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Powerhouse Dynamics |
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February 13, 2017 Issue |
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CEOCFO MAGAZINE |
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Energy Management System Monitoring, Analyzing and Controlling Equipment for Portfolios of Small Commercial Facilities, Improving Food Safety and Lowering Energy Costs |
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Chief Executive Officer
Powerhouse Dynamics
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – February 13, 2017
CEOCFO: Mr. Flusberg, would you tell us the concept behind Powerhouse Dynamics and SiteSage®? Mr. Flusberg: SiteSage® is designed to connect to, monitor, analyze and control equipment for portfolios of small commercial facilities, otherwise known as chains. Our customers are restaurant chains, convenience store chains, small box retail chains, and bank branches, among others. The goal is to help them better manage all that equipment they have spread out over multiple locations, with an aim toward improving equipment maintenance, reducing their energy bills, and enabling other operational efficiencies by knowing what is going on with all their equipment and controlling it. For food services organizations, there is an added food safety element because we are monitoring food storage temperatures in real time. In many cases we are also integrated directly with cooking equipment such as ovens, where we are monitoring temperatures at which the food is being cooked and how long it is being cooked.
CEOCFO: What are the challenges in monitoring at one location but also a variety of locations? Mr. Flusberg: Think about it from the perspective of the customer. If you think about a large office building, it is going to have one or more facility managers on site. A typical 100-store restaurant chain spread across six states will have one facility person. They are trying to keep on top of all of the equipment to make sure it is operating properly, and they are not physically there at every site. There may be a store manager, but they are busy worrying about customers rather than equipment, so it is a challenge if you are not automating the process and keeping track of this equipment. What we have done is relatively straightforward: · We install an energy monitor inside electric panels and monitor energy use · We swap out thermostats with smart ones that we control from our network · We put temperature sensors into refrigerators and other equipment including HVAC equipment · In some cases, we install a controller that can turn equipment on and off, refrigeration controllers that optimize the defrost cycle, and a variety of other sensors, including door closure sensors for example.
All of that speaks wirelessly to an Internet of Things gateway that we install in each of these locations. That gateway connects to the internet broadband at the facility, uploading data from all of the sensors and controls. Then all the heavy lifting and the cleverness of data analysis is done in the cloud. It is relatively straightforward once you put all this equipment in, and what we have been able to do is to create relatively inexpensive, easy-to-install equipment that captures the data and controls the equipment. Our patented analytics engine analyzes all the information, warns customers about problems, identifies things that are happening that should not be happening, and controls the heating and cooling. We may also be controlling their indoor and outdoor lighting, as well as their ovens and other equipment.
CEOCFO: What happens if there is a power outage? Mr. Flusberg: When the power goes out in one of our customers’ facilities, it is a serious issue because all the equipment stops and they do not typically have backup generators, so the lighting and ovens turn off. Typically they will know about it at the store level if they are open, but we will always know about it and can provide an alert that we are not getting any data, which could mean that the internet service is down or could mean that the power is out. Another concern for them is when a particular piece of equipment fails. So, we also have an alert that says your refrigerator, for example, is not drawing any power. That is important for food safety purposes if nothing else. Most of our components log data even when they are not communicating. If the power goes out, the data captured beforehand is not lost, and as soon as power comes back on it is uploaded. In some cases, for example, we place battery powered temperature sensors inside refrigerators. The importance of this came up recently with a chain that was hit by hurricanes. They were thrilled to discover that when the power came back on, they knew exactly what the temperature had been inside their refrigerators during the period the power was out, so they knew what was safe to use and what wasn’t.
CEOCFO: Are many of the companies you deal with paying attention to the analytics as well as the monitoring or do some people just want the monitoring? Mr. Flusberg: There are some people that only want controls and do not want to worry about the information we can provide. Knowing the nature of our customer base, these are not people sitting at computers for the most part. They are running around managing stores or maintaining their equipment. We try to make the use of the system as painless as possible by having it do the interpretation for them and provide real-time alerts and exception-based reports. For example, they may get an alert that says “HVAC unit #3 is short cycling” and the alert would suggest possible causes and solutions. The facility manager will then act accordingly, which might mean dispatching a technician. In fact, with some of our customers, our system is integrated with their work order system and will automatically generate a work order that gets sent out to the company that is maintaining the equipment. There is little the customer has to think about because the system does the thinking for them. As easy as we make it, though, many of our customers still prefer to use our managed service, so our staff is watching all the data and actually will give them a call to say “I noticed there is a problem with this particular unit, here is what I think is wrong with it.” In some cases we actually take the hot/cold complaints from the stores because they will often not let the store managers adjust thermostats. Managers may call us and say it is too hot or cold and our staff will look at the data and get back to them and to let them know if something is malfunctioning. Our staff might say there is a problem with this particular unit and ask if the manager wants us to notify a service company. We try to make it as simple as possible for them so we offer a lot of help. That being said, at some of our larger customers there are people that spend a lot of time working with our system.
CEOCFO: Are there many companies with similar services? Mr. Flusberg: When we installed SiteSage in our first restaurant company five years ago, there were only a handful of competitors and it was a largely unpenetrated space. It has changed and there are more competitors now. We do not think anyone offers the depth we do. It is still not a huge number of competitors, maybe only a dozen companies of which there are three that we will compete with 90% of the time. It is not a crowded market by any stretch. Probably fewer than 10% of all the facilities that we sell to have a system like ours already installed.
CEOCFO: Which industries have not paid attention the way you would expect? Mr. Flusberg: We are focused on a handful of industries, although that is growing. I think the restaurants were interestingly the least advanced in the space when we started. More small-box retailers had systems because the bigger box retailers did, and more convenience stores had systems because they were being sold by the companies that were selling to larger supermarkets. The restaurants were probably the last ones to start looking for these types of systems, although we are seeing that changing pretty quickly right now. Banks had tended to focus on their big facilities more than their branches, but that is changing rapidly as well. The other market that we are seeing up and coming is the walk-in health clinics that you see sprouting up all over the place. They have a need to know what is going on with their refrigeration because they are storing medicines, so they have a very similar set of issues to food service. They want the patients to be comfortable, and on the other hand they do not want to be spending a fortune on energy. They want to be alerted immediately if their equipment goes down.
CEOCFO: I see on your website that you have a home product! Mr. Flusberg: We started with that. The intent was always to get a commercial product out but we had a home product out first. We still sell it but it is not a major focus of the company. It is being sold by a number of channel partners and is also available on Amazon; we pretty reliably get orders from Amazon on Mondays, so people seem to buy systems over the weekend. We have several thousand out there. Our customers tend to be environmentally conscious but at the same time they tend to have big houses so they are spending a fair amount of energy and they want to be able to do something about it.
CEOCFO: When you install equipment how do you protect it? Mr. Flusberg: In the past, many of our customers moved thermostats out of the store or restaurant and into locked managers’ offices because the staff would continually fiddle with them. It was also common to put the thermostats behind plastic boxes, but what they found was that it did not take long for the staff to figure out how to break in. Our software can lock staff out of changing the thermostats, or limit the changes that can be made.
At each customer site, we install a gateway that connects all the equipment to the internet. What we see sometimes is the manager or other staff member unplugging the gateway, for a variety of different reasons. One of the things we have done with the latest release of our gateway is to enable it for power over Ethernet, so that instead of plugging it into a wall socket where it may be pulled out, it gets screwed into an internet port and people do not pull it out of the wall any longer.
CEOCFO: What is your geographic range? Mr. Flusberg: We sell throughout North America, Central America and the Caribbean. We just got our first customer in the UK. It is one of the largest restaurant chains in the UK, and we’re starting with a small pilot project which will help us decide whether to expand into the UK, and maybe from there into Europe.
CEOCFO: Did you go after the UK company or did they find you? Mr. Flusberg: In this particular case one of the equipment manufacturers we have integrated with – an oven manufacturer - made the introduction because they believed this restaurant chain would be very interested in monitoring their ovens in real-time. We had just received safety certification in Europe because one of our partners was interested in selling there, so the timing worked out well to enable us to sell in Europe. To sell in Asia or South America, we would have to go and get safety certification in those areas.
CEOCFO: What do you understand now that you might not have a couple of years ago? Mr. Flusberg: When we started, we were intentionally focused on equipment rather than just the energy savings because we understood that to be what our customers cared about. But it turns out, the energy savings is not just a bonus; that pays for all of the other benefits. We achieve ten to twenty percent energy savings in almost all cases and payback in under two years, and in many cases under one year.
We have always been an Internet of Things company, connecting thermostats and electric panels to the internet from the start – and connect a lot more “things” now. The whole explosion in the last two years of thinking about Internet of Things has been fascinating because our customers are all excited about connecting to their equipment now; that certainly was not the case three years ago. We were ahead of the curve and the curve is beginning to catch up. If you look back historically to building management systems, they were just dumb control systems when they started out. They were not connected to the internet and they did not do analytics, they just let you control things. That has begun to evolve, even in the bigger buildings. We set out from the get-go to create something that made sense in smaller facilities, that was wireless so it was easier to install, offered low-cost integrated controls, and included monitoring and analytics, all in a single package. The market is beginning to understand that having all these things together makes a lot of sense. We see a very positive evolution in terms of what we have been trying to accomplish. |
“We set out from the get-go to create something that made sense in smaller facilities, that was wireless so it was easier to install, offered low-cost integrated controls, and included monitoring and analytics, all in a single package. We were ahead of the curve and the curve is beginning to catch up.”- Martin Flusberg
Powerhouse Dynamics
Contact: Helen Fairman (617)340-6582
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Martin
Flusberg