Is There Gold at the End of the Building Automation Rainbow?

Security systems integrators have posed the question many times, to mixed response: Is there gold at the end of the building automation rainbow? Now, we all know that many of the larger conglomerates in the security and building automation world...


Security systems integrators have posed the question many times, to mixed response: Is there gold at the end of the building automation rainbow?

Now, we all know that many of the larger conglomerates in the security and building automation world, like Siemens, Johnson Controls and Honeywell, have made a lot of money by offering their customers a one-stop deal for all their systems integration needs. But what of the rest of the market? Is there a place for the independent security systems integrator to be successful in building automation systems integration?

The answer is a resounding "Yes" for those strong, enterprising companies with the stamina, talent and flexibility to handle the rough and tumble of the BAS market.

The State of the Market
In order to get a true perspective of the opportunity, we need to examine the current state of the security systems integration market. It has grown from $1.6 billion in 1999 to $4.2 billion in 2003 (SDM 100). This market has boomed in many areas, but in general has been affected by the economy as much as any other support industry. In many cases the larger systems integrators have got a lion's share of the market, leaving only crumbs for the independent companies.

The market has also become more crowded with merger and acquisition activity. Many of our large, established companies have been swallowed up by even larger companies. Manufacturers especially have seen fit to preserve their market share by the acquisition of installation and integration organizations.

One of the greatest limitations of security systems integrators is their own mindset. Many of them build imaginary fences around their little worlds and never look beyond them, and this often develops into an anxiety about entering further into the applied technology arena. This severely limits the available market growth in allied areas.

But with all the movement in the marketplace, the opportunities for forward-thinking, ambitious, independent security systems integrators have never been better, for many of them have developed unique skills and carved out very profitable niche markets. The savvy ones looking at the state of the market know that the only way to compete is to develop an increasing focus on adding value to their market proposition. It is no longer good enough to just offer the lowest price or to say, "We have excellence in service." Rather, integrators need to be able to offer customers a compelling reason to do business with them. The value proposition must include all the elements that make it easy for the security director/buyer to present to his management for approval.

That is where the opportunity with building automation systems integration comes into play, for now the decision maker is at least one notch and as many as three notches up the corporate ladder. The decision maker for building automation is the facility director, who typically looks after the entire facility?HVAC, lighting, energy and security?and works directly for the CEO.

What Is a Building Automation System?
Before expanding into the world of building automation, it is important to have a clear understanding of what makes the BAS market successful.

Building automation includes the control and monitoring of the following systems:
o HVAC system (heating, ventilation and air-conditioning), BUT NOT the HVAC equipment, which is designed by the mechanical engineer and installed by the mechanical contractor.
o Lighting control system, BUT NOT the actual lighting system, which is designed by the electrical engineer and installed by the electrical contractor.
o Energy management system, BUT NOT the actual electrical switchgear contained in the energy management system, which is designed by the electrical engineer and installed by the electrical contractor, often with heavy involvement from energy management personnel.
o Standby power generation system, BUT NOT the actual Gen-Set part of the standby power generation system, which the electrical engineer designs and which is installed by the electrical contractor, often with heavy involvement from the energy management personnel.

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