Today, industry consolidation has resulted in a small group of dominant suppliers: Honeywell, Johnson, Schneider, and Siemens, depending on how you add up the numbers and where you draw the line. They are followed by other important suppliers including: ALC/Carrier, Delta, Distech, KMC, Reliable, and Trane (and our apologies to any of the others not listed). Note that this latter list does not include other smaller manufacturers like Alerton, Novar, Trend, and Tridium, which are Honeywell brands; and Andover, TAC I/A, and Vista, which are offered by Schneider.
So what does this mix of manufacturers tell us about the future of the industry’s products and how they will be executing projects? The following is a small sampling of product/distribution issues that seem to lack a clear future picture despite the apparent consolidation of the market:
• Does market dominance by a few lead to their complete control of most of the projects? The major suppliers have seen the value in competing channels. Corporate branches now compete with smaller independent contractors. This offers owners many options to purchase controls and services.
• What is the future for the traditional corporate branch? They seem to be pursuing a variety of project types (not all of which are focused on controls), but we can draw no solid conclusions about what their future plans really might be.
• Will independent contractors continue to perform many (if not most) of the projects? Based on the second bullet point above, this seems to be the direction. However, there also seems to be a trend of major manufacturers ending their relationships with their independent contractors (and setting up more or increasing the size of their factory branches). This clearly leaves us wondering about how many options will remain for the typical future project.
• When will BAS contractors become “systems integrators”? There has been talk about this for many years, but the building construction industry seems to be quite happy keeping BAS contractors in their place (and we’ve seen few bold moves on the part of most BAS contractors to help change this). We continue to believe that elevating the status of the BAS contractor is a necessary step in improving the quality of BAS projects, especially those that involve integration with various factory-provided controls and other systems.
• Has consolidation impacted innovation in controls and automation? While we certainly hope that this isn’t the case, it appears that the rate of new and innovative products has declined. Perhaps this is just the result of a more mature industry and a slow economy, or perhaps it is the resulting impact of consolidation.
The real question is how the above set of conflicting trends might possibly lead to real (and sorely needed) improvements in the quality of BAS projects and products. In our past columns, we have provided a lot of suggestions about how this can happen, but the above trends tell us that the market may not be moving in a direction that could embrace or benefit from many of these.
Further, without new manufacturers entering the market (which bring new, fresh ideas to BAS products) what will lead the industry to product improvements and innovations? Either way, shouldn’t we be seeing technical advances taken from the artificial intelligence playbook (like those we see in other industries)? Couldn’t advances like these make BAS products easier to set up and more robust in keeping the controlled systems under optimum control? We’re waiting …ES