On January 21-22, Cleantech Group is hosting — in San Francisco — the “Buildings Get a Brain” senior executive summit on the future of intelligent commercial buildings. In the lead up to the summit, Cleantech Group is chatting with leaders across the commercial real estate space to learn more about what the rise of building innovation means for start-ups, corporates, investors, buildings, and tenants. Click here to learn more about Buildings Get a Brain and request an invite.
Tom Arnold, CEO, Gridium
In just a few words, can you talk a little bit more about what problem your company is solving?
We have two sides to our business. We have the buildings business and the utilities business. In both cases, we are deploying cloud-based energy analytics software. On the buildings side, there’s this explosion of data coming from smart meters and, simultaneously, big changes in tariffs and pricing programs that make your energy bill really complex. Building managers don’t know how to analyze either the data or the tariff changes. What our software does is basically derive new sets of diagnostics and analytics from that data. Its data they already have but it’s trapped in a messy utility system. The data alone doesn’t explain what’s going on; but when we apply complex analysis systems, we start to understand what the data is telling us and we’re able to help change our client’s energy-use to avoid high costs. On the utility side, our cloud-based analytics allow utilities to better inform their demand side management strategies and price response programs.
What has been your biggest challenge in gaining traction with your current customers?
Our biggest challenge is that customer decisions are made in the belly of the organization, and the belly of the organization is not budgeted – and they may not even be incentivized to be more energy efficient. Some decision-making is attitudinal, though. If you are in a green building or if you are pursuing LEED or Energy Star, you tend to make different decisions than if you weren’t.
Historically, multi-tenant has been a very difficult segment to approach. However at the price point we are selling at, the solution fits. About 60% of our customers are multi-tenant.
Thankfully, one thing that has changed over the last five years is increasingly people are making a building value argument around energy efficiency and realizing that operating costs are linked to the ultimate value of the asset.
Buildings are increasingly leveraging big data to provide more intelligent analytics. How do you see the role of and the approach to big data shifting overall?
At the building level, people are more comfortable making data driven decisions. When we showed up two years ago, the idea that you would game your demand charge at the individual building level was an interesting idea and certainly novel. The utility side is a much more complex issue. What we are seeing emerging is data as the foundation of more intelligent demand side management programs. That can be everything from segmenting your base and being able to target problems more effectively, to individual residents or consumers, and directly operationalizing those programs. Part of that is enabled by the fact that the costs are so much lower. Even if we started this business three or four years ago, our architecture would be radically different and our costs would be 20-30 times the cost that we have now. So it’s been the public cloud that has enabled companies like Gridium to go in and solve a very specific problem at a low cost.
What do you like most about what your company is doing?
The statistics and algorithms we are doing are fascinating. We spend a lot of time on just pure mathematics, and it’s starting to pay dividends. Basically everywhere we turn where there’s a new problem, we’ve got the modeling framework in place to answer that problem pretty rapidly. That’s the most intellectually stimulating part of the job. The most fun part of the job is seeing a chief engineer save a bunch of money and get rewarded for it within their organization. I think that’s fun.