The Holy Grail: Once The Internet of Things (IoT) Connects Everything in Your Operational Facility, What's Next?

Transcription

1 The Holy Grail: Once The Internet of Things (IoT) Connects Everything in Your Operational Facility, What's Next? Microsoft Chad Nesland Director, Strategic Sourcing JLL John Hampton SVP, Innovation & Product Development sig.org/eval

2 The Holy Grail Once the Internet of Things (IoT) connects everything in your facility, what's next? Chad Nesland, Microsoft John Hampton, JLL SIG Global Executive Summit April 19-21, 2016

3 Chad Nesland Director, Strategic Sourcing Over 18 years in supply chain, procurement, finance and supplier management fields Oversees global strategic sourcing team covering multiple, $1B+ categories of spend spanning real estate, marketing and professional services. Previous experience Leadership roles in Energy and Hi-tech industries focused on procurement and finance Education and affiliations BS Business Management, Linfield College BA Music Theory & Performance, University of Oregon Board Member: Mountains to Sound Greenway Trust, Young Life, ISM WW 18 years married, proud father of 3 crazy kids Microsoft 1.5 billion people use Windows everyday 80% of Fortune 500 on Microsoft Cloud $1 billion from employee giving campaigns to over 31,000 charities 112,000 employees worldwide 41 million SF owned or leased real estate in 100+ countries 1 million sandwiches eaten per year by employees 3

4 John Hampton SVP, Innovation & Product Development Over 25 years in architectural and technology industries Responsible for developing new innovative solutions for corporate occupiers that improve productivity and save millions of dollars in real estate costs. Previous experience Prominent executive positions at IBM, Teng & Associates, Dell and Regus. Education and affiliations Bachelor of Architecture & Environmental Design - Kent State University. Market Analysis and Planning - The Wharton School Proud father of two daughters JLL JLL is a professional services and investment management firm offering real estate services to clients seeking increased value by owning, occupying and investing in real estate Gross revenue of $6 billion in 2015 Global workforce of more than 60,000 The firm provides management and real estate outsourcing services for over 4 billion square feet 4

5 Agenda New frontier - The Internet of Things (IoT) for buildings Smart buildings impact on bottom-line IoT in action at Microsoft Key considerations Q&A 5

6 What is the Internet of Things (IoT)? The Internet of Things (IoT) is the network of physical objects, devices, vehicles, buildings and other items which are embedded with electronics, software, sensors, and network connectivity, which enables these objects to collect and exchange data.. Smart factories Smart homes Smart grid Smart cars Smart buildings 5

7 Devices installed (billions) The IoT market 24 billion There will be 24 billion lot devices installed by % CAGR total lot devices installed E 2016E 2017E 2018E 2019E 2020E Source: BI Intelligence The Internet of Things

8 Businesses will be the largest IoT users The three entities using lot ecosystems include businesses, governments and consumers. Consumers 5B devices installed by 2020 $900M spent ( ) $400M ROI ( ) Governments 7.7B devices installed by 2020 $2.1B spent ( ) $4.7B ROI ( ) Businesses 11.2B devices installed by 2020 $3B spent ( ) $7.6B ROI ( ) 7

9 Building savings opportunities Energy: Operations/rent: Salaries: $3/SF $30/SF $300/SF Source: Rocky Mountain Institute (2012). Guide To Building The Case For Deep Energy Retrofits. 8

10 Smart buildings solutions Old - Legacy systems Separate systems and controls Fire Energy Access Lighting Elevators HVAC Digital signage Security NEW! Integrated systems common building network, shared data Integrated building network System optimization Data and analytics Web-based access and control Open protocol 9

11 The goals of a smart building Reduce the total costs of owning and operating facilities Improve energy efficiency and water conservation Provide better services and amenities to occupants Respond to real-time conditions and needs Support a safe, healthy, and productive built environment Promote sustainable environmental stewardship = Create a better workplace 10

12 Smart building apps Personal lighting controls Temperature control Security and access control Maintenance requests Space utilization/occupancy 12

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14 Real time data = Better decisions Do we still need this the space? Renewals Which space layouts drive better employee engagements? Workplace Optimization Expansions How much more space do we need? Real Time Data Can we match the building systems to actual need and usage? Building Operations Space Planning Which spaces are used the most? Facilities Management How do we optimize services based on actual usage? 14

15 The potential of real time data Metro level Building & campus level Floor plan level.14

16 Microsoft case study We ve quietly built the city of the future. 15

17 Vision Smart buildings enable productive people Productive people Ambient intelligence Context sensitivity Predictive management Smart buildings Automated operations 16

18 Our Puget Sound real estate portfolio In 2012 Disparate applications and systems No ability to holistically manage our infrastructure and prioritize maintenance activities Labor-intensive reporting Two full-time employees running a manual maintenance program $60 million estimated cost to retrofit to integrated equipment 145 structures 58,400 housed heads 15M SF office & lab space megawatt hour average Multiple building systems $55M annual utility spend 2M connection points 17

19 Our smart buildings pilot Scope Tested three vendor solutions 13 buildings (2.6M sq.ft.) in the Puget Sound region Included a diverse mix of designs and systems types Goals Reduce energy consumption Optimize building assets Improve labor efficiencies 18

20 Smart building pilot results Easier system coordination Lower energy consumption Reduced cost Improved technician efficiency with 32,300 Work Orders per quarter Forecasted energy savings of 10 11% over three years Saved $2 million in its first year 48% of faults are corrected within 60 seconds 19

21 Building energy management Putting the Internet of Things and rich analytics to work 20

22 Facilities centric Productivity People centric Smart buildings enable productive people Smart building capabilities Customer needs Pioneer partners & customers Top (Level 3) Ambient intelligence Adapt to me Workplace 2.0 productivity and collaboration Find what I need Productivity analytics Middle (Level 2) Egress, signage, security, presence Onsite services Space utilization Ease of access Image recognition & processing Adaptive content services Spatial analytics Find me/location Enterprise IoT management 360 security assessment Base (Level 1) Power, Air, water, data Energy management Equipment management Field servicing Predictive maintenance Predictive energy Fault detection Solutions being explored Microsoft 21

23 Barriers to success Pervasive implementation across the portfolio - $$$ Sponsorship ROI measurement Rapid technology evolution Uncharted territory for many corporate occupiers and landlords 22

24 IoT prescription for success Decide what data you NEED vs. WANT Defray initial costs Rethink traditional ROI on projects Secure expertise early don t start with technology Have a plan (implementation, adoption and operations) 24

25 Success and performance metrics Define the goals and metrics for your smart building project _ Energy cost savings _ Reduced carbon footprint _ Marketing differentiation, leadership _ Technology upgrades, reduced obsolescence _ Reduced operations and maintenance costs _ Extended life of systems and equipment _ Improved productivity _ Better experience for tenants and employees; better workplace _ Safety and security _ Other? 23

26 Q&A

27 Chad Nesland, Microsoft Director, Strategic Sourcing Seattle, WA (425) John Hampton, JLL SVP, Innovation & Product Development Dallas, TX (214) Thank you COPYRIGHT JONES LANG LASALLE IP, INC. 2016

28 Appendix

29 Large pharma success to date and huge opportunity Spending over $200M/year Piloted Power Plus in two locations Achieved over 65% lighting energy savings Identified over $12M/year savings (energy & space) Will use shared savings to accelerate benefits across the portfolio 26

30 Redaptive global energy optimization No capital + immediate savings = Customer always ahead Historical utility payment Annual energy savings Savings service payment (KWH savings block) Remaining annual utility payment Utility rate inflation goes straight to customer; NO escalator included Long-term annual savings Base year Current state Contract period Post contract 27

31 Evaluation How-to: Why? Your feedback drives SIG Event content By signing and submitting your evaluation, you are automatically entered into a prize drawing How? Option 1: App 1. Select Schedule 2. Select Schedule by Day 3. Select Day 4. Select Session 5. Scroll to Description 6. Click on the Evaluation link Option 2: Browser 1. Go to 2. Select Session (#S23) COMPLETE & SUBMIT EVAL

32 Session #23 The Holy Grail: Once The Internet of Things (IoT) Connects Everything in Your Operational Facility, What's Next? Chad Nesland, Microsoft Director, Strategic Sourcing Seattle, WA (425) John Hampton, JLL SVP, Innovation & Product Development Dallas, TX (214) Download the App: bit.ly/sigorlando Tweet: #SIGspring16

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