🎧 #148: Foundations: Intro to Horizontal Architectures

‍"When we think about this horizontal architecture term, like what is it and how does it improve things? One analogy that people like Dexus’ John Clarke say, is that the old way was to buy the applications before you buy the smartphone, which is not a great idea. The horizontal architecture is like building the smartphone foundation before you open up the app store and download an app onto it."

— James Dice

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Episode 148 is a conversation with Nexus Labs’ Rosy Khalife and James Dice.

Summary

Episode 148 is part of a new series called Foundations. The idea behind this series came from conversations with many of you from our Nexus community. We'll be covering topics that keep coming up time and time again, that don't have a lot of beginner resources. These are concepts that we explore in our Nexus Foundations course, our six week online introduction to the smart buildings industry, but these episodes will give you an introduction into one important topic. Please let us know what you want to learn about next!

Music credit: There Is A Reality by Common Tiger—licensed under an Music Vine Limited Pro Standard License ID: S441929-15083.

Full transcript

Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!

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[00:00:00] James Dice: When we think about this horizontal architecture term, like what is it and how does it improve things? One analogy that people like Dexus, as John Clark say, is that the old way was to buy the applications before you buy the smartphone, which is not a great idea. The horizontal architecture is like building the smartphone foundation before you.

[00:00:21] Open up the app store and download an app onto it.

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[00:01:12] Rosy Khalife: Hi Nexus community. This is Rosie and James from Nexus Labs. We're super excited to launch a new podcast format called Foundations. The idea behind this came from conversations with many of you where we'll be covering topics that keep coming up time and time again, that don't have a lot of beginner resources.

[00:01:32] James Dice: Yeah. These are concepts we explore in our Nexus Foundations course, our six week online introduction to the smart buildings industry, and these episodes will each give you an introduction into one important topic. So let us know after you hear this one. What you want us to cover in the future?

[00:01:49] Rosy Khalife: We just released our horizontal architecture 1 0 1 guide, and we got a lot of questions about that, so we wanted to kick off this foundation series with that topic.[00:02:00]

[00:02:00] James Dice: Yeah, so let's jump in. I like to start this conversation about horizontal architectures with just what is an architecture to begin with, because if you're not from the IT world, you might not have heard that outside of the context of. Building buildings, that sort of architecture. Every commercial building has base building systems, and so these conversations are best if we start to think about those base building systems first.

[00:02:28] Every commercial building has an HVAC system, a lighting system, a security system, a metering system, and many more systems, right? Those systems are typically siloed from each other, so sometimes I like to call them siloed systems or silos. Each of these systems has a combination of hardware, devices, software devices, and networking technologies that together provide one dedicated function.

[00:02:52] And typically people refer to architectures and layers that are organized by a common function such as the sensor layer, [00:03:00] the network layer, the data layer, the control layer, or the application layer. Most smart building solutions actually then are sitting on top of these siloed systems or overlaid on top.

[00:03:12] So what's confusing about smart buildings is that a lot of times there's actually an architecture laid on top of a base building systems architecture. So that's why you hear the term overlay a lot, as in this solution is overlaid on top of the HVAC control system and. When we think about this horizontal architecture term, it's come up a lot on this podcast before.

[00:03:36] And so where did it come about? It's best to start with what became before that concept. So phase one of our industry, phase one of our industry was full stack vertical architectures. And this is a phenomenon that's common across all industries that are in the midst of digitalization. Single purpose technology solutions are widely termed point solutions or [00:04:00] something that sort of solves one particular problem without regard to related issues.

[00:04:05] And so what's a vertical architecture? Then? A vendor installs an integration device on a local network, pushes data to their cloud, organizes it according to their standards, and then does some sort of fancy math or visualization, and then serves up a software application. So point solutions like F D D, they're amazing because they can diagnose the HVAC systems and diagnose issues with the HVAC systems in almost real time.

[00:04:31] Another application, like an energy model, can create a physics-based model of the building, calibrate to a building's actual performance, and create different scenarios for decarbonizing that building. So that's also amazing. An application like Advanced Supervisory Control. It can control the HVAC better than the base building system actually can.

[00:04:51] So these innovations are super cool and those point solutions are a lot of what we cover in Nexus and on this podcast. [00:05:00] But if you think about these three different examples, They all have redundant parts of the stack, that they have layers of the architecture that are the exact same, right? And so they all have redundant integration with the HVAC control system.

[00:05:14] They all have data storage of basically the same HVAC data, and they all have data modeling layers that don't easily communicate outside of each of those three vendors stacks. And. Further, those applications that we just named, those three different point solutions, they only solve one or two problems for one or two stakeholders, and they leave out pretty much everything that's adjacent to those problems.

[00:05:40] And those are just three types of solutions that sit on top or are overlaid on top of HVAC control systems. There are dozens of other different types of solutions in the marketplace, and if we expect building owners to buy all those, they're gonna be left with what people call. What I've called point solutions spaghetti, right?

[00:05:59] So you [00:06:00] have many, many dozens of different technology providers across your portfolio of buildings, and the horizontal architecture is meant to be the answer to that potential mess. And so let's move on to that. So how does it, like, what is it and how does it improve things? One analogy that people like Dexus, as John Clark say, is that the old way was to buy the applications before you buy the smartphone, which is not a great idea.

[00:06:28] The horizontal architecture is like building the smartphone foundation before you open up the app store and download an app onto it. It's made up of horizontal infrastructure layers, which are the device layer, the network layer, and the data layer. That enable, that's the key word here, enable communication with different software applications.

[00:06:50] So the owner's standards. So the building owner's standards such as cybersecurity standards, they determine how each layer is gonna be set up and how each layer is [00:07:00] maintained, and how new devices and new applications are introduced into that stack. So to me and and I, I think to us here at Nexus, the details of each layer are really fun to explore.

[00:07:13] But the most interesting question is what does our agreement on this new approach, the horizontal architecture mean for the future of the industry? And what I imagine is a future where every building's, devices, network, and data layers are set up to scalably, securely, and reliably enable. That's that keyword again, enable smart building applications.

[00:07:34] And if that were true, all of the outcomes that we're sort of collectively working towards will will get easier. And that doesn't mean we should sort of halt all of our progress with deploying new applications. So we talked about all those three different types of cutting edge applications. There are so many amazing applications here, but we just have to realize that pursuing those applications without acknowledging the importance of the infrastructure that they sit on top of that piece of [00:08:00] our industry needs to be sort of an artifact of the past.

[00:08:05] Rosy Khalife: Very cool. Thanks James. That was really helpful. Um, one thing I've always been curious about is there are obviously these large companies that do all of the pieces of the stack that you mentioned, and that seems like a really easy way to implement smart buildings right away. I'm just curious, is there benefits to that approach?

[00:08:24] Is there cons? Like how should we be thinking about that?

[00:08:28] James Dice: Yeah, I, I mean, I think this is a new way of doing things, right? And when we're proposing a new way of doing things, we're proposing to disrupt the old way. And I think there's always gonna be people that are skeptical of that change, that disruption.

[00:08:42] And we just have to realize that there are pros and cons to everything. And if you're a buyer of technology listening to this, you just have to decide, do I want the pros or do I want the cons? You can choose, and the marketplace is full of such diverse solutions that. You just have to know what you're looking for.

[00:08:58] So I think it's [00:09:00] important to say what are those pros and cons, right? So I think the pros of buying a full stack from one company is that when something goes wrong, you have one vendor to go to, one vendor to, you know, Fire one vendor to tell what to do and one vendor to sort of go through the procurement process and buy from.

[00:09:19] When you're keeping things maintained, you have one vendor that you can pay to service things and keep everything maintained. The cons, I think, in my opinion, outweigh those pros, but again, people just have to decide what's best for them. The cons are that this can get quite expensive. Because it limits competition.

[00:09:39] So I just said one vendor like 50 times. Historically, when one vendor is the only one that's competing for work, they can do a lot of things that limit competition and, and sort of drive up prices. I think a lot of buyers historically are get a little bit sick of getting locked into a certain vendor.

[00:09:58] Which limits their [00:10:00] flexibility for doing things outside of the comfort zone of that vendor. I think the main thing that I would point to as a con though, is if we think about all the different parts of the stack and all the different potential applications that you might install for your buildings, where we're at in the industry right now is that there are the best of the best in each of those categories out there.

[00:10:22] And then besides the best of the best, You have 50 other people that say Me too, but they don't do that as their main specialty. And so when you buy from one company, you limit your ability to get the best of the best product in each of the different positions, I guess, in your architecture. And then finally, if you buy into the horizontal architecture, But then you buy from one company that sells you a vertical architecture, you're not really getting any of those benefits that we just talked about.

[00:10:51] Rosy Khalife: Okay, great. So pros and cons, we understand that makes a lot of sense. More cons you think than than pros. Is there kind of a middle [00:11:00] ground to all of this?

[00:11:02] James Dice: Yeah, I mean, practically, you know, most of our buildings out there in the industry right now, they all have systems that are sitting there today. So really what we're talking about is if you want to go in this direction, there's a, you know, transition period.

[00:11:17] And I think what most people do is they don't rip everything out and say, I'm gonna put in a horizontal architecture. Let's just start from scratch across my whole portfolio. That transition period ends up looking like, oh, we're doing a. Retrofit at building 23 right now. So when we do that retrofit, let's make that move towards the horizontal architecture in that building right now.

[00:11:39] And that's kind of how it works throughout the portfolio. So I think every building that we have is gonna be in this gray area between switching to this new architecture or sitting in the old one. And I think at each layer of the stack, you can also say there's probably a gray area at each layer as well.

[00:11:57] You don't have to go full or right away. [00:12:00]

[00:12:00] Rosy Khalife: James, who are some of the building owners that are actually doing this now?

[00:12:05] James Dice: Yeah, we've actually heard a, from a lot of them on the podcast over the past few years. So we've heard, uh, you know, several episodes from Google. They're probably the most outspoken about how this is the only way you get technology into their buildings is if you align with their horizontal architecture.

[00:12:22] We've also heard from Texas down in Australia. We've heard from Allianz over at Europe. We've heard from Monash University and Australia, and many more. I think there are, honestly, at this point, too many to count with just people that have decided this is the way that we're doing things from now on.

[00:12:40] Rosy Khalife: Cool.

[00:12:41] One last question. So in your opinion and what you're, you're seeing from the market, there's no way we would ever go back to the old way of doing things like, this is the future,

[00:12:53] James Dice: I think for large, complex buildings with, you know, large portfolios. I think [00:13:00] once, you know, once people start down this path, they're not going back.

[00:13:04] I think we also have to remember though, that there are, this is a complex. Stack, like we've, we've talked about a lot of complexity here. Buildings are a, a vast spectrum from what we just talked about. You know, very complicated, large systems, all the way down to your, you know, pharmacy on Main Street in a small town.

[00:13:22] And the complexity of the stack might, may not make sense for the pharmacy on Main Street to implement. So I, I, I think the answer is always like, it depends, right? It depends on the type of building, the sophistication of the building owner. I think most of the people listening. To this though, we're talking about the buyers and sellers of technology for larger buildings when we talk about this, this concept.

[00:13:47] Rosy Khalife: Thanks James. That was super informative. If folks wanna hear more or learn more about this, where do they go?

[00:13:53] James Dice: Yeah, so we're gonna release a horizontal architecture 1 0 1 guide, and I think it's something that we'll continue [00:14:00] to talk about more and more, and then we have a whole lesson. In our foundations course on sort of explaining this with all the pretty pictures and visuals that, um, sort of teach it to the newcomers among us.

[00:14:13] Rosy Khalife: Awesome. So we, we can find that in the show notes. Feel free to take a look and if you're a building owner and you're implementing horizontal architecture, we wanna hear from you, so please reach out. Thanks so much for listening.

[00:14:28] Okay friends, as we're trying these new formats, please let us know what you think in your podcast player right now, or on the episode page on our website. There's a link to a survey for this specific episode. We'd love to hear from you and we wanna hear your feedback. Also, don't forget to sign up for the Nexus newsletter or invite your coworkers and friends with a link below.

[00:14:49] Catch you next time.

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