ASX-listed IoT company Buddy wants to be Fitbit for buildings

Prior to creating an "end to end" IoT solution for simplified resource monitoring, former Microsoft executive David McLauchlan thought, "What if Apple or Tesla were to build a Fitbit for a building?"

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Buddy's Ohm Base

Image: Buddy

Forty percent of the world's energy and water is consumed in buildings; and while there are many industrial-grade internet-connected utility meters available, they don't resonate with the small-to-medium enterprise (SME) market where energy and cost savings could make a significant difference, former Microsoft executive and CEO of Buddy David McLauchlan believes.

Speaking with ZDNet, McLauchlan explained that Buddy's recently-launched "top-to-bottom" family of products, Ohm, enables SMEs to monitor electricity, gas, steam, and water usage, as well as solar power generation, in a much simpler way than conventional building management systems.

Ohm is comprised of three hardware components: Base, Link, and Sense. The former two contain a built-in cellular modem and connects with a building's electricity, water, and gas meters; while Sense measures temperature and humidity in rooms. Third-party devices such as motion detectors and infrared sensors can also be connected to Base and Link.

The Buddy IoT Cloud Platform is one of the two software components that sits behind the hardware, enabling the processing, streaming, and storing of key resource data, while offering real-time capabilities such as rule-based alerts.

The other, Parse, is essentially the mobile version of the company's IoT cloud platform, generating real-time push notifications when anomalies are detected or predetermined thresholds are met.

"We built Ohm because we found that even though the volume of data going through our cloud platform was going up massively, it was particularly hard to turn that data into value and into an obvious return on investment without having the full ecosystem of products," McLauchlan said.

"We're in the hardware space to get data because we're actually a data company."

McLauchlan admitted the company had to think carefully about the design of Ohm and said simplicity was one of the company's core design principles, which resulted in the surface of the devices being magnetic, eliminating the need for complex installations.

"With other products in this space that do electricity monitoring, the electricity companies are coming at it from an electrical mindset. So there are these big ugly expensive boxes that nobody looks at twice, nobody is curious as to what it does. It requires professional installation ... it's just a nightmare," McLauchlan said.

"We asked ourselves: 'If Apple or Tesla were to build a Fitbit for a building, which is what [Ohm] is, what would it look like and what would the experience be like?' What we came up with is something that looks more consumer-ish; it doesn't look like an industrial piece of electronics.

"People are instantly curious when they see [Ohm]."

According to McLauchlan, rather than "confusing" the user with tables of numbers, the platform's front-end portal provides SMEs or building managers with an overview of how their buildings, floors, or offices are consuming resources.

McLauchlan admitted that the platform is deliberately not a "deep analytics product with infinite fidelity of analysis".

"[Our system is] designed to be familiar to anyone that has used an online banking site. Every data point is clickable. Setting up email or text alerts or push notifications for when electricity use [exceeds the predetermined limit] is as easy as setting up an alarm clock," McLauchlan said, adding that the cloud platform can plug into more complex building management systems for those looking to analyse resource usage "down to the Nth degree".

Ensuring every component of Ohm system interconnects with other devices and software was of "paramount" importance to Buddy, with McLauchlan adding that not much value can be gained from systems that clash.

He also said that creativity can be unlocked when systems interoperate and data is both exportable and importable. For example, a school based in the United States said it wants to make the data from Buddy's platform available to children as part of their curriculum so that they can use it to build applications.

"Having kids actively involved in managing the energy consumption of their school is a genius idea," McLauchlan said. "One school I spoke to said [they] actually have kids building these little Arduinos that measure the temperature in the school and then they write applications from the data those things generate."

"They said [they] would much rather use Ohm because it is a commercial product generating real data, instead of the kids building what's effectively a toy."

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Image: Buddy

Buddy is currently in the process of developing a military version of Ohm with a higher degree of security to meet the requirements of government defence departments locally and internationally.

McLauchlan also said customers have been enquiring about the ability to remotely control facilities.

"Some customers have said, 'Can you go turn down the lights or the heating if the power is too high?' While we have the ability to do that, we're not rolling out that functionality at this point," McLauchlan said.

"The reason for this is because we believe there is trust to be earned first before you can go and control a facility's lighting. Imagine if we had control of a retail location's lights and we were able to turn off the lights in a shop -- that has a real impact on them.

"There are two things we want to make sure is absolutely certain first -- that we've got all the bugs ironed out and we've got our security mechanisms as tight as they can be."

Ohm is offered "as a service" in that companies are charged a monthly subscription fee that is determined by the size of the facility, number of buildings to be monitored, and resources to be monitored. Hardware and data visualisation costs are included in the monthly fee.

The company is also willing to accommodate customers that want to own the hardware.

"We sell it as a service because that's overwhelmingly the most popular way people want to buy in the US," McLauchlan said.

"In Australia, we find there is actually a mix. Some organisations do want to buy the hardware and then pay a service charge to run the system. We've learned that government in Australia like to buy and own equipment in assorted buildings."

Ohm is currently sold online and through channel partners such as electrical contracting firms and energy consultants.

McLauchlan said the Ohm family of products is resonating well with local councils in both the US and Australia.

"The state government in South Australia was incredibly supportive and really worked hard to get us to Adelaide. Part of that is because they too are very heavily investing in smart city infrastructure," McLauchlan said.

"We find that city councils -- especially in Australia where you've got the federal government's $50 million smart cities program -- are very promising. We can help city councils in Australia qualify for a grant from the program on that basis."

Educational institutions and quick service restaurants are also promising customer segments for Buddy, McLauchlan said.

Buddy became a publicly-listed company in Australia through a reverse takeover in December 2015.

McLauchlan said the company, which has previously received funding from Microsoft and pop star Lady Gaga's venture capital arm AF Square, decided to go the IPO route because "VC in the US is very diluted".

"It's diluted because you're buying a network of people; you're not just getting money," McLauchlan said. "We had a strong network already through our existing investors and connections, so we didn't really need that."

Since its launch earlier this year, McLauchlan said the top request that Buddy has been receiving is a "home version of Ohm". While it makes sense to offer a home version in the future using more cost-effective materials, McLauchlan said the company is focused on the enterprise version until the time is right to expand the product line.

The company -- which is headquartered in Seattle, with a base in Adelaide -- expects the bulk of the revenue boost that Ohm will generate to come in the next quarter, as companies are still in their 30- to 60-day trial periods.

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