Part 6: When To Go “Full Stack” (Navigating the Marketplace)

Hey friends,  

For years, we’ve been trying to make the smart buildings marketplace, AKA the vendor swamp, less murky.

To consolidate all the content we’ve produced on this, we’re publishing a newsletter series (and whitepaper) on navigating the smart buildings marketplace. If you missed previous editions, read those first:

• Part 1: The Pain for Buyers—on why Buyers need a strategy for vendor engagement
• Part 2: Do Your Homework—on how engaging the marketplace depends on where you are in the buying process
• Part 3: Thinking in Categories—on why and how to do category-first buying
• Part 4: Thinking in Layers—on why and how to think about your stack comprehensively in horizontal layers
• Part 5: Thinking in Properties—on how to create a shortlist by filtering down the list of vendors.

If you’re a Buyer, this series contains our best advice on how to make sense of the marketplace. If you’re a vendor, this doubles as a way to stand out from the competition by meeting Buyers where they’re at.

Part 6: When to go “Full Stack”

So far in this series, we’ve been operating using a paradigm that’s designed for our most complex commercial buildings and organizations.

As we described previously, these sophisticated Buyers have almost all standardized on buying “smart buildings” from different vendors rather than one that does it all. This approach compromises simplicity but prioritizes the values we’ve explored for years at Nexus Labs, including:

• Leveraging existing connected devices
• Maximizing flexibility and minimizing vendor lock-in
• Enterprise- and portfolio-wide standardization
• Extensibility to many different use cases for different user personas looking for different outcomes

But this series wouldn’t be complete without acknowledging that these values are only best for a relatively small subset of the market. They’re held by enterprise Buyers who own large portfolios of complex facilities, which is only about 2% of commercial buildings.

As you can see by driving around any town in America that doesn’t end in “-anhattan”, the commercial building landscape isn’t ONLY comprised of large portfolios of complex buildings (despite our industry’s focus on them).

The vast majority of commercial buildings are simple. They have very few connected devices, the majority of which aren’t complex, digital, or connected. The organizations managing them aren’t set up to buy or maintain a complex tech stack. They generally can’t afford a smart buildings consultant. They’ve likely never considered the possibility of their building being “smart.”

As we shared in our whitepaper The Untapped 87%, there’s a spectrum of complexity in the market. On one end, you have large portfolios of complex buildings where horizontal layers are typically prioritized. These are in the upper right corner of the graphic below.

In the lower-left corner of the graphic below, I’ve included two buildings in Boulder I’ve visited lately: Boulder Indoor Soccer (yes, my team won) and Repair Masters Automotive. Your town has hundreds or thousands of these buildings that we never talk about. These are simple buildings where Buyers need to buy a simple widget in a simple transaction with a simple installation and simple maintenance requirements.

Since we’ve promoted Thinking in Layers for the most complex Buyers, we also need to introduce Full-Stack Thinking for Buyers looking for simplicity. Each Buyer is looking for a different degree of solution complexity.

Full Stack Thinking prioritizes reducing the time to value, lowering the cost, and simplicity of installation and maintenance. It accepts that the solution is going to be configurable, not customizable… you have to make the available features work for you.

Full Stack Thinking acknowledges the likelihood of vendor lock-in and accepts that switching costs will be higher. It acknowledges that you might not be getting the best solution at each layer and that your stack might not be so flexible for future use cases.

So when should Buyers consider going Full Stack? Here’s a handy checklist:

    ☐ When just a few types of devices will be connected

    ☐ When just a few smart building use cases are applicable to them

    ☐ When just a few user personas will be using the data or application

    ☐ When there is very little existing digital infrastructure (devices aren’t digital, no established network and data layers)

    ☐ When you need to produce an outcome quickly to prove the business case

Buyers need to examine themselves and determine whether this is the right approach or just a tempting shortcut. As we’ve discussed many times, continuing to add new full-stack solutions adds unnecessary SaaS costs and complicates the number of screens and clouds your data exists in.

Vendors are in constant flux trying to figure out how to serve more and more of the map above. This is reflected in their product and go-to-market updates as they grow, such as:

• Simplifying their product
• Going through channel partners (such as property managers, contractors, system integrators, and manufacturer’s reps) who serve local and less sophisticated building owners
• Offering differing architecture options and pricing models to suit different needs

Recent Full(er) Stack examples from our Partners include:

• Verdigris has meter analytics software that is paired their simple-to-install electric meters.  
• 75F redesigned the HVAC Control stack for simple install and better software.
• Several FDD partners go through channel partners. Clockworks Analytics’ case study with LONG Building Technologies explains one such journey.

And this is just a quick sampling!  

Buyers, where do you sit on the complexity spectrum? Vendors, what are you doing to grow your TAM by making your offering simpler or more complex?

Send us a message… I’d love to hear from you.

As we build the Nexus Marketplace, we’re building it with the full spectrum in mind. Buyers (and their consultants) will be able to compare vendors’ stacks, compare their stacks to their peers, and filter by vendors that have traction in your specific building type.

Stay tuned for the final edition of this series, where we announce early bird access to the Nexus Marketplace!

—James and the Nexus Labs team