Menu
An unsexy merger could make your building more cool

An unsexy merger could make your building more cool

Tyco and Johnson Controls look to a slick future for smart buildings through IoT

The names Johnson Controls and Tyco International don't generate the kind of excitement buzzing around some companies in the Internet of Things, but the merger they announced Monday might have a big impact on that market.

Both are far older than the army of startups that has formed around IoT, and they make equipment that until recently faded into the background. Tyco supplies security, fire and surveillance systems, while Johnson is big in HVAC (heating, ventilation and air conditioning) and platforms for managing all the systems in a building.

Those humble systems, which the tech industry has never paid much mind, are now at the heart of new efforts to make buildings more connected, efficient and comfortable.

The products Johnson and Tyco sell fit together naturally, and the combined company could choose to link them closely in a proprietary way. However, in the long run, building management systems are evolving into multivendor IoT platforms, which almost by definition require openness.

If Johnson and Tyco choose a path of openness, the sheer R&D scale of the combined company could be a powerful force to advance IoT building technology.

IoT promises new, more open ways for machines to talk to each other and work in harmony. This can lead to greater energy efficiency and buildings better suited to users' needs. Smart and connected buildings are likely to generate more connections than any other form of industrial IoT, according to Machina Research.

Both Johnson and Tyco are now moving in that direction, though they're still invested in older technologies, analysts say. Combining the two companies could bring their technologies together in useful ways.

It's a big merger. Johnson has a market capitalization of about $23 billion and Tyco is valued at more than $14 billion. The deal is partly intended to save on taxes and the terms are complex, but the combined company will be called Johnson Controls and based in Tyco's home country of Ireland. The merger should close by September.

Part of the strategy is to combine new-product pipelines for areas including smart buildings, smart cities and advanced data and analytics.

Building automation platforms like the ones Johnson sells provide controls for all of a facilty's HVAC equipment in one place and can also coordinate things like window shades and lighting for greater energy efficiency.

The traditional way Johnson and others have done this is to sell both the infrastructure and the overarching software, Forrester analyst Frank Gillett said. "You can accomplish quite a bit as long as you're in their universe," he said.

The downside is that customers get locked into one vendor's products and can't tap into a wider market of devices and applications that they know will work together. Thus the moves toward IoT by companies like Lucid, with its vendor-agnostic Building OS, and by more established players, including Tyco and Johnson. Tyco is getting into IoT with products like Tyco On, which can gather and analyze data from other vendors' devices, and Honeywell is doing the same with its Niagara platform.

Enterprises are starting to demand more open approaches so they can add new IoT gear to their existing equipment, Machina Research analyst Andy Castonguay said.

Still, building-management customers are also just starting out on the IoT path, so there may still be room for special integration between Tyco's and Johnson's technologies, Gillett said.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

The making of an MSSP: a blueprint for growth in NZ

The making of an MSSP: a blueprint for growth in NZ

Partners are actively building out security practices and services to match, yet remain challenged by a lack of guidance in the market. This exclusive Reseller News Roundtable - in association with Sophos - assessed the making of an MSSP, outlining the blueprint for growth and how partners can differentiate in New Zealand.

The making of an MSSP: a blueprint for growth in NZ
Reseller News Platinum Club celebrates leading partners in 2018

Reseller News Platinum Club celebrates leading partners in 2018

The leading players of the New Zealand channel came together to celebrate a year of achievement at the inaugural Reseller News Platinum Club lunch in Auckland. Following the Reseller News Innovation Awards, Platinum Club provides a platform to showcase the top performing partners and start-ups of the past 12 months, with more than ​​50 organisations in the spotlight.​​​

Reseller News Platinum Club celebrates leading partners in 2018
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP has honoured its leading partners in New Zealand during 2018, following 12 months of growth through the local channel. Unveiled during the fourth running of the ceremony in Auckland, the awards recognise and celebrate excellence, growth, consistency and engagement of standout Kiwi partners.

Meet the top performing HP partners in NZ
Show Comments