kaer - Cooling-as-a-Service and the Role of Technology

When customers operate their equipment poorly, the time has come for Product-as-a-Service. The cooling of large building complexes such as shopping centres, university campuses or offices is a case in point.

In this episode, Dave Mackerness, Director at kaer, explains how Cooling-as-a-Service work. By optimising the equipment, connecting it and operating it much more efficiently, Cooling-as-a-Service can yield cost and emission reductions.

This episode is the 14th in the series PaaS Decoded, 16 conversations about the fine details of product-as-a-service.

Video Impression

People

Dave Mackerness, Director at kaer

Patrick Hypscher, Co-Founder of Green PO, Expert in Sustainable Business Models

Chapters

00:00 Intro
02:06 Why turning building operations carbon neutral is complicated
06:44 Benefits of Cooling-as-a-Service
07:45 How Cooling-as-a-Service works
10:10 Connectivity as enabler for improved Efficiency
11:36 The role of data, forecasting and machine learning
13:52 Adjusting the hardware and avoiding technology lock-in
17:36 Pay per refrigerant ton hours
19:34 Flexibility of the customer to start and stop Cooling as a Service
21:13 Educating the first-time customer is essential
24:55 Data as a key enabler for service efficiency
26:48 Start with Why and use as a Service as an instrument
29:31 More Interoperability and Personalisation ahead

About kaer, from website:

Kaer specialises in providing cooling to commercial and industrial buildings throughout Asia.

Further Links:

Kaer https://www.kaer.com/
Energy Partners Africa https://energypartners.co.za/
African container company https://www.coldhubs.com/
SET Alliance https://set-alliance.org/

Transcript:

My name is Patrick Hypscher and this is Circularity FM, the podcast about understanding, building and managing circular business models.

Welcome to the 14th episode of PaaS Decoded. 16 conversations about the fine details of product as a service. In the last episode, Rob Keulemans explained how Royal Arend started with separate furniture as a service operations and gradually integrated it into the core business. In today’s episode, we stick to the topic of buildings, but look at cooling as a service and the role of technology in it.

He has degrees in Molecule Biology and Virology from London. After that, he moved to Singapore, starting his career in MedTech as a Global Account Director. 15 years ago, he joined kaer, a provider of cooling as a service. As a director, he oversees and leads all customer success activities at kaer.

Welcome Dave.

Thanks very much, Patrick. Nice to be with you.

What’s your favorite temperature?

So it’s aligned with the Singapore standards, 24 degrees plus or minus one in less than 65 percent humidity.

Okay, so, and you never move out of Singapore then?

Yeah, so we’re, we’re, we’re kind of all over. So we, we are a Singapore based business but we now have operations in multiple ASEAN countries. So India is our fastest growing market and then Malaysia and Indonesia as well. But mostly the, the standards pretty much aligned. So yeah, 24 degrees is probably the most politically correct answer for me to give.

[00:02:06] Why turning building operations carbon neutral is complicated

Okay, now I also understand why you moved from London to Singapore. Dave, when it comes to temperature and climate change we have to talk about buildings. Their construction and operation cause a lot of carbon emissions. Why aren’t buildings carbon neutral?

So I think the, I mean, the first Thing to mention is that it is possible for carbon for the buildings to be carbon neutral. We have multiple case studies in pretty much every geography in every climate where they are carbon neutral. And by that, I mean the operation of the building. Of course, there’s the embedded carbon within the construction materials, which is another thing we need to look at.

But operationally, you can, you can essentially run them on 100 percent renewable energy. The reason that so many of them aren’t, I think, is because it’s an extremely complicated Task to take on, and it involves many, many different things. So, you know, cooling is one element of buildings, but also there’s, there’s lights, there’s lifts, there’s many different things in operation.

So as a building owner, you can’t focus on so many different things. So it seems quite overwhelming and quite complicated to do. So although it’s possible, it’s expensive, it takes a lot of time and investment and effort, and most of the people that own buildings, they aren’t experts in these different areas, right?

I mean, it’s almost impossible to be, to be that. So I think the, the main barrier is that it’s just so complicated. And that’s why We see the as a service business model, which is why we went into it about 12 years ago now because it simplifies the process for building owners instead of figuring out how to do it working with multiple different vendors, multiple different in multiple different industries.

You essentially can sign a contract and outsource that to somebody else to do for you. So, yeah, we, we do cooling as a service. You can sign a contract and download an app and you can have carbon neutral cooling. You can work with solar providers or renewable providers. You can download their apps and you can sign their contracts to get renewable as a service. Lighting as a service. You, you know, sign their contract, download their app. I think that’s a much easier thing to do. Sign contracts and download an app versus trying to do it yourself.

And if we stick to cooling, what exactly makes it so complicated?

So cooling systems are different. Every building is different. So even two buildings in Singapore will have very different requirements for their cooling and different ways of providing it. And you know, it gets even more complicated when you look at the differences between a data center in Asia versus a school in, in Europe, as an example.

So there’s lots of different bits of technology that you need to put together in a cooling system. And not only do you need to put it together you then need to operate it in a way that is that is efficient and sustainable. So a lot of people will say, you know, just buy the latest equipment, put it in your building and you’ll have energy efficient cooling or sustainable cooling.

Unfortunately, it’s not that simple. Even if you have the latest equipment and technology, you’ve got the best consultants who put it together for you. Once you install it, you’ve got to operate it in a certain way and buildings are dynamic, right? You don’t plug it in and then the building stays exactly the same.

The cooling, the requirements go up and down, the weather changes, the humidity outside changes. All of these things that, you know, more people come in at lunchtime, it starts raining in the evening. All of these things will affect the, the performance of the cooling system. And you’ve got to essentially operate it every minute of the day and use software and data and technology to help you do that, to, to remain efficient. And to remain sustainable. So it’s a huge investment to do that.

So I think whilst building owners are very happy to spend CapEx to have more reliable and efficient systems, because as a business case for it, it’s, it’s very rare that they will invest huge amount in, in operations teams and data acquisition software and artificial intelligence to run those systems.

So I think that’s why it’s not as simple as just plugging it in and then, and then letting it be efficient.

And when we stick to the property owners, when do they usually think about these problems?

It depends a little bit on the type of building owner. I think if you’re, you know, if you’re in the real estate business and you’re, you know, commercial offices and shopping malls, most of the time you’ll think about this when your cooling system is end of life. So, you know, once you’ve installed it, it’ll run for 15 to 20 years and you kind of think about it again when it’s time to replace it, which is a big CapEx investment.

And that’s where a lot of people will get involved in how you deploy that CapEx and how you, how you do it best for the building.

Whereas a lot of other businesses will, if it’s a, an industrial facility or a data center, as an example, which is really looking at their energy consumption, then they might focus on it on an annual basis or every two to three years.

But if you’re an, as a service provider, you will think about it on a minute by minute basis because the business model kind of is, is, is pushed towards you doing that.

[00:06:44] Benefits of Cooling-as-a-Service

Okay. So that, to me, that sounds like the, the. Let’s say on the customer side, three main triggers. First one is CapEx when, when I need to invest in the equipment. Second one is operational expenses. And the third one is then also operational management when I feel overwhelmed and I realized I myself can’t handle the equipment in an efficient manner.

Yeah, and I think, sorry, I would add a fourth one, which is regulations. When regulations start coming in and therefore there are certain benchmarks you need to hit as a building in terms of energy consumption or energy intensity. So for example, if you’re a data center here in Singapore, you’ve got to hit certain EUI metrics.

There are certain refrigerants that are being phased out, so you’re not allowed to have cooling systems with certain types of By global warming, potential refrigerants. So I think as these regulations come in to try and push people to be more sustainable, these sort of ESG based building codes, then people will also think about it as well, because they, they usually give you three to five years to get ready for these new codes that are coming, coming into, into the market.

[00:07:45] How Cooling-as-a-Service works

Okay. And how does then the process of cooling as-a-service look like? So if I, as a property owner, decide, okay, let’s let’s do, that sign a contract, download the app that’s it? Or are there any other steps involved?

Yep, that’s it. So there’s a lot of steps for the provider but as a customer of as a service, yeah, you sign a contract and then you download an app and essentially what the provider will do is they will take over the operations and oversight of your current cooling system. So if you have a building today and you sign a contract with us tomorrow, then within 60 days, we will have a team on site.

We will have familiarized ourself with your cooling system. We’ll take over all operations, service and maintenance, utilities, everything to do with that cooling. And then at that point from 60 days from signing the contract, you are now just buying cooling as you use. So think of it kind of like how you buy electricity, right?

You don’t invest in the infrastructure to, to, to create the energy or distribute it to your building, you just use kilowatt hours and you pay for every kilowatt hour that you use with a fixed fee. So cooling as a service is exactly the same. It’s kind of like a utility, right? Electricity and water are utilities, now cooling can be one as well.

So once you’ve signed that contract and all the cost goes to the provider. Then they would use that cooling system to give you cooling and you pay as you use any repairs. They would take take on all the electricity and water consumption of the cooling system. They would take on and that doesn’t affect your price, right?

So any improvements on efficiency, water consumption, a lot of the sustainability metrics is incentivized within the business model for the provider to be as efficient as possible. And then any upgrading that has to happen is, is up to the cooling as service provider as well. So I think the majority of, of customers for us, when their cooling system is end of life, they then sign a cooling as a service contract.

We take over their existing cooling system. We then invest, you know, a huge amount of money to replace all of the technology. So new chillers, new cooling towers, new pumps, new control systems, billing systems, optimization systems, software that we install. And then they just buying, you know, pay as they use.

But you also work with the existing equipment and, and

Yep. So I think the majority, like I said, the trigger for people thinking about this usually is end of life because that’s when they need to spend a lot of capex. But yes, we have some clients who really just want to outsource as quickly as possible. It’s not strategically aligned to their business. So why would they, why would they spend all this time trying to operate cooling systems?

[00:10:10] Connectivity as enabler for improved Efficiency

So we will buy over a cooling system. So even if you’ve just built one, you can sell it to us and then we will use that equipment to to provide you cooling as a service There is always some upgrading work that we do From a controls perspective to improve the performance of the system. We put a lot of software into it that we use to either run the system better for ourselves or also give more visibility to you.

So kaer Real time is our control system we use that improves reliability it improves efficiency, so sustainability metrics, and also helps us do proactive and predictive maintenance. And then we have kaer Connect, which is the software that our customers use to sort of see how their cooling system is operating.

All of the reporting that we give to them in terms of our service level,

So that sounds like in the absence of connectivity, your, your advantage wouldn’t be possible. You wouldn’t be able to operate the system at the best level.

you can, but you would, you would, I mean, you can, that’s a great question. So all of our buildings are connected. So we can gather that data and then use that to run them more efficiently if you can’t connect to the internet, so there might be some sensitive buildings which don’t want to be online. Then you can do it, but you’d have to be in the building in person. So our AI platforms work on premise. So we can optimize on premise, but to gather that data and then to, to benefit from all of our other buildings that feeds into the training of those AI algorithms, you would need to be connected to online. Yeah.

[00:11:36] The role of data, forecasting and machine learning

I can imagine how you use the data from, from the cooling system itself. What about the demand data? You mentioned weather conditions, but also the use of the buildings, the patterns. How do you access this kind of data and then incorporate that into your operation? So it even goes into the area of forecasting. Do you actually need to forecast or do you, are you so flexible that you just adjust to the condition and to the, to the need the building has right now.

So in the past, we used to try and forecast so we could then tune the system for what’s about to happen. You know, if cooling requirements go up, let’s say, for example it gets really warm, it goes from 26 degrees outside to 32 degrees. And lots of people come into the building, let’s say it’s a shopping mall, and it’s a Saturday, so lots of people are coming in. Then you want to try and run your cooling system as best you can to deliver that requirement.

The requirement is dictated by the building. You can’t change that, but you can try and forecast it and predict it so you can be ready for it. You don’t really need to do that these days, because now you have, machine learning software, which can gather all that data in real time and tweak and optimize your system in real time.

So we use bricks, which is we built it ourselves, but basically it pulls all the data out of a cooling system. It then runs it through artificial intelligence to tell you what you should be operating and how you should be operating it.

So with, with cooling systems, there’s lots of different trade offs. So you might spend a bit of energy over here so you can save more energy over here.

And essentially think about it, it’s kind of like there’s 30 to 50 bits of equipment or with a little dimmer switch. And for any second in time, there is a right position for every single dimmer switch. And every time you twist one dimmer switch, it affects all the other ones.

So that used to be really hard to do in real time, which is why you would try and forecast, try and set them all right, and then see what happens. But now I say with machine learning, it’s actually pretty easy to, to do that in real time. So get the data, figure out where all the switches need to go, and then do it in real time.

So now forecasting is less , I think, important. It’s now more about forecasting breakdown and mechanical repairs that are required as opposed to settings for the system.

[00:13:52] Adjusting the hardware and avoiding technology lock-in

And how often does it happen that you then also have to add or remove equipment itself? So when do you start doing that when you foresee some peaks or well, does it happen at all? And yeah, what’s the process of that?

In, in the traditional model, it doesn’t happen ever. So you, you install a cooling system on day one and you have it until it’s end of life, 15, 20 years. And then what happens is the operators or the facilities teams that have been given that cooling system, they have to, you know, Do the best they can with what they’ve been given.

With cooling as a service you can change the equipment. So you’re not.

As a customer of cooling as a service, you’re not buying technology. You’re buying an output, right? You’re buying I want it to be 24 degrees and 65 percent humidity. That’s what I’m buying. Now.what’s delivered by kaer is up to kaer. So I want to do that as efficiently as possible if I need to install more equipment because that’s what to do that.

I can give that to you in a more sustainable and cost effective way. I will do that. But also if I want to take out equipment because your requirements have changed, I can do that as well because now I have a portfolio of buildings I can move technology around.

So great example is, you know, buildings do not have the same low profile over a 20 year period. period. Office buildings now have lower loads than they did five years ago because less people are in them. And because we have flexible work environments. And even though that building might be fully occupied in terms of a leasing perspective, in terms of real occupants, they’re not all there because people are working from home at different times, et cetera.

So now you have to change your loads quite considerably. So what we could do is if the cooling building has decreased, we can take a chiller and a cooling tower out. We can put it somewhere else. And now you don’t, and now you have a different cooling system that’s serving that. So with cooling as a service, it allows you to be far more flexible because you have this portfolio based approach.

And it means you’re never locked into technology. Which I think that, that’s, that’s one of the real, Issues with the past way of working is, yeah you have to decide what your cooling system needs to look like now and in five years time and in 10 years time and 15 years time, especially if it’s a new building if it’s a new building, you essentially say, when I build this cooling system, it’s got to be fit for purpose or, you know.

Let’s assume the hottest day in, in whatever country you’re in in 15 years time, let’s assume a little safety buffer, let’s assume full occupancy. So you build a huge cooling system just in case these things happen. And in the traditional model, you have to do that. If, you know, as cooling consultants, we would do that too, if we were working under the traditional model, but in the cooling as a service model, because you can put technology in and out, it means you can build fit for purpose today.

And if the purpose changes in three to five years time, you can change the technology that’s, that’s serving it. So it’s, it’s much more flexible in that regard.

Do you also handle seasonality in that model, or do you at least say, okay, we try to keep the equipment stable for, for one season or one year and handle everything that’s happening

so generally with the current requirements of the building and the annual seasonality, you would build a cooling system that can essentially give you the best reliability and sustainability metrics for that requirement. You probably wouldn’t change it every, every three to six months. I mean, we are talking about big equipment.

That’s, it’s hard to move and, and, and costly to move as well. So yeah, so you’d only do it if the building requirements change, you wouldn’t change based on the seasonality aspect.

But you do design that in. So when we look at designing a building in Puna which has far more seasonality than building in Singapore, we will look at the 24, 24 hour 12 months of the year weather data, and then we will design for that. So you can be as efficient as possible in the summertime and in the wintertime.

[00:17:36] Pay per refrigerant ton hours

If we now look again at the customer you mentioned it’s basically pay per use or sometimes a subscription. In the case of pay per use what’s the metric you use?

So we use refrigerant ton hours. So essentially it’s just the amount of cooling that is used based in, in RTH. You can, there’s lots of different measurements for cooling depending on the market that you’re in, you can use whichever one is most appropriate, but yeah, we use refrigerant ton hours.

Okay. And how flexible is the contract then for customers

So cooling as a service is sort of, you know, 10 years ago, I think it was very flexible because it was being developed and kind of co created with customers.

Now that it’s become more established as kind of standards within the industry of what a contract looks like. So I think the contract is pretty standardized.

But when you talk about customization, essentially, it’s you can customize the deliverables. What are the deliverables that you require? And then how that’s done, that’s up to the cooling as a service provider. So that’s actually not really written into the contract. Just the deliverables are, so you can say, I want 24 degrees. You can say, I want this humidity. You can say, I want these indoor air quality metrics. If you like you can say, I want low low temperature cooling. You dictate what it is. You can also dictate you know how it’s done to some extent. So you can say, for example, if you are a big MNC that happens to own a chiller company, as an example, you can say in my buildings, you can only use my cooling equipment. You can’t use my competitors cooling equipment. So that’s fine. You just say, look, these are the requirements I have. And then the cooling and service provider will put that together and say, all right, this is the cost per ton hour based on what you’ve given me. If you want 24 hours man on site. Then you can have that as well.

That’s just costed in if you want power backup, So if you’re a data center and you want genset backup, okay, we can add that in as well. So I think it’s you can customize exactly what you want And then the cooling and service provider puts that together and gives you a dollar per ton hour price. It might just change the price.

[00:19:34] Flexibility of the customer to start and stop Cooling as a Service

and how long is the lock in for the customer?

There’s no lock in. There can’t be lock in. I think this is this is the the real issue we have with when you when you take the as a service business model. You If you think about the software space or the entertainment space, You wouldn’t even think to ask a question like that. What’s the lock in period for Spotify?

What’s the lock in period for Netflix? There isn’t one, you can’t have one. But when you move to the built environment and you’re talking big CapEx, big chillers investment, you need return on your investment. That’s when businesses start putting in things like lock in periods, minimum consumption. You know, they want to make sure that their revenue is guaranteed over time. What we would say is that you can’t have that. You need to really stay true to the spirit of the as a service business model. So. Just like we said, if you want to sign a contract and join the Cooling as a Service movement, you do that, you download the kaerConnect app and you’re in.

If you want to exit for whatever reason, let’s say for example you want to sell your building, or your, let’s say you’re a camp, an educational campus and you had two campuses and now you’re consolidating to one, so you don’t need the other one, which used to be on a CaaS contract, well then you can easily exit that contract as well.

And the way that we do that is you simply buy the cooling assets back off us. So if we bought them off you and we’re offering you Cooling as a Service, To get into the contract to get out you can buy them back off us and then you can exit the contract. So there’s no there shouldn’t be any penalties. There shouldn’t be any lock in periods. Essentially it’s it’s a business model that you can try. And, and if you don’t like it, you should be able to get out of it just as easily.

Not all as a service providers are like that. But I think if you’re looking to procure it you really should make sure that those clauses are there to protect you as a customer.

[00:21:13] Educating the first-time customer is essential

I feel like for me, it’s so obvious to do as a customer. Let’s turn it around. What are cases where you say this is not suitable for cooling as a service?

So, so we’ve been doing it for about, like I say, 10 to 12 years. And I think the concept of as a service is obvious. And it, it’s a, it’s, it’s a, Very eloquent business model that allows you to get exactly what you want, which is why as a services disrupted all industries, not just, not just cooling and not just ESG based or sustainability based industries transitioning to it, however, is very difficult.

Or can be very difficult because customers aren’t familiar with this way of working. So think about it, how hard it was for you as a consumer to go from owning your own CDs to, you know, going to Spotify, it wasn’t easy to make that decision because when I did it. I had never heard of Spotify, I didn’t know who they were, I didn’t know if they’d have the right music, I didn’t know if they’d be around in 10 years time, I didn’t know if 10 bucks was a good deal per month or not, I didn’t know if they were going to increase their price, you know, I would sign up, I’d throw all my CDs away, and what happens if Spotify wasn’t there next week, or if they jack their prices up.

So because that wasn’t for me with the business model, it was, It was hard for me to make that decision. Even though Spotify as an idea, any music, anytime, anywhere was a great idea. So I think cooling as a service fits in the same category and that it’s a no brainer to do, but it’s, it needs, customers need to be brought through this journey and how they do it safely for their organization.

And that’s where I think there are. The contract has to allow people to get in and out very easily. It has to be priced in a way that is accessible. So, if I told you your building is, 1. 50 per ton hour. Is that a good price? Is that is that is that really expensive? Is that really cheap? You don’t actually know so helping customers understand the pricing mechanism because it is a different way of pricing is important but in terms of where where it’s not been a successful business case to move across obviously the Bigger your cooling consumption is The better the sustainability or the financial case will be.

So if you’re a 24 hour operating company, like a hotel or something like that, then obviously the sustainability and efficiency of your system is really, really important. So any impact that kaer can make to improve that has more financial impact to you as an organization. So big consumers data centers, wafer fabs, industrial players, hotels, that’s where the business case is strongest.

But even if you’re looking at really small levels or really small consumption, it can still make sense to you as a business. So there’s a great company in, in Africa that essentially does cooling as a service for refrigeration or cold chain refrigeration. And also there’s another Company called energy partners that does the big, the big sort of stuff as well.

But essentially, you know, this it’s called ColdHubs and they’re basically, it’s a container where farmers can put in their fruits and vegetables before they sell them so they don’t perish and go off. So they essentially can have less wastage in the, in the food supply. So it’s, it’s like one container of us.

I think it’s solar powered as well. Cooling refrigeration as a service. So that’s tiny. I mean, it’s, it’s like two tons or something, I think three tons. So the business case is, is from the very small side to the very big stuff. We haven’t yet seen one where it doesn’t make sense to do.

I think where, where customers struggle is if they’ve built a brand new cooling system.

And you know, they’ve only just paid for it and only just bought it. They might’ve invested a lot of time in that process. So then outsourcing it immediately, you know, might might not make sense. But from a business perspective, it, it always, I haven’t yet seen when it doesn’t make sense.

[00:24:55] Data as a key enabler for service efficiency

Okay, cool. And then to summarize, to me, it feels like actually it comes down to two things. So why there’s an advantage. First one is you operate the equipment much more efficiently. And second one, as a consequence, there’s just a much better utilization rate of the existing equipment, which then also reduces the overall investment. Would that be fair to say? Plus the regulation and the ESG, of course. Yeah.

Yes, I think so. And I think. The great thing about it is it’s not, so although obviously I’m a representative of kaer, it’s not specific to kaer as a company. The as a service business model unlocks a lot of these benefits regardless of which provider you’re working with. And I think that’s the power of the business model.

So we kind of want the whole industry to move to it. And the other, I think the other one that just to add on is, is obviously that the equipment being more efficient is part of it, but the data collection and then using that data to then operate your systems, that’s key. Because essentially at the moment we have all these buildings with different cooling systems that are collecting data in different ways, in different formats.

In excel most of the time. So actually how you bring that together to learn from it is quite difficult. So we went through a data transformation journey about four or five years ago now where all of our sites are Labeled in the same way. Data is collected in the same way. In the same accuracies. The same time intervals with the same nomenclature.

You know, just basic things like, you know, we use chillers. So we would have in one site it would be called chiller1. In another site it would be called chiller 1. In another site it would be called ch1. And those three things you can’t, they can’t all talk to each other because they’re not the same thing. So standardizing, and it’s not a sexy thing to talk about, and it took ages, and it was very laborious, but you have to go through and do that before you can really benefit from the, the, all the data coming into one location.

[00:26:48] Start with Why and use as a Service as an instrument

Dave. I have three generic questions about as a service in general. The first one is about the perspective of a brand or manufacturer who’s starting to offer circular product as a service. What’s the main thing you have to make sure as a brand or manufacturer, if you want to enter that space.

I think the number one thing is to understand why you’re doing it and why your customers would care. Because although as a service is a business model is the same at all industries like what we’re doing is the same as what the entertainment industry is doing or what lighting is a service is doing. Turning your product into a service is generic, right? Everyone’s doing the same thing.

But why you do it is totally different. Why Netflix did it and why we’re doing it is not the same reason. Netflix did it for convenience, they did it for scale, they did it for user experience, right? That’s why you can have every, every video you want on your phone. It’s a convenience cost play.

For us, it’s a sustainability low carbon cooling play. So I think you, you can’t just assume as a service is going to resonate with your customers. You’ve got to understand why. And then you essentially have to use the as a service business model to package the benefit you’re giving to your customer.

So, so yeah, that would be the first one is, is really trying to identify why your customer should care about this. What problem are you solving? So us as an example, if you want low carbon or no, no carbon cooling, we think cooling as a service is the way to do that. Other industries will be different.

If you are, as an example, if you’re a lighting as a service, maybe that’s more of a capex play a cost efficiency play. Like I said, it could be, it can be convenience. It could be outsourcing non strategic benefits to your customers. I mean, it depends. So deciding that is the first one. And then the second one is how do you get everyone in your industry to, or sorry, in your company to really be aligned behind the transition to as a service because it’s not easy to do as a company. You’re not just you know, we used to be selling cds now we’re selling the software as a service. It’s not that simple Your revenue is gonna have a pretty big it’s gonna be big impact your revenue. There’s gonna be a big impact to your costs. You’re gonna have to hire totally different people. But they’re gonna have to be integrated into your organization.

You’re gonna have to figure out how to get Talent that you’ve never had to get full into your organization. So we never had to get, for example, data analysts and data scientists. They all worked near in Google, right? Then they’re in those kinds of companies. They don’t need to work for, for air conditioning companies.

Now we need data analysts and we need AI guys and machine learning guys and software and UX guys. And so we, we try to say, how do we going to attract them to come to kaer when they could go to, you know, Googles and the Facebooks of this world back when we were trying to get these people. So I think it’s, yeah, you’ve got to make sure you get the buy in from the entire company that this is an important shift to go on.

[00:29:31] More Interoperability and Personalisation ahead

Second one what are the significant trends you see in circular renting for the next five years?

Well, I think if I, if I just talk about the built environment, which I think is where most of our work is, I think it’s becoming more and more accessible.

Because essentially all the different bits of technology that we use are now able to talk to each other. Through these, I mean it used to be very much around proprietary technology and proprietary software and proprietary data packages. I think that trend now is, is almost totally shifted to everything is open protocol. So you can put these things together, work with multiple different technologies and vendors and, and bring them into your system. So I think that’s, that’s helpful for as a service provider and makes that easier.

I think the other thing is you, you, You alluded to it at the beginning of a conversation. Buildings are highly connected. So using that ability to get data and control buildings remotely. Security is getting Obviously much more of a, of a priority point for all of our customers, but also the, the way that we can protect our buildings is, is improving. So you actually can have that connected environment.

So I think that’s another one. So it’s becoming easier to, to give customers what they want, but I think mostly it’s now, it really is a consumer led environment and, and customizing to individuals is where it’s going to, it’s going to go towards. So I think we used to talk about the built environment, you know, just build it as quickly as you possibly can. Then we had kind of the sustainable environment, the green building environment. So it’s a bit more sustainable when you build these buildings. Then we had the smarter buildings. So it kind of went building green building, smart building, then it’s now kind of healthy building.

And I think where it’s now moving towards is customer centric building. So if you want a particular temperature and I want a different one, how do I make you comfortable and me comfortable? So it’s less about the space and the building and more about the people and how they use it. So I think we, the technology is going to have to really shift towards focusing on the customer requirements and the individuality of the customer.

Instead of just treating us all like, well, everyone wants 24 degrees and 65 percent humidity. Well, that might not be the case.

Yeah. Yeah. Yeah. Yeah. And my last question is about people. Because the podcast is about sharing knowledge and connecting people and maybe someone is listening right now who might be well aware and also for you, it might be good to get in contact. So what are the types of people you’re looking to, to get into conversations these days?

That’s I think anyone who is sort of a stakeholder within a large portfolio of buildings should look at how they servetize all of their operations. For us, we’re really trying to have that conversation with, you know, REITs and building owners and portfolio owners across the board and different industries are kind of more specific than others.

But if, if you’re, if you’re looking at doing this, I think there are lots of now, is the availability of lots of different resources where you have case studies, where you have experts in as a service. So there are consultants that do as a service consultancy. So I’m part of the, the set alliance, which essentially is an organization run of base is the secretariat run by a great team out of Switzerland.

And they basically help companies understand their server tization journey, how they can servertize what they’re doing. So I’d, I’d highly recommend going and speaking to, to them. The set-alliance.Org is their website.

If that’s, if you’re interested in sort of taking this journey and then also just other people that are doing it.

It’s funny, you know, all these, we speak a lot of conferences on how we did cooling as a service, and we speak next to heating as a service guys and lighting as a service. And we learn a lot from them. So speaking more with customers, speaking more with other as a service providers, and also other cooling as a service providers in different markets.

So I think I mentioned energy partners already. So they’re based in, in Africa and they, they kind of like kaer Africa. And they do, they do what we do and they have the same challenges we have and the same learnings that we have. So it’s in a speaking with people like that is extremely helpful for us because we’re kind of creating this and and that’s the great thing about an as a service model is it continuously evolves like the features you have the way that you deliver that to your customers is always changing but what you what you deliver is exactly the same it’s it’s not no carbon cooling low carbon cooling but there’s different ways that you can you can put that together.

Dave, wonderful. Thanks for these insights and sharing your experience and elaborating on cooling as a service. Thanks a lot.

thanks for having me it’s great to talk to you

This was another episode of PaaS Decoded, 16 conversations about the fine details of Product as a Service. If you liked it, share this episode with colleagues or on social media. If you missed a question or topic, please send me an email so I can improve the conversations for you. If you learned something from this episode, please provide a review via Spotify or Apple Podcasts.

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My name is Patrick Hypscher and this is Circularity FM, the podcast about understanding, building and managing circular business models.