Navigant Research Blog

Losing Net Neutrality: End of IoT or Boon for the Edge?

— June 14, 2017

The Trump administration is on the road to making net neutrality a thing of the past. Federal Communications Commission (FCC) leadership are positioning to undo regulations that have laid the foundation for how consumers access the Internet. The risk is that without this regulation, Internet service providers can delineate variable fees and Internet speeds when accessing certain websites as a means of protectionism. In May, FCC Chairman Ajit Pai articulated the administration’s view that Obama-led rules are not protections for online retailers and consumers, but rather, a “bureaucratic straightjacket.” This new FCC-led sentiment and the expectation they will follow through with actions to dismantle net neutrality laws this summer have inspired a Day of Action protest on July 12 with the likes of Etsy, Kickstarter, and Mozilla. Impassioned executives have explained the importance of net neutrality. General Council at Kickstarter stated “A threat to net neutrality is a threat to the free exchange of ideas that creative culture and an informed public rely upon.”

The FCC’s Open Internet Order is the rule supported by the Obama administration in 2015 that protected net neutrality on the precedence of anti-monopoly oversight of the telecom industry. The 400-page tome is dense, but the intention is clear in line one: “The open Internet drives the American economy and serves, every day, as a critical tool for America’s citizens to conduct commerce, communicate, educate, entertain, and engage in the world around them.” Industry concerns are clear. The Republican-led opposition to net neutrality is a paradox; while it may be positioned to eliminate government intervention in commerce, the loss of this regulation will be a direct blow on today’s most vital free market: the Internet.

Hit to IoT?

An article in Wired outlines what the end of net neutrality could mean for the Internet of Things (IoT): “Dismissing the rules could be a big problem for the future of the Internet of Things, since companies like Comcast—which is already working on its own smart home platform—certainly have the motivation to create fast and slow lanes for particular gadgets and services. If your Internet provider can decide which personal assistant or smart home gadgets you can or can’t use, the broadband can dictate the winners and losers in the Internet of Things race. That wouldn’t bode well for competition, innovation, or you.”

Also, Bad for Business?

IoT has become a central theme in the intelligent buildings market. The capacity to deploy low cost devices to gather and communicate near or real-time data has opened the door to innovation in how commercial buildings are managed and even viewed as business assets. IoT intelligent building offerings can reduce energy costs, streamline operations and maintenance, and redefine occupant engagement. Many of the leading offerings deliver value through a core analytics component utilizing cloud computing. The attack on net neutrality could take a blow at the intelligent building in a similar way to the smart home as explained by Wired. However, even if the FCC wins this fight, the future for intelligent buildings is still bright—what may change is who the winners are.

A Boost for the Edge: The Smart Gateway to the Rescue

Large technology players including Cisco, Dell, Intel, and Qualcomm have been making waves in the intelligent market with hybrid offerings that shift the intelligence of the solution to a mix of cloud and edge computing. This delegation of computing can lessen the blow of the FCC’s action and protect the momentum of the intelligent buildings market. The future of IoT and intelligent buildings is contingent on technology partnerships. I would argue that if we lose net neutrality, the role of IT majors in the market may become that much more vital.

 

Political Posturing Won’t Stop Climate Action

— June 12, 2017

The debate over climate change wages on in Washington, DC, but the businesses that lead the national economy are taking action today. Even without regulatory mandates, corporations are making significant investments in energy efficiency, clean energy, and other sustainability initiatives to combat climate change. Uncertainty is bad for business, and climate change forces corporate risk analysis and planning. The upside is that smart investments can help combat climate change and deliver bottom-line benefits.

The Evidence: Action at the Top

Fortune  500 companies have been making commitments on climate for decades at this point. Nearly 50% of these industry majors have committed to greenhouse gas emissions reductions. More specifically, the effort of RE100 has recruited over 95 companies pledging to rely on 100% renewable energy. Pressure from shareholders and customers has driven investment in renewables and emissions reductions requirements across the supply chain.

When the top of the Fortune 100 list fail to lead, there is significant backlash. At the end of May, for example, Exxon Mobil faced major shareholder push back on the company’s failure to address climate risk assessment. According to The Washington Post, 63% of shareholders voted in favor of the oil giant assessing and disclosing the climate risk against long-term financial performance. This motion by Exxon’s shareholders echoes efforts with many other major fossil fuel-based companies in the last year, according to the advocacy group Ceres.

The Benefits: Loyal Customers, Happy Shareholders

Walmart, the world’s largest retailer, has faced its share of controversy around corporate social responsibility. However, when it comes to climate change and sustainability, some of the company’s major recent efforts are showcasing it as a leader. In 2016, the company set science-based targets for 18% greenhouse gas emissions reductions by 2025 from 2015 levels. This is a notable effort, bringing commitments inside the fence as opposed to the extensive pressure the company has historically put on its suppliers.

Walmart is demonstrating the business benefits of leadership on climate change and sustainability. As Joby Carlson, director of Energy and Operations Sustainability, explained in Energy Manager Today, “We try not to do anything that doesn’t have a good financial return. Sustainability has to hit the balance among the economics, the environmental, and the social side. Energy efficiency has been our bread and butter. We are a low-cost retailer so we are sensitive about the cost of operations. Optimizing and reducing our energy demand has translated into millions and millions [in savings].”

Corporate America is leading the charge and moving forward with combating climate change, and in the process, redefining sustainability as a metric of business success. As companies focus their efforts inside their operations, there is more opportunity to leverage technology that delivers emissions reductions while also delivering cost savings and other broad business benefits, including loyal customers and committed investors.

 

Technology and Buildings – A Solid Foundation for Sustainability

— June 6, 2017

The idea of corporate sustainability risks becoming a business paradox—a symbol of commitments without funding or substance that, in themselves, become unsustainable. However, political uncertainty, understanding of climate risk, and shareholder demands are redefining corporate sustainability strategies. Technology innovation has set the groundwork for a transformation of sustainability strategy, and intelligent buildings are a perfect starting point.

#1: Business Response to Political Uncertainty and Climate Risk Awareness

In early May, a full page ad campaign in The New York Times, The Wall Street Journal, and the New York Post made a call to President Donald Trump to commit to the Paris Agreement. The signatories, 24 companies with a market cap of over $3.2 trillion, proclaimed that US leadership on climate change would strengthen the country’s economic competitiveness, create jobs, and reduce business risks. Uncertainty is bad for business, and a unified approach to study, combat, and adapt to climate change is an imperative for the economy.

#2: Shareholder Demands

Ceres convenes institutional investors for climate change education and advocacy. Climate change risk disclosure is a major focus area, and the group tracks shareholder resolutions that demand portfolio resilience analysis. Ceres cites the resolutions filed at 15 major fossil fuel companies as one line of evidence that shareholders demand climate change preparedness and investment in mitigation. Along the same lines as #1, shareholders see uncertainty as bad for their investments, and with more unity, major investors are demanding action and planning on climate change.

Start with Intelligent Buildings

On May 4, I moderated Energy Efficiency in Buildings – Technology Helping to Set New Benchmarks, a webinar for Realcomm. The roundtable discussion and results of real-time polling support the argument that technology can provide measurable improvements on sustainability and tie to climate change commitments.

A question to the audience highlighted the confusing state of branding and opinions around sustainability. The audience was asked, “Would you rather your company be considered ‘green’ or ‘efficient’ by your customer base?” The results were striking: 80% chose “efficient,” while only 20% chose “green.” This result underscores the challenges companies have faced with sustainability initiatives that failed to rely on technology or reflected measurements in time rather than ongoing improvements.

John Seaton, director at RealFoundations, helped illustrate how technology can deliver bottom-line benefits and change the face of sustainability. In two case studies, RealFoundations identified significant energy and associated cost savings with data analytics in 4-star ($20,000 energy savings) and 5-star ($10,000) NABERS Energy (the Australian equivalent to LEED) scored buildings. This evidence sets the stage for how technology can amplify the benefits of sustainability commitments.

There is power in aligning technology and sustainability. An intelligent building is defined by a data infrastructure for ongoing monitoring and operational changes. Once a commercial building has the IT backbone for capturing detailed data on a continuous basis, there is a platform for systemic change that can deliver sustainability benefits while supporting the bottom line. The dataset is the input and the output is a near endless array of business metrics—utility cost savings, equipment maintenance reports, occupant satisfaction, or carbon emissions reductions. The real benefit is that as a tool for sustainability, an intelligent building delivers quantifiable energy, resource, and traditional sustainability metrics. It also delivers business improvements that keep executive decision makers committed and budgets lined up.

 

Smarts for Sports

— April 7, 2017

The annual upsets and thrills of March Madness may be coming to an end, but excitement can still draw attention to major arenas across the country. Intelligent building solutions are heightening the experience for audiences, keeping visitors safe, and delivering cost savings for arena owners by improving maintenance for operators.

In Wisconsin, the president of the Milwaukee Bucks, Peter Feigin, explained the vision for the team’s new arena. It will “create a state of the art environment that is the most fan friendly place anybody can go for sports entertainment in the world. The importance of technology is crucial to that environment. How a state of the art building system can seamlessly integrate to ensure fans are safe, comfortable, and everything they need is at their fingertips … the overarching vision for this development is not just an arena, but a catalyst for positive change throughout our region.” The development of the 714,000-square-foot arena is the center of the planned Wisconsin Entertainment and Sports Center in downtown Milwaukee. It is a central piece of an overall 30-acre development aimed at revitalizing the city’s downtown. Johnson Controls is the technology partner bringing the smarts to the new home of the Bucks.

There is an important opportunity in the deployment of smart building technologies in arenas. These high profile, multimillion (or even multibillion) dollar facilities are the epicenter of community pride for many cities. The smarts in these facilities can be an effective catalyst for the intelligent buildings industry as a whole. Technologies are here today to completely rewire how facilities are operated to be safe, comfortable, and convenient. The challenge is market awareness and education. How well building owners and managers understand the financial, business, and social benefits of intelligent building technologies can be a huge hurdle for technology adoption.

Convenient

High profile arenas can be a great live action classroom to boost demand for intelligent building technologies. The results can be striking, as WIRED magazine put it with a profile of the new Sacramento King’s Golden 1 Center: “the highest-tech stadium in sports is pretty much a giant Tesla.”

Convenience and information drive the visitor experience at the King’s Golden 1 Center—download an app to receive texts on last minute ticket upgrades, pointers on the best parking, directions to your seat, and even stats on the game. The backbone of customer convenience comes from a rich network of intelligent building technology, sensors, data communications infrastructure, and analytics.

Safe and Comfortable Too

Besides enhancements to the customer experience, owners and operators of smart arenas see other important benefits. The technology infrastructure that pushes information to customers through phone apps can also quickly and efficiently direct staff to ensure the facilities are safe and comfortable. Take a look at the Vivint Smart Home Arena in Utah. Due to fan expectations for seamless connectivity during March Madness, the arena deployed a Distributed Antenna System. Two integrations provide parallel benefits. Not only does every visitor on Snapchat get their picture sent to friends, but the system also supports emergency preparedness as a direct network for first responder communications.

The smart arena is the new face of sports and an important avenue for promoting the intelligent buildings industry to fans and ultimately building owners and managers across industries.

 

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