AtSite’s Davor Kapelina: Wise up to the new state of smart buildings

Davor Kapelina will be speaking Oct. 26-29 at VERGE in San Jose, Calif. 

In 1993, long before the term “smart buildings” came into vogue, Davor Kapelina founded AtSite, a service and technology company focused on making buildings perform better from a construction, design and building systems level.

In the late ’90s and early 2000s — the renaissance of green buildings and renewed interest in energy efficiency — Kapelina took a deliberate path towards integrating technology into AtSite’s model of managed services. He aimed to help organizations — such as commercial real estate firms, health care companies and universities — leverage practices, technology, data and analytics to drive smarter decisions across their building portfolios.

I recently spoke with Kapelina about where the market is headed next and what it means for stakeholders in the world of buildings. The following has been edited for clarity and length. 

Elaine Hsieh: Let’s start with some context. What is a “smart building” to you?

Davor Kapelina: A “smart building” today captures a great deal of the things we’ve been talking about over the last 15 years. At the highest level, it is clean, green and efficient. It’s sustainable and leveraging the latest, greatest technology in a way such that how that building performs today is better than how it performed yesterday or the year before or the decade before.

Hsieh: Do you feel like the industry defines it the same way? 

Kapelina: No, I’m guessing that most people in the industry would immediately jump purely to technology, which is part of what defines a smart building.

But unfortunately, technology by itself doesn’t really do anything. You have to be able to convert that into action and results, and that takes practices as well as technology.

There’s an app called SmartThings, and it’s all about [the Internet of Things] in the home. It doesn’t really talk about what you do with it. It’s all about how you wire and connect the technology. “Smart” has been, over the last several years, associated with instrumentation more than software and data.

Hsieh: How do you think the market has grown or shifted?

Kapelina: One big enterprise trend we’re seeing is this notion that owners and operators of buildings would be able to assemble the requisite technologies and practices and all the people required to deliver results from smart buildings.

But the notion of “do it yourself” is losing some favor. Maybe some very large organizations can build their own approach, but it’s moving so fast and requires so many disciplines and integrated approaches that this alternative notion of “do it for me” from organizations seems to be getting more traction.

Companies such as ours are being asked to provide a platform and the associated support services that can “de-silo” data, put a solution together and actually help get results. … The software as a service model in buildings has become a bit overwhelming for many. 

Hsieh: So where do you think it’s headed next, in a longer time frame?

Kapelina: If I had to put a crystal ball over the next two to three years, I think the “do it for me” approach — this managed service model like we’re positioning — is nascent right now. … There’s just organizational inertia that needs to be overcome to break from a paradigm that’s not working.

The medium term trend — maybe five years — will be more emphasis on technology in the so-called “machine-to-machine” phase.

Most of those efforts are in pilots and proof-of-concepts. This notion where there’s a little bit more connection between some of what happens in and around buildings and the computers participating in those decisions and actions will grow. Even today, with all the drama and hype around [the Internet of Things] and data, this is a third wave of the Internet revolution.

There’s still an immense data explosion building right now. … There is a tremendous amount of work, effort and thinking to translate that into actionable information when, where and how you need it.

Our company has spent a lot of time and money figuring out how to acquire a lot of data cheaply, efficiently and effectively. We also have been figuring out how to take that data and turn it into actionable information. The next piece is pushing that into the hands of the people that can do something with it. 

That’s going to be very futuristic. Is that going to be [integrated into] Google Glass or your Apple Watch? How are little decisions in and around your buildings going to show up that help you experience the building in a better way? And how does the building interface with you in that same instance?

Hsieh: So how soon and how fast is that going to happen?

Kapelina: Now I’m switching from trying to get our company cranking through that to “crystal balling.” This is part of the challenge in real estate overall. The building industry doesn’t yet move at the speed of technology.

All of what I just described — machine-to-machine, putting data or information in Google Glass — we do that here as a hobby.

But getting organizations to recognize the uber-value of what it means to have facilities in real estate that are more than just scratching for maintenance dollars but actually pushing the envelope [to deliver] high-quality occupant, resident or patient experiences — there’s enterprise inertia that needs to happen to accelerate that … that’s really what’s holding back energy efficiency and the like.

The ROIs that are focused on are very one-dimensional — very “ROI on $1 of energy savings” as opposed to the totality or the total cost of value and ownership.

It’s just going to take more proof points. I suspect it’s a good three to five years before we get more integration.

A lot of demand-response providers had the capability long ago to get a signal from the grid or the utility provider and could, through technology, make modifications in the building in order to shed load at a critical peak moment. Many of them had multiple ways you could buy their services. You could get an email alert, or you could have them do something more than that. And then you could actually have an Option C where they would actually make the adjustment.

Very few companies were willing to consider a machine-to-machine activity that somebody outside of their building might do something that would save them money and reduce risk.

This shows there’s no technology hurdle. It’s just education and sophistication.

Hsieh: So if I’m a building or a portfolio manager or an owner-landlord, how should I think about the changes coming? 

Kapelina: Hopefully, with wide-open arms. I think we’re past the first movers. Big enterprises like Microsoft [are] doing it themselves with access to 70,000 programmers. You see a company like that, and they are 100 percent going this way. 

We joke internally that “smart buildings” is definitely the future, if, for no other reason, they’re not going to be getting more stupid.

If you’re an enterprise with a portfolio of real estate, this is not an option. The question is really just speed and scale. We’ve got to do something better and more innovative because we can’t just keep hiring more people.

Hsieh: And what does all this mean for the tenants and the occupants?

Kapelina: It should be a nirvana. Think about the consumerization of technology. If you go back to the ’80s, who had the cell phones and fax machines? It wasn’t the consumer; it was the business. 

Today, where does the cool technology come from? How many times do all of us in business walk up to a screen and start swiping it? That’s not because we’re used to swiping at work; it’s because we’re swiping on our iPads at home.

As you continue to bring more technology into the consumer’s hands — whether it’s smartphones or smart watches — you will begin to expect to walk up to an elevator: It opens, knows who you are, and takes you to the floor where you need to get out. Then the building tells you how to get to your meeting.

When a building doesn’t do that, you’re going to feel like you’ve stepped into the ’90s, right? Because you’re not experiencing technology the way you expect it to deliver to you.

From a user or occupant standpoint, it’s going to be what most of us would expect by now. And yet, the organizations or building owners that don’t get there are not really providing very good customer service. That will ultimately impact revenues.  

If you’re a developer and your building is not modern, the people that use that building will let their landlord know that they don’t like it. Or, if you’re in a hospital that doesn’t feel like a contemporary, modern experience, you might question the quality of care. 

Hsieh: Any advice for folks in the building industry that you are tired of repeating but still needs to be said?   

Kapelina: You’ve got to get started, and organizations need to look at this in a holistic way.

Smart buildings are about de-siloing your data wherever it sits. That’s energy, waste, water, maintenance reports and how you’re consuming space. Get that data into an environment where you can manage it in a more thoughtful, organized way because all of these elements relate to one another.

When you’re monitoring energy use for more than just saving a penny, you actually have an opportunity, for example, to leverage that same data to drive potential infection control in a hospital.

Or, at a university campus, it could have impacts on long-term total cost of ownership, maintenance schedules and equipment replacement.

All of that properly managed and organized is what you can get out of smarter buildings if you take a bigger view of what it means to have a smart portfolio.