🎧 #172: Change My Mind: Metering vs. Occupancy Counting

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Episode 172 is a conversation with Tom Arnold from Gridium and Jess Horne from XY Sense.

Summary

Episode 172 features Tom Arnold from Gridium and Jess Horne from XY Sense in our latest Change My Mind Series. This series showcases lively debates where vendors and industry experts tackle tough questions, challenge assumptions, and defend their viewpoints on trending topics. In this episode, an expert in space utilization and an expert in energy optimization face off to debate: which technology category delivers the most benefits to building owners just starting with smart building technologies?

Mentions and Links

1. Gridium (3:30)
2. XY Sense (3:33)
3. BXP (31:30)‍
4. NexusCon (57:26)

Highlights

Introduction (0:50)

Intro to Tom (3:38)

Intro to Jess (3:56)

Making the case for Smart Metering (4:31)

Making the case for Occupancy Counting (16:07)

Challenges/Rebuttals (27:31)

Buying new meters vs new occupancy sensors (34:51)

How does this change depending on the type of building? (42:29)

How can this data be used elsewhere? (51:45)

Conclusion/Closing Statements (54:45)

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Music credits: There Is A Reality by Common Tiger—licensed under an Music Vine Limited Pro Standard License ID: S665556-16073.

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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Welcome to the Nexus podcast. This is, uh, the next episode in our change my mind series. We've done these three or four times in the past. It's been a little while. So, um, [00:01:00] as we lead up to NexusCon 2025, we're going to have a few more debates at the conference this year. So we thought it'd be a great time to sort of revive the podcast version of these debates.

So, um. We were just discussing before this hit record that we used the word debate, uh, pretty lightly here. We're not here to really fight about anything. I think we agree on 90 percent of what we're about to talk about, but it is just a, um, a fun way to discuss the nuances of the decision making process for building owners and they think about their technology programs.

So, I want to give credit to our participants who I'm going to introduce here in a second, uh, for sort of, um, volunteering to be part of this, uh, this innovative, uh, book, slightly awkward format that we're about to do. So here's what we're debating. Um, we're going to imagine an, I am an ambitious building owner or operator who has been tasked with improving and performance and efficiency across the portfolio of.

[00:02:00] Um, commercial buildings. We're going to just say multi use, but we'll get into the nuances of different building types, uh, at the end. Um, And we're going to assume that I've, you know, I'm a smart building strategist. I've taken nexus labs, smart building strategist course, shameless plug, and I've prioritized use cases, and now I need to help decide what to do first.

Uh, I have a limited budget and I need to basically, um, decide between smart metering technology and occupancy counting technology. So if I, if I go the metering route. Um, I understand that this would allow me to figure out which systems in my building are using energy, how much and when, and I know this can unlock different information and different decision making around easy upgrades, broken equipment, um, better controls to basically get the building's performance back on track.

Alternatively, I could also use the budget to install occupancy counting technology, and this would allow me to know how and when a building or space is being used. [00:03:00] And I know this can unlock, um, underutilized or overutilized space and information to help me decide where I'm wasting space and resources and how I can optimize maintenance and cleaning schedules around actual space usage counts.

With that mouthful, we're going to kind of jump into the nuances of, of where I might start with my program. Um, and so I have two absolute experts on this topic here with me today. So I have Tom Arnold, um, CEO of Gridium and I have Jess Horn, head of sales at XY Sense. Um, can you both say hi, starting with you, Tom?

Tom Arnold: Uh, hi, James. Pleasure to be here. Fun to debate this topic. And in an ideal world, you'd, you'd do both.

James Dice: You'd do both. Yeah. Yeah, we've, we've, we've put a key in every debate. You have to put a key constraint on the discussion and we're, we're saying we've got to start with one. Which one is it? Um, Jess, how about you?

Can you say hi?

Jess Horne: Yeah, it's um, thank you so much for having me and [00:04:00]you know, couldn't agree more, Tom. I was thinking the same thing, but I understand not everyone has budget for both. So excited to talk about this.

James Dice: Awesome. Um, what we like to do is start with an opening argument. So we've chosen Tom to go first here.

Uh, so we do all of our debates, but Tom, you're going to kind of, um, make the case for smart metering. And so you and I can, uh, go back and forth here. You can, you can start and I'll sort of ask you follow up questions to basically say, um, just start us off saying, why should, uh, uh, me as the building owner, why should I start with?

Um, metering.

Tom Arnold: Well, I'll anchor on your first position, which is I don't have budget for both. And, uh, if you don't have budget for both, you probably in an organization that has an ROI mandate or, uh, has to be a careful steward of the capital. And, um, in, in our experience, looking at meter data and especially putting analytics on that data, um, is incredibly hard ROI.[00:05:00]

That, um, can gain. Support ingredients for your future FM or other techniques that you want to do, but it's just an amazing quick win that helps you build credibility. And maybe you're new to the position. Um, and so that's what I'm going to anchor on in terms of my debate here. Um, I is, is really when you're starting, Start with something easy, and it's a win, and you can build from and that provides foundational analysis layers for future things.

So, for instance, if you think that there's an occupancy problem in the future, you might want to link that occupancy to changes in energy. But if you don't have the energy data. You, you're sort of grasping at straws in how to, how to actually create that business case. Um, and then, yeah, just to go back to the ROI gradient, of course, has very [00:06:00] strong ROI.

Lots of other tools do as well. And you'll find that that tends to be a big win in the organization.

James Dice: And when you say quick ROI, can you talk about how. You know, the user of the meter data is able to actually get that quick ROI. Can you give them some examples? Uh, and when I asked that, I realized I'm a little bit biased in my history as an energy engineer, so I know exactly how the data is being used, but not everyone listening to this, uh, is going to, is going to know how that quick ROI is being driven.

Tom Arnold: Let's talk about a few ways, um, to get to the ROI. The first is getting the data. And what most building owners don't understand is that they already have the data. It's trapped in crappy utility websites all across the United States. Uh, and what Gridium does is go out and slip that data down on your behalf.

Um, bring, we bring in the interval meter from [00:07:00] those buildings. We bring in the bill data, the rate data. And then the computer runs through and finds opportunities for you. And just one very simple example is we automatically detect the start time of the building. So you might have a building that is programmed for full occupancy and is starting at 3 AM.

So there's ready to go at six. Um, and you might be shocked to learn that is the case because today's work patterns don't really support that level of building operation. Um, so that's, that's an example of how we actually do this is, you know, automatically looking in the existing data layer, which is typically trapped in utility accounts is free to get.

Uh, put analytics on it, um, give it to an operator that can actually make action on those and then prove, prove the ROI. And then of course, because we have the bills and a rate engine, we can show you exactly how much you save by moving that 3 a. m. start to say a 5 a. m. [00:08:00] start. Which in any considerably sized commercial building is a big dollar number and certainly pays for the software.

Typical time for value for us, um, people are getting value out of it the first week they use the software platform. Um, and a typical onboard for us is less than 30 days. Typical ROI is two to three months. So, uh, very fast payback in terms of these solutions on the market.

James Dice: And that's one of the first, I guess, nuances of this debate is it seems like there isn't necessarily a need to go install a bunch of hardware immediately with, so when we say go the metering route.

You know, the really the first step is go figure out what meter data you already have and apply analytics to it. So it's not necessarily requiring a big hardware installation, a big hardware purchase up front.

Tom Arnold: That's certainly the way that the market is going. And even when clients come to me, James, and say like, Hey, I want to meter the.

[00:09:00] Um, the condenser loop, because I want to know how much all the IDF closets are using. I asked them, what decisions are you going to make with that data? I'm not going to make any decisions. It's their IDF closet. They can do whatever they want with it. Well, then why are you metering this? Are you spending money on that?

Yeah. Um, and that tends to be the, um, the natural flow here is it's, it's, it's very exciting to be able to meter lots of things, but I will tell you that. We've looked at tremendous amounts of tenant owned meter and landlord owned meter data, and it's largely ignored. The only time it really gets used is for tenant bill back or cost allocation purposes.

Um, just because you have meters all over a facility doesn't mean that you're actually doing anything with it.

James Dice: And what would be the criteria that someone would need to, like, go through decision making criteria? To say, I need to go beyond whatever I can get from my utility, the data that's [00:10:00] already there, and actually install new hardware.

Tom Arnold: There's, there's two real reasons that you do that. First is you're dissatisfied with the latency on the utility feed. So in, in many high renewable markets, like West Coast markets, East Coast markets, you're seeing exceptionally high demand charges. And of course, these tools help you predict and manage those demand charges, but they can be quite late.

That is the turnaround on the data can be, you know, 48 hours and it's not exactly real time. And so a lot of people choose to install main. Real time metering on the building level, because they want that instant demand read, um, so that they can calibrate chiller operations, central plant operation to the demand charge.

Um, and the demand charge, like in a typical California office building is 60 percent of the summer expenses. Yeah, it's enormous. So, um, that's one reason is you're, you do, you're dissatisfied with, [00:11:00] uh, the latency or other dimension of, of the utility feed. The second dimension is, yeah, just to go back to what I was saying is, are you going to make a decision on it?

Um, are you actually going to use that data to change the way that you operate something or make a large capital decision? Um, then meters are pretty inexpensive. You can get revenue grade meters. You can put them into a control system if you're bold, or you can just get them out to a flexible platform as fast as you can.

Um, and of course you, it's very useful to, to, to, to look at that. I try to ask questions to clients about why not just temporarily meet or something. You know, we, we do energy audits all the time and we take spot readings all the time. And that's a very good idea on thing, uh, on what's actually being used in terms of energy.

Again, if you, if you want to push this metering layer down into the [00:12:00]facility, what are you actually going to do with the time series data?

James Dice: So it seems like me to try to summarize if you were making the case for what to do first in my program, it seems like you, what you would say is, um, start with your meter data that you already have your utility date utility already has.

Um, and then, um, analyze that with analytic software of some sort if you need installed temporary meters. And then if you want to go beyond that, because it's going to help you make ongoing decisions, then you would install a permanent. Um, IOT or smart meters from there, is that sort of the,

Tom Arnold: yeah, I think that's the right, the right recipe.

And just to return to the debate, um, the thrust of my argument is walk then run. Um, and if you don't have a system that, that monitors the whole building load and [00:13:00] deals with issues of rate and demand charges and bills, and really helps you understand when and how are you using energy, You can't really do any interesting downstream exercises from that, and it might be a surprise to know that most buildings in America do not have this technology, you know, it's available for a few hundred dollars a month.

There's no hardware costs associated with it. There's, you know. A selection of three or four players that are credible in the market, including Gridium. You can go pick your favorite one, um, and it's typically available on, you know, month to month basis. So it works with commercial real estate. So that's where I think the bulk of the market is.

It's very interesting to this, to study people that have gone, of course, a lot further, but the bulk of the market is just has zero visibility. They get a utility bill from their accounts payable and that's about it. Uh

James Dice: huh. [00:14:00] Okay, and what you're describing that comes from the utility, just so that people understand, is your utility generally has already invested in some sort of, um, automated metering infrastructure, like every 15 minute data, so they can see what your building is using at the whole building level.

You're just talking about pulling that and making it usable and making the analytics and insights from that data. Available for the building operator to use.

Tom Arnold: That's 100 percent correct. 85 percent of the United States is in a utility district served by automated metering infrastructure or AMI. Um, that data is freely available, um, through utility portals.

Those utility portals are of course built for residences. So they don't take into account, uh, the fine tuned operations of commercial buildings. We take that data, plus the bill data, plus the rate data, weather, occupancy, other types of, uh, [00:15:00] uh, data and produce an energy management as a service software that helps people take action on the diagnostics that we find.

James Dice: Okay. All right. I think that's a great opening statement from Tom. Um, I think I'll, I'll summarize it just a little bit further and saying like the crux of your argument is around, you're not spending barely anything and you're getting, you know, immediate, pretty much immediate payback in most cases through this analytics that you didn't have before.

Um, Makes perfect sense. All right. I'm going to stop you there, Tom, and, uh, we'll save whatever else you had prepared for the future parts of the debate here and go over to Jess. Jess, you're not having any sort of rebuttal or save that. You're basically just saying. You're laughing at me. I'm trying to make this a serious thing.

Jess Horne: Okay. I'll be very serious. [00:16:00]

James Dice: No, we can laugh. It's fun. Um, you're giving your case for occupancy data, and then we'll go through rebuttals after this. So go ahead.

Jess Horne: Okay, awesome. Well, I mean, I will point out that it sounds like we both have a real time component. So that's something that at least, you know, is the same in both of our offerings.

Um, for anyone that's not familiar with XY sense, we do offer a real time occupancy sensors and workplace analytics. And there's so much that you can do with that. Other than just getting, you know, occupancy, um, analytics. And we'll kind of talk about that. Um, you know, first I will say that anytime we're working with someone, whether there are, you know, new customer existing customers, it's really first understanding their use cases.

And I have to bring this up just cause there are so many. different use cases, and there's different ways to have both hard [00:17:00] ROI that we can prove very quickly. I mean, depending on their use case, um, and then other even intangible kind of ROI like employee experience. So there's really kind of two different sides to it.

Um, I will talk about a couple of like the most common, you know, use cases in the hard ROI, Um, you know, I do have to point out, I mean, obviously there's, I mean, there's no secret. We do, we sell occupancy sensors. That is kind of the means to the data. So you do need that, you know, to, to get the data. But, you know, really understanding the use cases can cut down on some of the costs.

Because you may have some of our customers will come to us and say, you know, I have, I need to cut 20 percent of my real estate. And I know that, you know, these, this, you know, these buildings are kind of our, you know, primary sites. They're not going anywhere. So we still want to cover them. We want to really understand how the actual space is being used.

But then we have this others that may be 20 percent that. [00:18:00] We probably will be getting rid of, but we want to make sure we have the data to back it up. So instead of just covering it with sensors, we have a complete sensor suite. So you could look at that and say, well, let's do entryway sensors. So at least we're getting real time people count.

Um, so then, and you're getting that accurate count to be able to say, you know, and you may only need that for, you know, three to six months or so, um, to be able to show, yes, we do need to go ahead and, you know, um, shut down those offices and that, so that could end up being some very quick ROI for you. Um, most of our customers, they want to really invest in, you know, the entire technology suite integrate with other smart building integrations.

Um, you know, a lot of times what will happen is then, you know, for those primary, um, locations, they will cover it with. Our area sensors, entryway sensors. We have present sensors. Now they're getting all the real time data. What they're doing is a lot of times [00:19:00] they, you know, they want to integrate with their smart building system.

So we actually can integrate with each back and with lighting. So you can cut down, but you need that occupancy, real time occupancy data to make those calls. So that's something we actually had a company that has saved over 3 million a year, just integrating with those and then not having to, you know, heat or cool areas or have lighting in areas that weren't even being used.

Um, so that's actually a big thing as well. We have a lot of companies that, you know, use the data to then. Completely remodel their space. Make sure they have the right types of rooms, um, for their employees. And they also use it for internal debate. So kind of talking about debates again. We all know in the office.

A lot of times what happens is, you know, someone will come a department head. We'll go to the, how to real estate. I need more space and either it could be a, they look at the, you know, occupancy data and say, actually you don't need any more space. Like according to, [00:20:00] you know, your occupancy rates, like you're not, you know, you don't need any more space or.

If they do, they can look at other departments that maybe aren't utilizing it as much and then say, well, let's see if we can actually take some of that space. We've had other customers. We have a financial services customer that did this and saved 1. 6 million annually because instead of having to like, um, build out new space, they were able to just use existing space.

and use their, you know, existing occupancy data. Um, we also, I mean, we have customers that lean into like cleaning as well. So that's another quick when, um, you know, that you can use this actually to clean spaces that are not being used. Um, we, we now send like text alerts and things like that to, you know, notify you.

So those are like more of like the hard ROI. Cause I know that that's really important, especially if you have a tight budget and it's like, listen, you know, I'm going be able to go back to my CFO and say, Hey, we invested in sensors. This is the ROI we're getting. [00:21:00] Um, so that's, you know, really important, but to be honest, there's a whole intangible piece of this with employee experience and wellness that we're seeing a huge increase in it's hard to put hard ROI on that.

Um, but a lot of our, you know, customers are integrating this so that, you know, there, there are still RTO mandates coming out even now, which is crazy. Like five years after COVID, we're still, you know, talking about the same things. And, you know, now when employees do show up to their office, you know, they want to make sure that.

Um, you know, it's for collaboration. It's for, um, to make sure they have the right space available. They have a great day. So they want to be encouraged to come in more. They want to walk up to a real time, you know, kiosk display and be able to choose spaces that are available. Um, you know, Some customers are integrating with indoor air quality.

They want to kind of empower the employees of like, I want to choose this desk because you know, it's, you know, there's [00:22:00] not a lot of noise around there. It's, you know, cooler in this area and it's just a healthy environment. So they're really empowering them with that as well. So I know that was, you know, that was a lot, but there's just so much that we have so much fun in our jobs of being able to really kind of hone in on different use cases and how our customers are Using, um, you know, our real time sensors to get, you know, the data and the integrations they need.

James Dice: Thank you. So when I think about, um, as a building owner and I'm thinking about getting started, you know, when Tom sort of laid out the path of metering, there was sort of this like, I don't have to spend very much money getting started step. You guys are obviously a sensor provider. And so what you're talking about is a bigger upfront cost with buying the sensors, installing the sensors, et cetera.

So if I'm thinking about heading down the space utilization road, is there a sort of no cost, like use existing data step that's even possible here, or is it typically just [00:23:00] focusing on, um, getting sensors where I need to get them to answer the questions I'm looking to get answered.

Jess Horne: I mean, it can be a hybrid approach, but to get the granular data that we provide today, at least, you know, we're always looking into other options.

But today you do need sensors to be able to get that. That's what I was saying in the beginning of kind of sitting down is we don't necessarily have to say, listen, you need to invest in every type of sensor we have in all of your spaces. You know, it doesn't have to be that. Yeah. We do offer different pricing models too, so that there is more of an upfront cost, but less, you know, year over year.

Um, but it is, I mean, there's no really skirting around that, is there is a cost to actually get the sensors, to get the real time data. Um, you know, but I mean, if you're getting the RLI of, you know, I, I, Talked about a couple of examples. It could be a couple hundred thousand dollars a year up to like some that are on the, you know, bigger side saving like 7 million in [00:24:00] real estate.

It just depends obviously on your use cases, what's important to the company, what their initiatives are. Um, you know, what they need to integrate with. Cause I've seen a lot more smart building, um, initiatives where it's, you know, they're wanting a full ecosystem and everything to be talking to each other and cutting down costs, you know, that route as well.

James Dice: Yeah, that makes sense. Um, we had, um, uh, an RFI that we, that we went through with, um, BXP last year where they were looking at, um, They were already looking at turnstile data for their biggest buildings. Um, essentially, you know, it's just a very, um, not granular sort of big picture. This is a big high rise.

Here's generally how many people are using it on a day to day basis. But they were looking to get into sensors to figure out what questions that wasn't answering for them. And that's where it seems like the crux of this decision for me as a building owner would be is like, what [00:25:00] questions am I trying to get asked?

Is that, and I'm hearing that from you too, is like, it really depends on what questions I'm trying to get asked. If I'm trying to close down that building over there. Well, validating that seems like a pretty high ROI decision, like that kind of thing. So, so that's really, it seems like, um, educating me as the buyer, it requires me to sort of, you know, come to the table with like, these are the questions I'm trying to get asked.

And if I'm thinking, if, if I'm, Coming to you with that, Jess, what you guys normally do then is to say like, here are the quickest hitters that we can help you with. Exactly.

Jess Horne: And we, we take the crawl walk, run approach as well. It's typically, you know, it could even be a pilot. It's like one site, you know, it's kind of to prove the ROI before there's further expansion and unlocking, you know, more budget too.

So we understand that. So ROI is very important. And to your point, you brought up badge data, which. Every company I've worked with, I mean, they're [00:26:00] collecting badge data, but they also know that it's not that reliable. And it's not that accurate. It's very manual to actually pull and actually analyze the data.

So that's where I talked about even just entryway sensors. So there's just, we really take, and that's why we have an amazing customer success team too, and really to work with the customer. We'll use a lot of examples of, you know, how we're helping customers today, but. You know, it is a journey and it usually starts with just one small step and we'll help you with that.

Um, and then kind of expand from there. Most customers don't just go all in with all, you know, integrations and use cases at once, but you know, over the journey, the customer journey, they definitely, um, you know, add more, we help educate them and, and show where they could be unlocking more money.

James Dice: Yeah. Okay.

Um, thank you. Let's go into sort of talking specifically about the other side and why your side is better than the other side. And what I think probably makes sense for us to do is sort of level set [00:27:00] here, Tom. So you talked about obviously the first step. I think it makes sense. And I'm, I'm the decision maker.

I'm the. The person with the budget, I think what Tom's saying around, like, yeah, you could spend no money and basically get started analyzing the data that the utility has for you. Great. I think that. Makes sense, right? It's good. It's always gonna make sense to sort of not. No, you still gotta pay gradient.

But yeah, I still gotta pay gradient. Yeah, it's a smaller modest upfront cost. Yeah. And and so I kind of want to like level the playing field because from from the occupancy data side, there isn't really that like, Very low cost. No cost. First step like there is on the energy side. Um, so let's just say there's there's badge

Tom Arnold: and turnstile data, which is which is analogous.

Unfortunately, our experience and just you probably have the same experience is the data doesn't really show you very.

Jess Horne: Yeah.

Tom Arnold: Yeah. And when it does show you [00:28:00] something, it just makes you cry, um, because the, the, the history and structure here is one where the landlord owns the building. In your example, BXP, they own the building, um, tenants have all kinds of patterns.

Um, the landlord controls the equipment. The equipment has operating procedures governed by a lease. Um, and the, the, the sad truth of COVID. Is that it totally empty buildings, uh, ran perhaps 10, 20 percent lighter than normal. Um, and in fact, the most noticeable effect was that they increased their gas usage because we weren't heating them with our body.

Jess Horne: Oh, interesting.

Tom Arnold: And, um, that's, that's the, that's the sad reality here is our industry. Blows air at the same rate into, uh, into vacant spaces as occupied spaces. And it's [00:29:00] very difficult to imagine how we're going to get to our net zero and energy efficiency goals if we, if we don't fundamentally change that, but, but adding more sensors right now, um, to a TI space is not going to change the way the landlord runs the building.

Um, and in fact, there are other barriers here, which I think, you know, building, uh, HVAC professionals will experience, which is most of these towers still have 30, 40, 50 percent pneumatic space. So even if you wanted to change the air conditioning in an unoccupied space, you don't have the ability to do it at the zone level.

So then what are you going to do? Shut off whole floors? Um, even that doesn't seem, uh, reasonable. So, um, I, I agree with Jess that there's a, there's a long history of using Occupy data in space planning, um, markets. Um, and it has huge ROI because it teaches you to produce the space that you want to produce from, [00:30:00] um, from real data.

And I think, uh, your innovation to add real time to it is awesome. Um, but that doesn't answer the question of, of a smart building professional in a multi use commercial building, uh, scenario deciding that this is, this is their anchor project that's going to advance their career. Um, I worry a lot when I see those requests, especially from young professionals, because I worry where they're going and what the benefit it is that they're actually going to see.

Jess Horne: Well, and we typically, we have, I mean, there's been a few owners that we've, you know, worked with, but typically we're working with the tenants cause they're the ones that are actually wanting to know. You know, how their space is being used. That's, you know, that's typical. Um, so that's something to just keep in mind as well.

And say,

Tom Arnold: have you ever worked with both? Because isn't that the opportunity for our industry? Um, you know, both parties view the other as [00:31:00] complete black box. And if yet both of them had the available this data available to them, they would make better decisions together. We see that on the metering side.

We have a landlord and a tenant that both share their meter data with each other. And it's fantastic. The landlord runs the base building, the tenant runs their equipment and they make better decisions to that get together because that data layer is exposed and maybe I'm optimistic or pie in the sky, but, you know, imagine if BXP had.

Uh, you know, occupancy level data for its tenants, how it would run the building differently.

James Dice: And that's exactly what they're looking at. I don't want to act like BXP is farther or not as far along as we're making them sound. That's exactly where they're headed with it. Um, it seems like they're on a very innovative path there.

Jess Horne: Yeah. They are for building owners for sure, because I, it seems like what [00:32:00] happens sometimes is You know, the building owner, you know, they want to maybe invest in like, you know, entryway centers, cause then they can get at least that, you know, people count floor by floor real time analytics, but then they kind of so far, which I agree with you, Tom, I think there's an opportunity to like work together closely, um, but where.

You know, if the owner and the tenant actually worked closer together, you know, that would be great. There is an opportunity, but it doesn't seem like at least since I've been in the industry, I haven't seen where those lines have crossed too much. It kind of seems like from the owner perspective is like, I want to know the people count.

And even that isn't as much like BXP is ahead of their time. You know, typically it's like, we're just going to let the tenant do what they want. And we'll kind of leave them alone from there. Now the tenant does sometimes then use this to say, Hey, we need less space or we need more, or we need, you know, indoor air quality.

Hey, you know, your air in here is not [00:33:00] as great.

James Dice: And I think this highlights the role that, I mean, The hypothetical role that I'm supposed to be playing in this debate, which is I'm the smart building champion. It's on me to go into the organizations and find who's the user, who are the stakeholders that I need to engage here?

And how can I make this work for whoever those use cases, like whoever those use cases are assuming is going to use this and benefit from it and hold it back. And all of those things, the smart building champion is really the one that's going them between all these different parties and. smoothing these things over versus just, um, implementing technology and a silo on the landlord side, or it's a silo on the tenant side.

Um, Maybe I should have, maybe we should have added that to our debate brief at the beginning here. Um,

Jess Horne: Well, maybe as part of the, I guess from a debate perspective, so you said you had budget, so then I would say, great, like, let's figure out your budget and [00:34:00] see how we can work together. Within what we're offering.

And even if it's a little less than you initially were hoping for, if we can prove the ROI and unlock savings in other areas, then we can look to expand this. So there's obviously budgets, at least you've given us that.

James Dice: Yeah. I mean, that's another skill of the smart building champion, right? We talked about ways to get quick savings, right?

Can you get those quick savings and then snowball those into a bigger budget to then do the next thing and the next thing? Um, Can we talk a little bit about where, so say we get past the low cost, no cost stuff, I'm, I'm trying to create a little bit of a debate around, do I buy new meters or do I buy new occupancy sensors?

What are your guys's thoughts there? I heard a little bit from you, Tom. If you want to start around decision making criteria on new meters, but what [00:35:00] about deciding between new meters and and occupancy sensors? Um, and one way that we're confusing each other and everyone here a little bit too, is that.

We're talking about different users and different use cases a little bit here. So an energy manager is going to take a new meter and do something a space planner is going to take a new occupancy sensor and do something. So we're kind of crossing those, but generally let's assume when we're talking about these, that in my organization, I'm the smart building champion and I could go engage my energy manager, or I could go and engage my space planner or my tenant, et cetera, you know, so it's, it's a hard question.

Tom Arnold: It is a hard question. Um, go back to my original proposition was, you know, which is it depends and why can't we do both? Um, look, if you're, um, you've used commercial or mixed use or multi uses as the framework here. And I [00:36:00] think that if you really don't have deep penetration of the BMS in that building.

And you don't know where the energy is coming from and you're trying to find that. I think the energy manager is going to have a good Um, case, or if you're in a vertical, like life science or medical manufacturer, or, or these mixed use campuses where you, where we see very high energy densities in one part of the facility, um, like a lab or yeah, people experimenting with AI, et cetera, et cetera, then you, then you should get, um, additional.

Um, metering, it's kind of beholden. Um, it's incumbent upon you to understand how the facility works at a base level. And if you're still grasping at straws, you're not going to be able to really formulate your system strategy in the building. Um, I think, um. With regard to the independent data layer, I think everybody should know [00:37:00] what that correlation is.

And Jess, I don't know if you do this, but we study this from time and time. We look at parking lot data versus occupancy. We look at badge white data versus energy. We look at, um, uh, any number of correlates. And I tell you when, when we show people the, the regression analysis. People cry of occupancy data versus energy consumption.

Yeah, they just cry. Um, the building owners and managers association serve on the chair there. And, and, you know, they, they have published lots of rules. And one of the longstanding boomer rules is that half your energy is fixed. That is, it's just the base building, uh, use in the, in the building and half of it.

Is variable. And, uh, COVID showed that that was completely wrong. Um, uh, the reality is, and the sad reality is, um, it's all fixed. You know, there's maybe a 10%, uh, variable, maybe 20 if you're really lucky, and [00:38:00] have full DDC within Really nice. Um, G36 sequences and setbacks, maybe you get to 20. Um, but the reality is these, um, these buildings run, they just run.

And, um, I think people should understand that before they go sprinkle sensors everywhere, because again, if you don't really understand that you don't know the problem you're attacking, you, you, you're not saying, um, I'm going to collect this data and make decisions on it. You, you've got to say. Currently, our building does not respond to occupancy.

I want to put occupancy in so that we might have an energy response, um, to occupancy in the building. So, um, that's where I would go here, um, from the spend analysis. And again, I, I'm trying to separate like the building owner concerns from space planning concerns for a tenant, which I totally get is a totally different thing.

But if you're a smart building professional, you're probably at the [00:39:00]building level of analysis of how do I, how do I control this thing called a building and how do I make it as efficient and as smart and responsive to its occupants as I could.

James Dice: Okay, Jessica, you go ahead and feel free to take the tenant landlord.

Uh, into account as well.

Jess Horne: Yeah, of course. So, you know, what I would say, I mean, of course, I'm always going to say move forward with occupancy centers, but it's really because you're not just getting that. So if energy management is also important to you. We have an aspect of that. So if that's something that's part of it, you're getting not even a two for one, probably a 10 for one.

Just, you know, getting back to like what systems you want to integrate with. You can integrate with BMS systems. You, we have a lot of customers that end up taking different sources of data and actually, you know, putting them all into one dashboard to really be able to. and compare, you know, the [00:40:00]different, um, different types of data that's coming into a building.

So you're not just get, I know, like, you know, just from the name occupancy sensors, like, yes. Okay. Occupancy data, but there's so much more if you want to cut down on your energy and lighting. Great. You know, we have real time sensors to help accomplish that use case. If you want to cut down on even your.

Um, food and beverage. Um, we actually have a customer. This is kind of a niche use case, but it seems like anytime I talk about it, people get excited because they hadn't thought about it. But they actually put sensors all over their, you know, cafe areas, pantry areas. And they actually, um, every week their head of food and beverage gets an email showing the actual occupancy from the previous week.

So then he. orders is food based on that. Um, so there's so much more versus just, you know, it's easy to say, Hey, put some, you know, put some sensors into a building, you know, and the reality is they may see the data and cry like you said, Tom, because they're like, wow, we're still at [00:41:00] 20 percent occupancy.

Like This sucks, you know, that, that's just, that's the reality. But that's why it's just a much deeper conversation of, it's not just the occupancy analytics. It's also integrating with IWMS systems or room booking systems, smart building systems, you know, and using it for these different ways. So that's what I would say is you're going to get more from

James Dice: it.

I think this highlights one of the challenges in our industry. If I were to actually choose between different technologies. I need to go to those individuals in my organization that this is going to affect and like start to figure out the exact ROI or exact benefit analysis for each of these based on how it's going to affect their jobs and then like rank them somehow.

And that analysis is actually just really Difficult to do as we've sort of been exploring. So all of the smart building champions out there that that's the job right now is basically going out and deciding all of these [00:42:00] things. Um, and, and really ranking your use cases based off of how. Much they're each are going to benefit the organization from a business standpoint.

Um, let's move on here with a few minutes left and discuss like basically the nuances of different types of buildings in this discussion. Um, so we've been centering around offices. Tom, you just mentioned a little bit around labs and university campuses, that kind of thing. Um, can you guys talk and Jess, you can, you can start.

How does this discussion change when you're talking about different types of buildings?

Jess Horne: Yeah. Well, you brought up labs, um, which is actually, I mean, that's where we're very highly deployed within a lot of our customers and in their lab space. So it's actually a lot easier. Lab space is one of the most expensive types of spaces out there.

And it's, um, you know, one of those that has to be highly monitored. And so in some ways, it's easier to get quick R. O. I. And those types of [00:43:00] spaces just because of that. Um, you know, it's different. Like we do have some, um, higher ed, you know, some universities and some customers in that sector. Ironically, they have labs, too.

So, you know, even though I know, honestly, a lot of the use cases are very similar with them. Um, you know, otherwise, if it's Yeah. Some of the customers we've worked with, where they, I kind of brought this up in the beginning, where they have just different types of buildings, right? You've got kind of like your, your class, a, you know, headquarters or, you know, a regional office.

And those are really important versus, you know, maybe you have some like satellite offices that you're just not getting people coming into and you want to have some quick data and then, you know, be able to prove that you need to shut those down. You know, that's. A little bit different ROI than like I said, the lab space where, um, those are highly coveted, very expensive, um, and highly monitored.

So I have found that it's easier to [00:44:00] kind of show the ROI in those spaces, but we really just focus more. I mean, we don't, it's not a lot of like mixed use and things. I mean, with us, it's mostly just, you know, office buildings and. You know, you know, if it's just different verticals, obviously, but it

James Dice: makes sense.

Tom Arnold: Um, what about you, Tom? Yeah, our, our customer base is, uh, largely office, uh, life science, medical office. Um, again, a scattering of hospitality education, but that's, that's most of the, um, uh, market for us. And of course, most of those buildings are investment properties. Um, there's a landlord, uh, tenant relationship.

We do have, uh, corporate campuses. And in fact, we, we share, uh, clients. Um, uh, together that have deployed both of these technologies. Um, and you know, that's the dream you want. You want both, uh, working, uh, together. It's not what you set up as this debate. Um, but that that's tends to be where we see this technology co located.[00:45:00]

James Dice: Got it. And let's both, let's talk about from the standpoint of both of these technologies, the nuances of that we've, we've, we've talked about it a little bit, but the landlord tenant arrangement, how does that affect the decision making and, and on this, this, these two different technology categories and how I might go about purchasing it.

I

Tom Arnold: mean, this is changing, but you know, essentially landlord's business for 200 years has been to sell you a concrete box. And you do whatever you want with it and, and build it out. And then, you know, part of the lease negotiation is just this number, uh, which is the TI allocation that you get. And, and so, um, it's been very rigid around its bill of building rules and regulation, the lease governs everything.

And then of course, landlord don't have any real agency in, in operating costs. They're just pass through mechanisms. Uh, and so it's very difficult to capture savings because. Say the, [00:46:00] say BXP is very interested in installing, you know, we're going to do something simple. We're going to put occupancy, uh, trackers in every tenant conference room and we're going to cut 3000 CFM to 200 CFM if nobody's in the conference room.

Like dead, brain dead simple. Um, would be supported, uh, from an energy payback alone. If they do that and bear the capital expense, it's the tenant bills that go down. Um, and, and that's why, of course, you see every conference room in America walk into it as the first person and it's blowing 3, 000 CFM. Um, and, and that's a tragic loss from an energy perspective.

So, but, but that is the market. 85 percent of buildings in America are investment buildings. So unless our industry figures that out, and of course you mentioned some progressive leaders, um, that, that are looking at this, unless our industry figures that out, that's what it looks like. Um, [00:47:00] which is, again, you can install all the systems you want, but unless you have control of that.

Uh, box that, that feeds air into that conference room, you're, you're not going to get the ROI. And if you, the landlord put it in, your tenant's going to get the ROI, you know, could we be, for instance, as an industry saying, Um, this is what we, this, these are recommendations that you want to see it build out, you know, that would make a massive difference um to the energy use and That linkage between landlord systems and, and tenant, uh, systems.

So that's, that's what we see is, uh, as a sort of this, the state of play in the bulk of the market. And it's so tempting as smart building professionals to think about the gold plated tech campus where you have unlimited budget. But if we're going to grow this industry past, you know, a few thousand buildings into hundreds of thousands, we've got to be.

Just deploying thinking like that.

James Dice: Yeah, Jess, [00:48:00] how does it affect on your end?

Jess Horne: Well, it's very different because of their priorities. So they want different analytics. So that's the biggest thing is, you know, the landlord and it's a lot what you said as well, Tom, you know, the, the landlord really would just care about overall occupancy.

They're not necessarily caring. I mean, if they have a tenant in the whole space, they don't necessarily care how the space is being used. They just want to maybe have an idea, an overall, like a big picture idea of how many people are coming into this space. you know, for the day. Th and also sometimes there a safety component.

I've a couple of times where t many people are on like e just for a safety perspec you know, found with working with building owners is they also, they aren't sure, you know, by adding this, that necessarily they're going to be making so much more off the lease. So they're like, we're just going to let kind of the tenant, you know, take that [00:49:00] fee and kind of see what they want.

But for the tenant. You know, it's very important because, you know, for many, many reasons, but they want to know which spaces are being, do they have the right spaces and they need to, they can find that out by knowing like which spaces are being used, do they need to, you know, work within the landlord to say, Hey, we're going to be remodeling, you know, and we're going to be doing some other things cause we're not, you know, we don't have the right space today.

Um, yeah. If they're integrating with, you know, HVAC lighting, they're the ones, you know, that want to save the money, not necessarily the landlord. So it's just very different priorities. Um, and so it's, it's a completely different conversation.

Tom Arnold: One anecdote, just to sort of like, uh, put this, uh, in encapsulate it, you know, we do a lot of chief engineers and chief engineers, of course, get dispatched for these problem hot and cold calls.

And, um, a chief recently, They have terrible south facing, south, uh, facing glass. He [00:50:00] always deals with winter hot calls in this, uh, uh, side of the building.

James Dice: You're saying that as the sun's going down in this room that I'm in right now, and I'm suddenly getting hit by sunlight and I'm now hot. You're like saying, this is a perfect time for you to say this.

I'm like, oh man, I'm hot. And, um,

Tom Arnold: he's like, you know, we told them to put DDC in their TI budget and this would go away. That is, you know, to digitally instrument the air, uh, in that building and then, you know, and they left the pneumatics in there and they wanted to do the cafe instead. And, um, and now they're suffering the consequences, but that story is told over and over and over again in, in commercial office buildings where, um, uh, there was a set of money available and, you know, people don't use it for.

The, uh, the problems that are chronic and will affect their comfort in that space. Um, they, they use it for, you know, the nice, [00:51:00] uh, the nice build out and the cafe and everyone has their own priorities, but that's the conversation that's broken. And so this, this tenant landlord split is huge. Any smart building professional that works in multi use buildings will be very familiar with it.

And if you're not your first project, you'll, you'll encounter it.

James Dice: Totally. Um, I want to close off with one last question around, you guys both have software applications that, um, you know, occupancy data gets installed through sensors. That data then goes into the XY sense. Software application, um, meter data, whether it's installed by, uh, you know, comes from the utility or comes from a smart meter, that data then goes into the Gridium software application.

Where should I, as the building owner, be thinking about that data going outside of your guys platforms as well? So I'm asking you about integrations and how can this beat data be used elsewhere? And how should I be thinking about, um, calculating the ROI of [00:52:00] having that data go somewhere else, wherever it is.

Does that make sense?

Tom Arnold: Yeah, I mean, from our standpoint, we're, we're energy nerds, so and I think it's not energy. We have a, uh, API, we push it up and whoever wants to use it can use it. So, for instance, say that, um, Jess's system was able to reduce air changes in a, um, in a given space that is less occupied.

In our API, we'd have the average rate, um, uh, for that time period. Um, and they could make an A. P. I. Call calculate, you know, you see FM did, uh, K. W. H. As long as you've got enough mechanical information and calculate an R. O. I. For that, um, for that. So our sort of boxes to sort of, like, collect and diagnose for the.

Uh, energy professionals in the building, uh, but of course there are other stakeholders here and that's why we have an open API, uh, for other people to use

James Dice: as well. And you're, you're talking specifically about the utility rate during that time period. That is [00:53:00] correct. You then would feed that somewhere else.

Yeah, because it can be three to four X difference depending on

Tom Arnold: what's going on. And if you, if you're able to affect the, uh, demand charge, it can be like 10 times difference. Mm hmm. Um, so that might be really important for you and really help you justify occupancy sensing technology.

James Dice: Totally. What are you thinking, Jess?

Jess Horne: So with ours, there's a couple of things. Um. you know, we try to ingest as much data as we can because we also understand that not everyone wants to have to go to, you know, several different dashboards. So currently we ingest indoor air quality data and some meeting room data if it's through like Microsoft or Google into our own platform.

So it's really cool to be able to compare One of the most powerful things I love to show, um, is you can actually see the actual occupancy based on how many were in, were in the meeting or how many had were in the meeting invite. So to see how many were actually in the room versus in the invite, [00:54:00] which is really powerful.

So we do try to do that. We also understand, you know, there are a lot of companies out there that. will kind of normalize the data and put it into their own dashboard that's pulling in a lot of different building management, um, you know, analytics, not just occupancy, but also indoor air quality. Also, you know, energy consumption, um, they could, you know, integrate with, um, I mean, kind of anything from the building level that they're wanting to track and have in, you know, one system.

Um, we have companies we work with, you know, that as well, we do have an open API. So, you know, we, integrations are a part of pretty much every conversation.

James Dice: Totally.

Jess Horne: Yeah.

James Dice: Cool. Um, Just to close this off here, I think we know, and the community knows that the answer is probably both right. Um, I did want to, like, make sure we concluded with that.

Um, it sounds like maybe just I'll summarize what we're talking about here. What we're asking the building owner to do [00:55:00] is go out and engage their organization around. How each of these would play and how they might prioritize, you know, different phases of, of each of these different technologies and different buildings.

Eventually we want to get to the, where every building has full occupancy data, full meter data, and the analytics that come with it. So, uh, that's where we're at right now is figuring out how we get to that point. Um, anything that you guys want to add?

Jess Horne: Yeah, I mean, of course, I agree. And we should definitely talk more, Tom, see how we can, you know, work together.

Um, but if I had to, I guess if I had to have my debating hat on and kind of my, you know, closing statement.

James Dice: Closing statement. Alright, great.

Jess Horne: Closing statement would be that You know, at the end of the day, these buildings were built for employees and for people, you know, to, to be able to come in, to collaborate, you know, to have the spaces that they need to be the most productive.

And even though that is also one of the more intangible ROIs [00:56:00] at the end of the day, that's why they were built. So it's so important to have that employee experience, employee wellness. And the only way you're really going to get that is if you know how your spaces are being used. So, Go with occupancy sensors with X, Y, since

Tom Arnold: my clothes, my clothes is I'm thinking of a customer just down the street here in Mountain View, um, that we share and that's what we should all be striving for is someone that deploys, you know, advanced metering analytics.

As well as occupancy tracking, um, and I hope that's the vision of what our buildings look like in in in the future. And it doesn't matter where you're approaching this from an energy perspective or an occupancy's perspective. I think it's always good to start with the data that you already have, um, get your head around the problem 1st, whether that's, you know, getting your utility meter and understanding what the utility is trying to tell you, or your existing occupancy data, Get your head around that [00:57:00] and then pick a path.

James Dice: Totally. All right, you guys, well done. Thank you for participating in this. I know it's awkward, but it's also really fun. So appreciate you both. And, uh, maybe we'll, we'll see you.

Tom Arnold: Thanks to the editor, whoever it gets to edit.

James Dice: Yes, yes, indeed. Editing is key for a quality podcast and a quality debate. Um, so we'll see you both, I hope, at NexusCon where we'll hope to do more of this style of fun, fun conversing.

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