Inside The EcoChamber: Interview with Howard Nunes of PepperDash
Are you getting a little bit worn out by me? Need a break? Me too.
With this month’s article I’m starting a new series called Inside the EcoChamber, wherein I will interview those brave folks out there in AV-Land who are transforming their companies to seize the opportunities offered by the smart sustainable building market. For this inaugural interview in the series I sat down (over WebEx) to speak with Howard Nunes, co-founder and president/CEO of PepperDash, a leading independent software programming company with offices across the U.S.
Scott Walker: Howard, give us a little background on PepperDash.
Howard Nunes: PepperDash is a 12-year-old company founded by David Hughes, Sumanth Rayancha — my two business partners — and me. We spun out of a large-scale Internet development company called Breakaway Solutions, which I also co-founded. In 2000 when the market collapsed, so did Breakaway. The three of us left to form PepperDash. Originally, Pepperdash was doing mostly application development on the Windows and Unix platforms. We began to dabble in Crestron and then eventually AMX programming to bring in some cash while we worked on product development. However, by 2004 AV control system programming had become our primary service line.
The AV industry at the time was talking about convergence with IT. Our success in providing control programming for large projects stems from the fact that we are IT people at our core, so the AV-IT convergence thing has been more of an opportunity than a barrier for us. Today, we are about 30 people strong, which is quite large for a company solely focused on control system programming.
SW: If where we’ve been as an industry over the past 10 years is along a path of AV-IT convergence, where do you see “traditional” AV control system programming going over the next 10 years?
HN: That’s a great question and one that comes up a lot around here and among our control programming peers in the industry. Some think there will always be a role for custom AV control programming for many years to come. I tend to look at it differently. The need for the function will go on, but the service will change dramatically. Mobile devices are beginning to have a big impact on how we deliver solutions for our customers and will disrupt traditional thinking radically.
I also think commoditization and standardization trends will continue to progress and will cut the heart out of the low end and middle tier of the market. If you look at CDW, Dell, Cisco and others, they are all offering packaged solutions to the market. That could be an opportunity for some and a challenge for others.
SW: As I talk to people who are engaging the smart sustainable building market, I am always interested in the perspective of those who come from different backgrounds and service offerings to understand how the opportunity looks to them. As a software company how to do view this opportunity?
HN: In any market where you have rapid change and diversification you will see some kind of consolidation. On the AV side, I imagine we’ll see more and more manufacturers as well as service providers getting bought and rolled into larger traditional IT companies. On the building side, I think we’ll see the same thing. There are hundreds of companies out there creating innovative solutions for the smart building market; I imagine these companies will be prime candidates for acquisition by the larger companies in this market like Siemens, Johnson Controls and Honeywell.
SW: This year the InfoComm show was held in conjunction with Realcomm and IBCon, events dedicated to the real estate industry and the intelligent building market. What did you see over there?
HN: It was notable to me that Crestron had one of the largest booths at Realcomm to showcase their Fusion EM software platform, but there were also many small providers along what was called the “Niagara Way.” Niagara is the Java-based software platform created by Tridium, a subsidiary of Honeywell, to work with their hardware. The Crestron Fusion platform is very similar in its goals to the Tridium Niagara platform. They both allow third-party software companies like PepperDash to create solutions around their platform.
SW: So let’s talk about the impediments to entering the smart building market. A big AV company is tiny compared to the big building automation companies. Is there room for small to mid-sized AV companies in this valley of the giants?
HN: If you think about Siemens, Johnson and Honeywell, they all have huge networks of dealer/installers the same way that a Cisco or Crestron does. However, most of the building automation dealers are not large companies. So I think there is a lot of opportunity for AV integrators to partner with building automation integrators to jointly pursue this work because the building automation folks have little knowledge outside of building management systems. Tying in to high-end AV systems, enterprise digital signage, building lighting controls and room reservation software is where the AV integrators can bring their value.
Actually, to my mind there’s an impediment for the building automation folks to get into our world because AV requires such a high degree of custom integration, but the AV industry is accustomed to that level of complexity and innovation and has a leg up when it comes to complex systems integration.
SW: You mention partnering among traditional building automation integrators and AV integrators. I haven’t seen much of that yet. Perhaps the problem is that there are too few building project specifications that are written holistically and in a coordinated manner such that these partnerships can emerge.
HN: True. Upstream of all of us AV providers are the building architects and engineers. There can be a level of risk aversion at play there where everyone wants to stay within the same contract framework in which they are most comfortable to mitigate their liability on a large project. USGBC was very successful in getting designers to try something new because they went to owners and made the case for sustainable design. Those owners in turn wrote RFPs that required the design team to meet a certain level of LEED certification. The same strategy of marketing to owners needs to be undertaken with respect to smart buildings.
SW: PepperDash has gone a little farther than simply peering into this market to learn more about it. You’ve created a software product called Sentegy to address this market. What is Sentegy, and why did you create it?
HN: One night I working in New York and wondering why the big shiny new LEED-Gold building across the street had all the lights on in the middle of the night. Well, it’s because there’s a human factor in setting and optimizing building systems for energy efficiency, and someone probably hadn’t bothered to configure the lighting automation settings in this building.
So we began to think about how to create a learning management system for buildings. At PepperDash, we think buildings should think for themselves based on learned usage patterns with respect to their specific occupants’ needs and the measured hysteresis curves on the heating and cooling of spaces. You can’t treat every floor the same. A trading floor may be very different from a marketing floor or executive floor. The building needs to construct its own set of rules based on algorithms that factor in these various usage patterns and continually adapt them over time. In our first pilot projects, we found energy savings of between 23 percent and 26 percent using this predictive approach. And that’s just on the energy side. Imagine how a tool like this could help the owner’s facilities people determine what their space needs truly are when planning and designing new facilities. Perhaps they can design and build a more usable and therefore more efficient building based on this empirical data, so Sentegy becomes a very useful facilities planning tool as well. This could apply to all sorts of buildings: schools, banks, office buildings, etc.
SW: So is Sentegy a shrink-wrapped product or a custom service only to be deployed by PepperDash?
HN: Our business plan is to make Sentegy 100 percent a product to be sold as a SaaS (software as a service) much like SalesForce or other web-based software offerings. Sentegy is entirely web-based, uses HTML5 and can be run on an iPad. It will be purchased as a monthly or annual subscription with additional modules that can be added depending on the particular systems being controlled and monitored in the building.
There is a services element to it, so, much like other complex software offerings, it needs to be integrated into the overall environment, and this is where AV providers can add their value. We will be developing networks of resellers and identifying architects and consultants who could be partners in specifying Sentegy. We expect there will be a number of detailed integration services that our partners can provide to tailor the product for each owner’s needs. We have deployed a few trial sites and are about six months to a year from version one in the marketplace. We are actively looking for beta partners who are open-minded and interested in this kind of advanced technology for their buildings.
Scott Walker, CTS-D, LEED® AP, is president and CEO of Waveguide Consulting, a leading AV, IT and acoustical consulting firm. He is also a past president of InfoComm International. Scott is recognized as being one of the primary forces behind the founding of the Sustainable Technology Environments Program (STEP) rating system and currently is a member of the STEP Foundation board, which is responsible for managing the STEP program. Scott can be reached at swalker@waveguide.com