IoT Impacts Trane’s Product Development Strategy

The Internet of Things (IoT) changes the scope of most products, expanding product development into the realm of big data and software applications. When equipment can send and receive data, the way the equipment is managed, and even the business itself, can fundamentally change. Trane, a division of Ingersoll Rand, is a case in point.

Trane makes HVAC products for a wide variety of uses, from homes to offices to manufacturing facilities. Joe Bergman, vice president and general manager of industrial technologies at Ingersoll Rand, was involved with design and deployment of Trane products for many years before he assumed his most recent position.

Bergman says that just as the IoT arrived, another major transition was underway in the HVAC industry. Manufacturers like Trane tended to own and control less of the IP that went into producing equipment. Suppliers were inventing and controlling innovations.

In addition, Bergman says, the purchasing process for HVAC equipment had become highly intermediated. Owners of facilities increasingly relied on consultants for advice about which systems to buy.

The changing IP landscape and intermediated buying model started a process in which manufacturers had to find and defend new sources of value. The IoT added momentum to this transition by opening up new possibilities for what HVAC products could do.

“These macro-level trends mean we must change the way that we create and deliver products and monetize their value,” Bergman says. “Connected devices are the major enablers for OEMs to recapture value that would otherwise slip away. More and more we can tell a value-added story about these pieces of equipment based on their real-time operating environment versus their initial design. The ability to deliver services related to the product is crucial.”

In other words, when setting out to design a HVAC system, Trane now addresses a whole new set of questions:

  • What is this product’s relationship to other building systems? What impact will it have on or from the smart grid?
  • What new levels of efficiency and reliability can be achieved, both mechanically and from operational optimizations?
  • How will connected products and services change Trane’s relationship with customers?

Expanded design scope

Once a product starts pumping out data, new design opportunities emerge. The first involves how the device itself is managed. Data allows for predictive analytics that can help determine when the device needs to be serviced and how to optimize performance.

“Big data analytics is teaching us what really happens to a machine in different applications and in different environments,” Bergman says. “We’re using that data to build better predictive models about pending failures or other service events.”

But data also allows many devices in a building, campus, or even on a smart grid, to be managed as a single large system. Bergman says that the design of the device controllers had to be adapted to address system-wide optimizations. The evolution of the controller takes place in parallel with new device capabilities that may be needed.

“When a HVAC device is ‘connected,’ it changes what becomes possible. The device may be asked to do things it wasn’t asked to do before,” Bergman says.

“In the past, it might’ve turned on at the beginning of the day and off at the end of the day, using unit-level optimization strategies. Now, it may be asked to do something as simple as matching its operation to the building’s actual occupancy load, or a more complicated optimization like switching energy sources. The data allow an intelligent decision to be made at another level and that affects the capabilities needed from the device.”

The major design challenge is determining a device’s capabilities, given that some will be operated in a traditional manner and some will be connected.

Balancing new levels of optimization

Trane is able to address the needs of key influencers in the buying process by creating applications and services that help optimize HVAC systems. Bergman says that having a service delivery capability, like Trane Intelligent Services, is key to meeting customer needs.

“The optimization of higher level systems is rarely something that the customer has the resources to take on themselves,” says Bergman. “While they love the visibility, actions related to operating analytics, alarms, predictive maintenance, and other such matters are better handled by a team that spends all day doing such work and has the data to make decisions with high confidence.”

Changing business models

Most industries being transformed by the IoT are in transition from a world in which everything is owned by the customer to a state where advanced services help maintain higher-level systems. In the future, the manufacturer will sell an outcome, such as ensuring the air in a building remains at 72 degrees.

According to Bergman, it will take time for customers to adjust to the idea of not owning as much equipment. It will also affect the design of the equipment, which will be operated differently in an “as-a-service” environment.

“The enabling technology of connected devices is what really allows us to change the game and move beyond the promise of more proactive maintenance to the goal of predictively optimizing operation of that machine in a very different way than has previously been possible,” Bergman says. “What we’ve found is that customers who start purchasing HVAC as a service wonder why they ever wanted to own equipment in the first place.”

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