosophy. My dad started the company and you know, we take care of our people, we take care of our we take care of our employees so that they can take care of our customers and our company, you know, we get fired for two things on the spot. If you ever, deliberately or knowingly ask a customer do something it’s not in their best interest, you’re gone. Have you ever worry about anything you’re gone past that, you know, their mission is to take great care of our customers who want to have the best products would have good competitive pricing. But we want to build a back it up. We’ve been around for 60 years and you know God Willing we’ll be around for another 60 or more

Ken Smyers  

it’s cool cool. I got a kick out of you saying global because I consider Canada Mexico that’s the international sale

Unknown Speaker  

Absolutely.

Ken Smyers  

When we get an order from there and we buy in Texas from Spain and we get some stuff from Egypt, Malaysia so we get some news for now. I’m kind of kidding. But no, we had we emanated are basically came from a family business and much the Eric’s we got commented that our my grandfather and Eric’s Father, you go back in the 3040 5060 years. We have my grandfather is a he passed away of course, but he’s got a card from 1927 Honeywell regulators we have that framed in my brother’s building, but the the background of the control industry, Eric and I used to write some spoofs about you know, how before ups read and before all these interests You know, things to make just in time inventories, make sense, whatever. We used to use Greyhound buses to take stuff and go up the Greyhound bus and you could buy a little square, a little black square, and you put your box on there. And they took it to Cleveland or wherever it was. But you know, we did a lot of work with the still. And to see where we came now. I think one thing we had was was a legacy of the business and other we knew the starts and stops the beginning. And so we went through the nomadic phases, like you said, and the relays and the first versions. And now I think what we still do to Eric’s point is we filter for our we provide a service that’s more of a talkie type of service and actually selling boxes, like like Eric’s company, does, we, we lost a lot of local business, how we get helps in our backyard. And they just Canvas everybody so yeah, they think the products in the markups or everything it’s kind of distribution in many ways has has the commoditization of so many products has taken us to come up with new ways to be relevant. And a lot of it is attendance, we bring the intelligence that’s out there in the world in general, and certainly in North America, and we bring it to our area, or western Pennsylvania and West Virginia areas and give our contractors the benefit of what’s going on with technology. And we get calls all the time, where they’ve got choices of A, B, and C, what do we do? We’ve created that modularity, we just get foot in the door, just put the Jason the door are in the building. And then from there, we can start growing your upsell the different networks, bring the lighting and do this to indoor air quality, you know, so we’re helping the educational processes where we spend a lot of time taking people and working in a consultant fashion and still be able to sell anything that they want to buy, whether it’s a valve or actually or whatever, but helping them sell the job like Eric was saying, Get to the customer or get to the end user, the school district go to a board meeting and explain to them how you know the 330 300 Well, I’ve done that like maybe six times and every time I say it, the people were like Man, that’s really cool. I never heard that before I’m taking. I took that CB Richard Ellis. It’s not going to be Ken’s Mars but but see that, that that’s playing a role. So on a lower level than what you guys do on a national level we do locally. And I think that’s a very important aspect that builds the trust, and then confidence and then and still have access to all the controls. So we still do still provide the wholesale district distributor function, but not with a commodity items like we used to. And then we get to pick we can really influence the user, the end user and the contractor. So it’s kind of a mixed, you know, delivery of solutions.

Leroy Walden  

Yeah, I agree. Yeah, the one thing that is really interesting here, you guys comments that I support everything you’re saying because obviously your companies are of high integrity because otherwise you wouldn’t be successful in the markets that you have. But one thing that neither one of you brought up was what we’re talking here, the ControlTrends, the ControlTrends community that you guys created. I know that it was It may have been something that you thought would be a good a good marketing tool to talk about your companies and you know, generate some interest in the industry but I hope that you recognize that you’ve become a foundational facet of the industry because he talked about an integrity based acquisition you know, people feel good when they come in here you guys talk about some of the products I hear you guys talk about some of the solutions that you guys kind of maybe in some cases poo poo on some products or technologies but also you know, your thought provoking in your approach and in this industry so hats off to you because you know, when I began in the industry nothing like this existed and with what you know, automated buildings calm brought in the beginning and you guys really just amped to a new level with your with your video blog and your and your radio, podcast, you know, it’s just been it’s just been phenomenal. So, so my hats off to you guys. Hopefully you recognize that this is a big part of that bond of trust that exists now. Not only between you and your integrators, but also between the integrators, customers and their customers, the ones who actually are looking to bring solutions and products that are leading edge and cutting edge and helping define what cutting edge is. So hats off to you. So

Eric Stromquist  

thank you so much, buddy. Well, blue boy, I just got to tell you, the fox doesn’t give you the higher we’d love to have you be on. You’ve got a job with us.

Leroy Walden  

Okay.

Eric Stromquist  

Thank you did great. That’s the best I’ve ever been interviewed. Yeah, appreciate

Leroy Walden  

that big check. These just sent me yesterday. So I’m in good shape. Yeah, you are. You’re in great shape.

Eric Stromquist  

Integrity, we’re not about paying for praise.

Ken Smyers  

Certainly nice. Thank you. Well, you enjoy doing Yeah. Did Eric ever tell you how this all got started in Las Vegas.

Eric Stromquist  

Okay, go ahead. I just think I’m gonna have to cut it out

Ken Smyers  

real quick. I’m gonna just say take one minute. All right. I’m going to tritium summit in Las Vegas, and I’m on my way to one of the breakouts and I was run a little bit late and I’m scrolling down the hallway there and Eric sitting there on the chair and he goes, Hey, come here, I will talk to you, and they would have taught me to play hooky. Something, you know, umbrella, and then we were talking about ControlTrends and it was 2012. And that was, that was the inception point of a bow.

Eric Stromquist  

As long as we’re truth telling here, because Kenny was writing and you know, he hadn’t he had written in a while I said, watch you write a blog on the post, because I can I’m in a family business. So look, I got an idea. Copy Borg anonymously. He goes, What do you mean he goes, have you baguettes Clint, and you I want you to a column called the good the bad, the ugly and we’ll have a picture of Clint Eastwood there. So he

Ken Smyers  

said that the Statue of Liberty

Eric Stromquist  

Bye bye, buddy. But if you if you’ve listened this whole interview, you deserve to know this. This is but you so but I would get calls from vendors that be so pissed off and they go Who is this guy said I have to protect my sources I cannot.

Ken Smyers  

I can neither confirm or deny that.

Eric Stromquist  

And I said he might just be working for your company. So maybe I should

Leroy Walden  

not have a source. anonymous source of that.

Eric Stromquist  

That’s how we get started with the good, the bad and the ugly. And we were How do people get ahold of you? Leroy Walden at Hi, Rose consultants.com. Man, this has been so much fun. We were Thank you so much. And I’m serious, man, if you want to, you want to come on in and do your own your own gig and have an interview show will promote it on ControlTrends Hey, you know, I’m open for anything that will help promote the industry. I love the industry and I love the people in it. So really what you’ve done, you did a great, thanks for this. We appreciate you the industry. Appreciate you, man. Have a great rest of the day. And thank you so much. Fantastic.

Unknown Speaker  

Sit back. Thanks. Thanks.

Eric Stromquist  

I Kenny man. Great stuff and we were Walden man really enjoyed that. And we’ll see you next week. We won’t have quite as long as show next week. But willows very

Ken Smyers  

impressive I tell you what, we always want to get the history right legally sure set those those beginning years ago wow

Eric Stromquist  

yeah he started nice and question Have we all been around for a long time I look Kenny and I don’t look like it. We have we’re really old guys but we just were old guys stuck in young guys bodies How about you go? Nobody’s too high there you go that’s another week of control talk now you’re smart buildings video cast and podcasts. I get a special thanks to our guests Leroy Walden. Remember the nomination process to start to remember to vote and we will see you next week. Until then, remember, be bold, stay in control, stay relevant and thinking oh god for being old and surviving.

Ken Smyers  

Indeed.

Eric Stromquist  

Indeed. old guy Kenny spires.

Ken Smyers  

Here we go.

Eric Stromquist  

We got it done, buddy. Th