ccre building
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 1
Connected RealEstate and CAPEX
Prepared by Rick Huijbregts (30 October 2006) v1
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 2
Capital expenditures ("CAPEX") areexpenditures used by a company to acquire orupgrade physical assets such as equipment,
property, industrial buildings.
Wikipedia, 2006
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 3
Total Cost of Ownership (TCO)
Design and
Construction Operations
+ve
-ve
Time
5500 Years
CAPEX
OPEX
REVENUE /PRODUCTIVITY
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 4
Changing the TCO
Design and
Construction Operations
CashFlow
+ve
-ve
Time
MaintenanceRenovation
Decommissioning
Reuse
5500 Years
Reduce CAPEX
Simplified installation, reducedcabling, procurement options forbuilding systems
Reduce CAPEX
Simplified installation, reduced
cabling, procurement options forbuilding systems
Increase REVENUE
New business models, managedservices, intelligent building
premiums
Increase REVENUE
New business models, managedservices, intelligent building
premiums
Reduce OPEX
Simplified management,maintenance, operationalefficiencies, energy savings
Reduce OPEXSimplified management,maintenance, operationalefficiencies, energy savings
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 5
Saving on CAPEXwith Connected Real Estate
The Benefits of Convergence:
Cabling & Cable Pathways
One cabling infrastructure versus eight or more
LaborReduced complexity, simplified installation
Equipment
Low-cost alternatives, non-proprietary
Single device to service multiple applications (e.g multi functional sensors) Project Management
Savings on design and implementation
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 6
Saving on CAPEXwith Connected Real Estate
Continued
Consolidation of servers for the systems
Less hardware, less space, and reductions in software licenses
Reduced training of personnel
For standardized system management tools and platforms
System configuration
Less time to configure due to shared standardized databases
Wireless PoE (Power over Ethernet)
Limited need for separate electrical cabling
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 7
BarbizonNew York City
14% Building Mgmt System
Access controls
Video Surveillance
A/V Intercom
Telephony and wireless
1 America PlazaSan Diego
The ShiresLeicester, UK
ExamplesCAPEX Cost savings due to Convergence
8.6%: Camera System
Card access
Parking w/ Validation
HVAC
Automation software
15% Electronic systems
Integrated Triple Play
Building Integration
Structure Cabling
Interoperable systems
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 8
First costs for integrated systems (includingmanagement hardware and software, networkupgrades, web services, and reductions in devices)
were 56% less than non-integrated systems.
CABA, Continental Automated Building Association, Life Cycle Costing ofAutomated Controls for Intelligent and Integrated Facilities, April 2004
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 10
Is investment in CBS (Cybernetic BuildingSystems) products and services by individual
owners and operators cost effective?
Chapman, RE, February 2001. How Interoperability Saves Money, ASHREA Journal
Most certainly YES: for every dollar investedapproximately $4.50 is returned. This equatesto an adjusted Internal Rate of Return of
approximately 20% per year
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 11
Annual cost savingsof Integrated Systems
Svc Contracts, additions, remodeling 32% less
Energy cost savings $ 0.16 per SF
Improved load factor, coordinate supply 10% less
Maintenance, repair and replacement $ 0.20 per SF Savings related to productivity $ 0.39 per SF
Staff training, efficiency, IT support 82% less
Cable and cable pathways, MAC 39% less
Adapted from: National Institute of Standards and Technology, 2004.
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 12
EnergyFairmont Hotels
34% Electricity saving Integration of:
Light
HVAC
Access
MaintenancePfizer UK
OperationsCisco Systems
ExamplesOPEX Cost savings due to Convergence
30% CCTV over IP Centralized Control
Intrusion detection
Temp, Leak detection
Monitoring
15% Annual maintenance Integration of:
70,000 building point
Centralized ops
Unified control system
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 13
Summary: Value of Convergence
Value with integrated building systems
Value with non-integrated systems
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 15
Commercial Benefits
Single network integrator
Efficient project hierarchy
Shorter lead times for design, deployment and testing
Single point of contact for contractual issues
Single point of contact for problem reporting and escalation
Demonstrable cost savings of between 20% and 30% acrossactive/passive infrastructure and control systems delivery
A defined delivery model that can be replicated across projects
Adapted from: Converged Building Technologies Group, Integrated Approach for InformationCommunication Technology (ICT) and Control System Infrastructures within Buildings, April 2005
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 16
Technical Benefits
Ability to deploy equipment more efficiently
Single structured cabling infrastructure for maximum coverage, flexibility Future proofing
Common infrastructure resiliency
Common upgrade path
Common centralized management systems
Remote management capability
IT Security compliance
Open Systems Architecture based on IT standards
Adapted from: Converged Building Technologies Group, Integrated Approach for InformationCommunication Technology (ICT) and Control System Infrastructures within Buildings, April 2005
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 17
Cost benefit analysis
($1.65)$6.94$8.60
$8,330,664$10,314,000Total
($2,190,936)Savings
$0.10 to $0.50 Per SF$72,000$72,000Electric Power Management System
$0.45 to $1.00 per SF$174,000$174,000Programmable Lighting Control
$1.50 to $2.30 per SF$456,000$456,000Building Automation System
$1.25 per SF$300,000$300,000Video Distribution
$1.00 per SF$240,000$240,000Access Control System
$1.30 per SF$312,000$312,000Video Surveillance System
Common Areas$57,600Telephone Network
Wireless in Common Areas$150,000Data Network
$2.50 to $3.50 per SF$3,600,000$3,600,000Cable Pathways
$1.50 SF for Com.Area;$4 to$6 per SF for other$5,160,000$5,160,000Cabling
NotesiBTraditional CapitalCostBuilding Technology System
Residential Space
21.1%
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2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 18
Cost benefit analysis
$2,190,936Total
PM is 8% of Capex,savings is 30%$247,536Project Management
15-60% savings oncombined raceway$1,350,000Cable Pathways
7-16% savings with onecable contractor$593,400Cabling
NotesCapital Cost SavingBuilding Technology System
Residential Space