The Internet of heating

The process of digitalisation does not stop at the heating technology industry. On the contrary. Ten years ago, the core focus was developing, manufacturing and selling heating appliances. This has changed. Today, the Vaillant Group’s day-to-day operations also include software development, IT services and data-driven business models.

This presents both an opportunity and a challenge, as the transformation of a traditional industrial company into an industrial and technology company does not just happen by itself. Active measures are needed to ensure its success. Digitalisation is opening up competition and sectoral boundaries. The partners of yesterday are perhaps the competitors of tomorrow (or vice versa). And young companies are entering the market with unconventional mindsets and flexible ways of working. Sometimes so much so that they aim to transform entire sectors.

Digitalisation has made the ability to create innovative products in a short space of time more important than ever. The Vaillant Group’s API Developer Programme is the most recent example of just how far the Group’s products and services have evolved beyond mere heating appliances. Sometimes the company has to enter uncharted waters, and this was one of those times: developing a purely digital service, which is still a rarity in the heating technology industry.

The nerve centre of digitalisation

Office building no. 9 is located just a minute’s walk from the Vaillant Group’s company headquarters in Remscheid. In the basement, around 30 programmers and software and IT developers are hard at work, spread over two large areas. They belong to what is known as the IoT (Internet of Things) team, which mainly looks after IT services or creates new ones. It does not take long to notice that this is no classic office environment. Lines of colourful programming code flicker against a black background on the numerous monitors dotted around the room. A number of screens have been turned on their side. Colourful post-its decorate the walls, detailing the status of ongoing projects and tasks. The room is full of hustle and bustle. People chatting and sharing ideas. Work is collaborative, the atmosphere informal. There is no manager’s office. Instead there are two foosball tables, IKEA chairs and lounge areas with bright cushions.

To the unknowing observer, this may look a bit like a mixture between a start-up and a co-working space. It is, however, one of the nerve centres of the Vaillant Group’s digital transformation. The birthplace of products and business models which go beyond the classic production of heating appliances. In some cases, they have very little to do with the Group’s traditional business at all. The IoT field is a new area of growth for the Vaillant Group. The software is the product here.

Mirko Meier explains what is happening behind him in the room. His job title is Product Owner. He has worked at the Vaillant Group for ten years. He is currently in charge of the API Developer Programme. “It’s all about making intelligent use of the data from our heating appliances in order to offer our customers added value,” he explains. “We strive to offer our partners safe and reliable API services that are easy to use so that they can integrate our heating technology into their products and services.” This is the goal that the some 30-strong developer team behind the API Developer Programme has set itself. In order to understand how it all works, it is necessary to know what API services are and what they make possible.

API: sound familiar at all?

The Vaillant Group operates on a much smaller scale than the tech company in California’s Silicon Valley. The business models, however, have much in common. Philipp Fudickar, Head of the IoT team, describes the value chain: “Our business partners identify practical ways to use particular device data which we, as the manufacturer, have access to. And they want to integrate this data into their products and services to make their portfolio more appealing to their customers. This data is shared via our API platform. For the Vaillant Group this means: we not only offer our customers our heating appliances and connectivity products on a one-off basis, but also provide an ongoing data-based service.” The Vaillant Group is currently one of just a few heating companies in the sector to offer an API service.

Who is the API service designed for?

The project team has clearly defined the Vaillant Group API’s target groups. “The API service is exclusively designed for business customers,” says Product Owner Mirko Meier as he describes potential customers. “Ultimately, there have to be certain conditions, or the customer needs to have certain requirements.” First of all, customers need to have their own IT infrastructure and IT development resources. Second, the business customer has to clearly benefit from integrating heating technology into existing systems or services. Third, the provisions of the General Data Protection Regulation must be observed and data protection in general must be guaranteed at all times. All requirements in this area are set out in contract.

“This is why we have a clear focus on property and service companies, energy suppliers and smart-home developers,” adds Philipp Fudickar. “Smart-home suppliers or prefabricated house manufacturers that offer smart-home features now have a product which also integrates heating technology, possibly giving them an edge over their competitors. A property company or an energy supplier may have a larger inventory of boilers. The system data and available diagnostics make it possible to improve efficiency when servicing and carrying out maintenance. The same applies to service companies, which in turn provide these kinds of services to their customers in the real estate sector. There was also one case where a partner had already used the API Developer Programme to process information for its customers on their consumption and energy billing. It has many different uses and there will be even more applications in the future, providing plenty of space for creative business ideas.”

The portfolio of the Vaillant Group is aimed at business-to-business customers, but the end result is also always added value or added comfort for the end customers.

Vaillant API services available in 13 countries

The Vaillant Group API Developer Programme was piloted with partners from several different European countries. It is now a standard service available in 13 countries and the number of partners has grown to 40. As it is not a classic product which needs to be physically produced, transported and installed, the international market launch did not require the normal processes, which involve making small technical adjustments to the product in the various markets, which can take several months.

The technical availability of the platform is guaranteed centrally by the Vaillant Group. There are three standardised tariff packages: Smart Home Integration, Diagnostics and Insights. The Vaillant Group’s national sales companies then offer the API service in their respective markets and within the respective regional sales structures. The countries have a great deal of freedom here, because the potential varies from market to market. The use of control units and heating appliances which are connected to the Internet is more widespread in some countries than in others. At present, the focus is in particular on France, Great Britain and the Netherlands, as these are the countries where heating appliances are most often connected to the Internet. The next most promising market is Germany, which shows potential for future development.

eRELAX / vSMART / Migo