What is HVAC as a service?

November 30, 2018
Sierra Monitor

People don’t buy a shovel because they want a stick with a metal blade. They buy a shovel because they want a hole.  The same can be said for HVAC systems. The buyer of an HVAC system doesn’t want a giant metal box with a whirling blade that sits on their roof. They want hot air or cold air. Or, more accurately they just really want a temperate indoor environment. 

That’s unfortunate when you think about how HVAC manufacturers do business today. The process of buying an HVAC unit, or any type of industrial equipment, ultimately results in the purchase of a giant box that puts the purchaser or site manager in the service business. It puts them in the business of providing the service of cold air. 

Candidly, that’s not likely a role the purchaser wanted when they began the process. 

What if there’s another option? What if there was a way to introduce a new business model or go-to-market strategy that would manage to flip that script and keep the equipment owner from becoming the service provider? HVAC as a Service (HVACaaS) could be the solution. 

People don’t buy a shovel because they want a stick with a metal blade. They buy a shovel because they want a hole. Much like they buy an HVAC system because they want cold air. 

The evolution of equipment “as a Service”

This move to “as a Service” has become pervasive across multiple industries, from software to data center and network infrastructure. And it could make its way into industrial equipment. 

As individuals, we’re faced with the option of buying “as a Service” all the time.  We no longer purchase CDs and DVDs.  We now pay for services like Spotify and Netflix that deliver “music” and “entertainment.”

Traditionally, industrial equipment has been sold as capital equipment that could be bought or leased. Leasing may seem like a service offering, but leasing is simply buying over time with better tax incentives.  But HVAC manufacturers with fully connected equipment can turn the model upside down by offering a managed HVAC as a Service. 

In a previous post, we discussed how the deep integration of BMS solutions into equipment, and connecting those systems to the cloud, could increase the knowledge that OEMs have about their products in the field. 

With those systems in place, the OEMs can then take advantage of the real-time operational data and insights into performance and functionality of the units on site. This information is the foundation for delivering a new managed service by allowing the OEM to: 

  • Proactively monitor functionality: is airflow good, is temp appropriate, are components inside the unit operating within range? 
  • Use the data to monitor and proactively maintain elements like the blower or coolant
  • Schedule service and maintenance calls before there’s a problem, or before there’s downtime 

This data enables the OEM to remove the headache of managing a “cold air service” from an overworked facilities manager. Instead, the OEM is in a position to sell that as a service to the customer. 

This HVAC as a Service offer doesn’t need to be implemented by the manufacturer.  The key to offering this as a service is the access to functional and operational data from units in the field.  With that data, it’s possible for the manufacturer to sell the service directly and contract the physical maintenance or, more likely, white-label the service to their field partners, providing them an additional product to sell beyond just the capital equipment. 

Regardless of whether the OEM is offering HVAC as a Service (HVACaaS) directly to the customer, or through their field partners, the result is the same. The customer is no longer buying a box that they own and maintain for the sake of becoming a “cold air service” provider. Instead, they’re buying “cold air as a service” from the OEM, and that service is powered and enabled by the real-time data that OEMs can only get from BMS and the cloud.

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