“We are building the digital highway between manufacturers, our customers and end users.” – says Patrick Egloff, Managing Director at home technology wholesaler Zander. But how do wholesale and IoT actually fit together and what benefits can digitalization bring here? This is answered in the 41st episode of the IIoT Use Case Podcast together with IoT solution provider Philipp Mayer (Managing Director, codestryke) using a practical example from the energy sector.
Podcast episode summary
In this podcast episode, Zander, a B2B electrical, heating and plumbing wholesaler, explains the use of its codestryke IoT solution for customers and how they can save costs and profit in the long term by using data from purchased end devices. Nowadays, products and building technology are not only sold, but additionally networked to ensure energy efficiency and sustainability. The discussed use case is about energy meters, how they are connected, which pain points of the customers are alleviated and which additional benefits arise from their connectivity.
How does the networking of energy meters and other products work? The overall solution from IoT service provider codestryke consists of a hardware component and a software component. The premise in the development of the IoT solution was, in addition to long-term scalable connectivity, simple commissioning in the style of a vacuum cleaning robot, as codestryke director Philipp Mayer makes the comparison. The result is a three-click commissioning process that takes just a few minutes and can be carried out without any IT knowledge. The application is also intuitive and simple: If, for example, the lighting system in a building has been converted to LED, a timestamp can be set in the so-called energy monitor with one click and from that point onwards it is possible to track how much electricity is saved from now on. Data from load profiles, load curves or energy consumption per square meter are used to visualize further savings potential. The whole thing is supported by Siemens MindSphere.
What the hardware component of the solution looks like, how the data from the energy meters is tapped, as well as tips on developing and implementing IoT solutions, can be found in the 41st episode of the IIoT Use Case Podcast all about the “IoT-sification” of the wholesale business.
Energy Monitor from ZANDER
Hello Philipp, hello Patrick – welcome here to the IIoT Use Case Podcast. Nice to be reunited here with codestryke, Philipp. Today you also brought your customer. Patrick, thanks to you as well for taking the time. I would say we start right off with a round of introductions on the part of codestryke. Especially for the listeners who haven’t heard the last episode with you yet: What exactly does codestryke do in terms of its core business and which customers are you active with here?
Hello and thank you for inviting me again. It was a great pleasure to be here again. I am Philipp Mayer, one of the co-founders of codestryke and our CEO. Perhaps by way of background for those who were not present at the last podcast: codestryke acts on the one hand as an IoT service provider, which means that we support customers from the conception to the development and operation of IoT solutions. And on the other hand, also as a software provider, where we have VergeLink, a connectivity software that can acquire industrial data. Typically, our customers are machine and plant manufacturers, mostly in German-speaking countries. But we also have customers, such as Zander, who come from the wholesale sector.
Patrick, now in your direction. I think many listeners may now be asking themselves – wholesale and IoT, how does that actually fit together? From an external point of view, you have a classic range from which I can have products delivered with personalized service, but also software in the direction of the IoT solution. I think that’s super exciting and that’s what the topic today is all about. Before I get to that, maybe briefly up front, could you briefly introduce yourself and your role at Zander Group and maybe a bit of what your portfolio includes exactly?
My name is Patrick Egloff. I am the managing partner of the Zander company in Freiburg. Zander is active throughout Germany as a specialist wholesaler in the field of building services. Here I am additionally responsible for the complete digital sales and business unit development for digital concepts. We have been a specialist wholesaler since 1879, when we started in the sanitary sector. We have been active on the market in the electrical sector since 1911 – with B2B customers, i.e. tradesmen, and with industrial customers. Here we have always supplied as a commodity platform the products of various brand manufacturers from all over the world, preferably the major brands from Germany, but also international brands that we can procure. We have customers all over Germany from the electrical, sanitary and trade sectors, as well as industrial customers. Here, from our understanding, we are building the digital highway between the manufacturers, our customers and the end users.
Now you had just talked about digital concepts or the digital data highway. I would now go into a little more detail. Can you put the topic of digitization in your context a bit and maybe give us some insights into why you went in this direction in the first place, or what the drivers for it were?
I think that’s often underestimated, what we do as a trade in the industry or wholesale in general. Because the bottom line is that wholesale has always been very innovative and has always been evolving. Today, when people talk about wholesale, others say commodity platform or platform to it. And we’ve always had this platform business for commodity, so that we look for or select the best solutions for our customers in the combination for the application that they need and then deliver those things. The products we supply have also been networkable since the 1990s, when the first bus systems came along – KNX was the buzzword back then. And if you look at the products we supply: In order to create added value, the exciting thing in buildings today is that we give an additional benefit with our products, that is, we “IoTize” and network the buildings. It is also my deepest conviction that we, as building technology wholesalers, entered this field because we said: We can only achieve energy efficiency, sustainability and digitization if we network the building technology and products that we actually supply every day and allow them to communicate with each other. And to your question about what our understanding of digitization is: We see three areas for us. First, the digitization of our own business processes, then the digitization of business processes with our customers, and third, the new digital business model development between these stages. Here, we also bring with us the corresponding skills and competencies to take this further forward, with our top manufacturers and of course also partners such as codestryke, Siemens, MindSphere, in this context.
Maybe one more question, just to classify the whole thing and get an impression of your products: You had said you guys are in both sanitary and electrical and you had mentioned buildings. What can I order from you classically? Can you give an example, also from the building sector perhaps?
You yourself can’t order anything from us, but your trusted tradesman can order everything you need for the operation in your building from us. For example: a heating system, that goes from the boiler to a high-efficiency pump, to the complete electrical equipment, so a distribution cabinet, the door communication from an intercom, all the switches you have in the building. Our customer orders all of this from us in order to use and network it with you later. Industrial customers or end users in the industrial sector also sometimes order directly from us because they also have their own electrical divisions. They then also additionally have, for example, the combination of ventilation, ventilation systems, controlled residential ventilation, large heating systems, rainwater and wastewater systems – everything you need for this. We then have the opportunity to network things with measurement technology sensors using the various devices and offer solutions there – across manufacturers. We manage to create a mean value between the devices with uniform protocols that are used there and offer manufacturer-independent solutions there. We provide all the building blocks, the service, the consulting and solutions so that buildings can be “IoTized”.
After all, we are talking about a specific use case today. You mentioned building services earlier, and there are energy meters and electricity meters, for example, if we stick to this area. What are the classic challenges your customers face here? And perhaps also the question of why one thinks in the direction of digitization?
I think it’s the barriers to entry for most end users and customers, not even knowing how it works exactly. For example, I just want to optimize my energy consumption and I don’t have the right tools. I’m then faced with the challenge that I don’t even know how to go about it, and everyone tells me it’s complicated and expensive, actually just telling me what doesn’t work and how expensive it is at the end of the day. And that was also the challenge for myself as an operator of a wholesale building. From that came the idea that we said we want to optimize energy for us and save CO2 and energy within our sustainability project. At first, we didn’t find a solution that suited us, that we could implement easily, quickly and cost-effectively, and that also gave us transparency. That was the challenge for us in the role of the end user. For the craftsman, the huge challenge is that there are stand-alone solutions from individual manufacturers, but in the end they don’t work across the board. Then there is the one manufacturer who says, “Yes, I’ll get a measurement concept for you for my system and for my meters. But to connect that with all the other things only runs with very high costs, because it’s very complex, and in the future you’ll have to buy everything from me as this one manufacturer.” I say, “No, I don’t want to do that at all. I want to just integrate my other things as well.” And there was nothing offered to us. We were like, this can’t be happening. We sell the commodity every day, we’ve always been the commodity platform, so we need a solution to bring things together with the unified protocols. I think that’s a challenge for the craftsman, that until now he didn’t have anything on hand that he could offer to his customer that was simple and worked with the existing equipment that he was installing every day anyway. I think this is a typical case of added value. I need the meter anyway, I’m installing it at my customer’s anyway or I’ve already installed the meter – if I can now supply something additional, I lower the entry barrier and create simple and cost-effective solutions quickly and cheaply in the inventory for existing things or also for conversions.
So in summary, on the one hand, it’s the tradespeople who want to do cross-manufacturer networking. On the other hand, in terms of sustainability, building operators need to move forward with digitization, and then it’s really also about energy consumption and energy optimization, right?
It is driven from different angles: once by us in the example very specifically as a building operator from a cost point of view. We say we want to save, because energy is becoming more and more expensive. There are analyses that say the price of energy is expected to go up another 50 percent by 2030. And as a medium-sized company with energy costs of just under 200,000 euros a year, or pure electricity costs, we have to take a look. If I say I can save 10 percent every year alone and extrapolate that over a few years, it adds up to quite a lot. And secondly, of course, it’s also regulatory driven. That is, from the state and politicians, who regulate that companies must reduce consumption in the future. The keyword in the heating sector and gas is the CO2 tax or ISO requirements, where I as a company simply also have to present management concepts.
To come back to this problem of isolated solutions: Many manufacturers today offer such isolated solutions and I believe that this is really also the great added value that IoT brings in and counteracts, that you can network across trades and that perhaps this is not driven by the manufacturer, but from your point of view. Now I have to ask a bit of a critical question: These manufacturers offer a meter today, it is digital and also works as an isolated solution together with this manufacturer. Now you come along as wholesalers, so to speak, and say that you offer the craftsman a simple solution that also functions across the board. What is your goal behind this and how does it work in practice? How do you have to imagine this?
Our goal is also our self-image: we remain a wholesaler of goods and products for the future. This means that we earn our money every day through optimization and through the delivery of products. This is the typical wholesale function in which we face very strong competition. We want to be able to sell these goods there in the future as well. Connectivity will eventually become commodity. That is, it is taken for granted. And if you don’t have the expertise to sell products to the customers who need that kind of connectivity, then you’re out of the game with those customers and you’re opening the door to some big international corporations. It is important to offer manufacturer-independent solutions and that the customer can use all the products we have on sale. Big IT companies may say, we don’t care about the product, I’m just monetizing the data at the end. We are the opposite model and say: We want to sell the products. We want to sell high-quality products from the brand manufacturers that are industry standard and also bring this connectivity.
It’s also a completely new approach and also a new business model for you guys at that point, right?
It’s definitely a new topic, but the business model actually remains the same. We sell products and the optimal product solution for the craftsmen and our customers. By not having the model of making money from data or connectivity per se, but supporting a model in that it is about selling goods, we naturally bring the added value of independence and security to the end user and can be cheap that way.
When you think in terms of IoT, it’s always about data and concrete key figures that I need in the first place in order to implement this intelligence digitally. What data are we talking about now, for example, if I am a craftsman? Can you give a few examples of what data or metrics are here that are relevant to your customer or to you then in the next step?
I don’t think any of this is rocket science, because we simply have to think in terms of added value and value for the user, for the building operator. As a building operator, I would like to know relatively simply what load profiles and load curves I have in my company. For example, I have 150 KW on the site and I need to know that I can’t get above that 150 KW there, otherwise I have to pay for the expansion. This must be guaranteed there. So a very practical reason where I want to know, am I taking advantage of this at all, do I still have room for electromobility, for a charging station or not. Can I simply create intelligent solutions there with energy management and load management, which I use, without high investment costs? I want to know what do I have in energy consumption per square meter over a time curve to see very simply what do I have in electricity consumption. This was completely easy to see during our initial deployment when we installed the energy monitor at our facility. It can’t be, for example, that I’m still here on average 30 KW on weekends 24 hours through. Savings could be made through intelligent switching or switching off, very simple measures so to speak. These are key figures that I need. Or then in the end – and we will also offer the solution – to go into benchmark, when companies compare themselves with each other, and release their data anonymously, to see how am I doing in comparison with others per square meter? Am I doing well or badly and can I approach my electrician and can say, “Hey, what products can I use to save more energy now?” And in the second step, we will also do this for heat and gas, which will be the next expansion stage. These are the very simple key figures, in which I superimpose time with measured values. And then there’s the added benefit of being able to insert alerts. And be able to say, if any event happens that is out of the ordinary, I want to be informed to avoid downtime, to be able to respond maybe on Sunday before the staff comes in on Monday. So again, relatively simple and not rocket science at all, where we create added value here through very simple solutions. I think the trick is not to complicate it, but to use the simple things.
The topics that you have now addressed naturally also require a certain level of competence in order to implement them – you have now spoken of load curves, for example, and of measures that I may have to derive from them. How do I now bring this knowledge, which I might also need as a craftsman for this specific process, into the digital realm? Is that something you guys do or how do you have to imagine that? Or is this already something where codestryke comes into play and records the data?
I think codestryke can tell quite a lot about that in a moment. The bottom line is that the trick is always to make things as simple as possible for the end user, even if the solutions are complicated – electrical engineering and building services are, of course, very demanding in terms of craftsmanship. This is exactly the issue that the end user, the commercial manager or decision maker in the company is not a technician. And he doesn’t want to cover himself in depth like that now either. He wants to have a neat chart, he wants to see where cause and effect are with indications. For example, I can say: I converted my light to LED today, set a timestamp in the energy monitor with the mouse and see what is saved from that point on. This is as easy to use as when I start up an app. So certainly complex in preparation, which we’ve done now, and the electrician installs – the installation time here is a maximum of two hours for a meter in the cabinet – but in terms of commissioning, it’s like the app store. That is, I download the app, I can imagine, enter my data and immediately have in pre-made charts all the data I need to see immediately as a non-technical person about all the curves and metrics, KPI and dashboards: What’s going on?
Next step, the question for you, Philipp: If we are now talking about these charts and dashboards, do I need to record this data in the first place? How do I have to imagine this? How does this data get from the customer’s infrastructure, for example in the building, to the cloud?
As Patrick has just mentioned, it is extremely important for a solution like this – which is primarily aimed at SMEs – that it is very easy to get up and running. That means you actually have to learn from solutions like Amazon, Alexa or a robot vacuum cleaner. Because when I start it up at home, it may only take a few minutes, and it usually does. With large industrial machines, an IoT solution may take a bit longer to get up and running. But especially for such solutions that are put into operation by a craftsman, a non-IT person or a non-informatics person, it just has to be super easy to put the solution into operation. That’s basically how we implemented it. The overall solution consists of a hardware component and a software component. The software is what is easy to use, what the user interacts with later on. He sees his charts and can then determine where he has made energy savings, for example, or where energy-saving measures have been introduced and what impact they have really had on the electricity bill afterwards. This is the digital side that the customer gets to see. Then he still gets the hardware side with how he has to put the solution into operation. And, as I said, that has to happen very quickly. This consists in the case of energy meters that measure how the electricity consumption is. Now you have to be able to tap the data from the energy meters first. And that was basically the crux in the joint project. That was what the biggest focus was on overall. Namely, we took a gateway or an industrial PC, which is quite cheap. Because if you’re an SME, you don’t want to have any huge initial costs to introduce a digital solution in existing buildings. Then we took an industrial PC and equipped it with our VergeLink. VergeLink can be thought of like this: This is a so-called middleware that speaks in two directions. Once downwards in the direction of the devices, so in this case the energy meters. The various relevant industry protocols are used to communicate with the energy meters and collect the data from them. The industrial PC then first receives its data, which it now has to communicate somewhere, namely where the customer, the end user, can use it later, i.e. in the cloud. This is basically the second so-called northbound step, in which communication takes place in the direction of the cloud. And this VergeLink software runs on the industrial PC. Acquiring industry data in any form is not rocket science for the time being. The small but subtle difference, or actually the big difference, is: how quickly and how easily can I do it? The solution has now been worked out to such an extent – and this is what I find extremely exciting about it – that this can in principle be put into operation with three clicks. This means that when the customer orders this energy monitor from Zander, he will receive a package that includes this PC. There is also a QR code included. When you scan that and enter your email address, you automatically have access to the cloud platform. In this case, it is Siemens MindSphere, in which he can then call up the application to be able to operate the energy monitoring. And this software also allows to automatically detect the energy meters that are in the network. You then have a list of the installed energy meters and you can select them. And I’ll now assume five energy meters that I want to connect. I select them, click “Next” and automatically all the data points are configured as you need them, and when I click “Next” again, they already end up in the cloud. The subtle difference is that basically any craftsman can do this with an explainer video that goes just under 4 minutes. That is the difference that is so important, because otherwise such a solution will come to nothing. Because if you need an extreme amount of know-how to get it up and running, then it’s not a viable path for an SME. In total, it takes about three minutes this way.
I also think your approach is insanely smart – this three-click commissioning and VergeLink. I mean, if you think about smart home, it’s all relatively easy and I think it’s interesting that you guys have applied that logic to the industry as well. Patrick, the question to you again: If I am a craftsman or perhaps a building operator, then I don’t necessarily have the know-how to implement such a topic. Is that then something I turn to you guys for? That means that you develop these charts together with the customer or what I really want to see in the end or how do you have to imagine that?
Here, too, we benefit from our experience, as we have been digitally on the move for many years, work in digital projects according to Scrum, and, as a long-standing specialist wholesaler, are involved in solution consulting with our customers on a daily basis. Specifically to your question, first of all, our professionals throughout the Zander Group partner with our customers every day to deliver on the promises made to the end customers. This means that the craftsmen call our specialists and personally get their professional support there every day. If there are questions there, including installation, we have the appropriate staff for all areas to help our craftsmen or industrial customers who buy directly from us with their own electrical craftsmen. But in the same way, the end user also has the possibility to suggest functions or ask questions via a feedback button. We actually have cross-overs here, and between our direct partners and the end user, we have the opportunity to develop and advance these things. And the whole thing is agile, too: That means that new things are implemented every two weeks in the sprints when great suggestions come in. For example, we have an industrial customer who already has 60 Siemens meters in use. He is not satisfied with his solution and it was also discontinued because it was too complex. And we will now be able to do that very easily with an industrial PC. It always sounds so complicated, but you can think of this industrial PC like this: If you see a control cabinet in front of you, there are these boxes – either the main distribution board or the sub-distribution board in some rooms. They’re called in-line units, those fuses that are in there that you flip up and down and the lights go out. And there, such a mini industrial PC fits on a rail with two or three pitch units. There it is mounted, there it is connected with an Ethernet cable into the system, and the whole thing is ready. At the end of the day, it’s that simple.
I sort of connect that to the VergeLink at the end, right? Philipp, you just said, once in the direction of hardware, which speaks to the hardware, so to speak, with the energy meters, but then also with the charts, with the software that runs on top. That’s something that I don’t have to worry about as a customer, because you bring that along as a competence at that point, correct?
Exactly, and perhaps to add to that: The collaboration between codestryke and Zander is, as Patrick just mentioned, agile. That means if the customer gives feedback directly through the tool, we can incorporate that into the product in this two-week cycle that we work with Zander. And that, in turn, also goes into VergeLink, for example. We were able to adapt functions that were now required specifically for the Zander use case directly in VergeLink in order to implement customer feedback as quickly as possible. The customer does not notice much of VergeLink afterwards. In principle, it has to initially establish connectivity in the setup, which is as simple as possible, so that you are done in three minutes. But ultimately, the customer then has the operation of the solution and the optimization of energy consumption really on the digital platform, in this case on the MindSphere application.
In summary, one more question for you, Patrick. I always quite like to ask about the business case. You had said earlier, it’s sort of the monetization of the data vs. your business model, but it actually remains the same. In a way, I’m adding value to the hardware that I need anyway, for example by saving energy or reducing costs in the individual processes. Can you sum it up that way?
You can say that. And for us, the business model is also a support at the same time, so it becomes a win-win situation. If I determine for my sustainability projects by a very simple monitoring that I make quite simply over changes in the switchgear cabinet, in the lighting, in the heat plant by such measures savings as KMU, then naturally our customer is as electrical or craftsman within the range sanitary then the first partner for the execution and can one then say, with Zander at its side they have the correct products, which fit then again into this plant purely, also from the products, which we prepared with Kautz strike now already for the cross-linking then again, which purely fit, so that also again products over us refers. Professionals who continue to help customers achieve their goals. And that pays back our business model of marketing the right goods and technically high-quality goods from leading manufacturers here in Germany.
Now we have talked about the issue of energy meters. You now have an incredibly large portfolio and there are also other use cases – you mentioned lighting, for example. How does that work there? Is that the same logic with VergeLink as well, that I then onboard such topics or such hardware in that way, or how does that work for other areas or use cases for customers?
That’s very specifically included. The energy meter is the first thing and that has already been a learning curve for us: What know-how do we need? And if we now say next that we want to use heat meters there, for example, in order to measure this heat consumption in exactly the same way or also to integrate heating pumps, then these are precisely the issues. We incorporate that piece by piece and also our value-added services through the costs of MindSphere or the product afterward through the energy monitor. That we say, we’re now taking the next heating pumps, the next energy meter into the next sprint with codestryke in order to then form this portfolio out of our products that we sell every day. We also talk to our manufacturers and suppliers, who also support us there – in technology, in design or realizing our requirements. And that’s the nice thing, that we have a great partner network there with many manufacturers for many, many years. With some for 80 or 90 years. We are working with leading German manufacturers, such as Siemens, with whom the whole thing is being taken forward in partnership. That is our great strength.
That is also the key asset of this ecosystem: to realize the whole thing in partnership in a broad network and to implement it in a scalable way for the future. Philipp, now the question for you: With this use case, we are talking about wholesale today. You have a wide variety of projects in other areas as well. How is this use case transferable to other customers and other challenges? Can you tell us a little bit about what other clients you’re working, or maybe someone is listening now who doesn’t come from the field at all but finds your approach totally exciting.
What has perhaps come out a bit now – and what I found extremely exciting about the whole project – is that it was actually relatively clear from the very beginning what the business model for Zander is. Zander wants to continue to sell the hardware, the products, and earn money with them and simply deliver added value, so to speak, in order get a value add, pass it on to the customer and thereby also stand out from the competition. And that is very important, because if you have this approach, that you have the business model in mind right from the start or the concrete use case, then you are also thinking in a scalable way right from the start. In other words, it was important to Zander right from the start that the solution was not made for a trade show, but that it could be used by a craftsman who would then actually put it into operation. We need to design the solution so that this works in a scalable way and also works for many customers. And this is something that, in my opinion, many people – especially from the mechanical and plant engineering sector – still often fail to do. They come up with concepts that often work well in a showcase, in the demo case, maybe in one, two, three machines. But what you have to consider with any Industrial IoT solution: How do I establish scalable connectivity in the long term? I don`t want to go too deep into the technical details, but there are technologies like Node-RED, where you can convert and send data via so called flows and do some calculations without programming. But you quickly reach a limit when you have perhaps 100 or 1,000 energy meters in use at the customer’s site or 100 or 1,000 machines at the customer’s site in the field. If you have to deal with each flow or basically each connectivity individually and update them, for example, if you say I want to increase my transmission frequency a little bit or I want to add a new data point, then the whole thing doesn’t work. Then it is no longer scalable. That means you have to find a way to put the gateway to the Internet, i.e., data connectivity to the Internet, on a scalable footing right from the start and make it centrally configurable. That means making the whole fleet of connected things, i.e. connected machines or energy meters, centrally configurable and manageable in one central place. This is something that is extremely important and should definitely be included in any IIoT solution. We also sometimes have webinars like that, they’re called IoT business models. There`s always a slide with best practices & lessons learned at the end. They always say that you have to keep an eye on the business model and scaling right from the start, so that you don’t hit a wall.
I think what you said can be summed up quite well at the end: One is this cross-manufacturer networking, then the open and scalable technology to simply ensure that I’m relying on a technology that will also work well in the rollout in the future. And then there’s the issue of the ecosystem, that I rely on a partner who also brings along a broad ecosystem in order to then actually implement these solutions with a lot of know-how and a lot of concentrated knowledge that comes together, so to speak. Philipp, last question for you today: What else is coming in the future? What developments are you seeing at your company or in the market? What else is coming, what do you have planned?
Yes, that was quite a closing. Perhaps I could add that this approach with these use cases is ultimately there to provide precisely this impetus to think, to develop this use case together with the customer in the first place and then – very importantly – to really develop a business case from it in the sense of business impact. At the end of the day, we want to earn money with it, we want to make progress with digitization in order to leverage added value and remain competitive in the future – that is precisely the approach. Thank you again for the interesting session!