A Filipino manufacturer of air-conditioning units and refrigerators has moved all its business and financial data into the cloud and formed a new unit to deploy internet of things as a prelude to the rise of smart homes in the Philippines.
“Our intent is to look at current and future technologies that could expand our business in a more disruptive way,” says Froilan Rabatan, the head of research and development of Cortex Technologies Corp., the newly formed strategic business unit of Concepcion Industrial Corp.
“The things that we look at are internet of things, as CIC is really into air-conditioning and refrigeration. We thought of expanding our portfolio to include smart homes. That’s the venture we are looking at. We found AWS [Amazon Web Services] as the platform to help us through that technology shift,” Rabatan says in an interview in Makati City.
CIC, controlled by the Concepcion family, is a local company behind world-class appliance brands such as Carrier, Condura and Kelvinator. It also has existing partnerships with Toshiba, Midea and Otis.
Rabatan, who graduated cum laude with a BS degree in Computer Engineering from UP Diliman in 2001, says CIC wants to go beyond its present lineup of products to take advantage of technologies and enable smart homes (automated houses) in the country. An automated home is possible by connecting appliances, electric devices, CCTV and other gadgets in the house to the Internet.
“Cortex officially became a company in June or July 2017. Back in 2015, our CEO Raul Joseph Concepcion had a 2020 vision which is to basically make the company five times bigger than what it was by 2020. Part of the strategic statement was to expand the business to be more disruptive, looking into technologies. It was then they decided to form a new technology unit,” he says.
“We need to evolve into more than just AC and ref. Even our CEO thinks that technology is a game changer,” he says.
Cortex introduced its first IoT product called Carrier Smart+Cool plug and mobile app this year. The plug device connects to WiFi, allowing the homeowner to run the air-conditioner on a specific time or day using a smartphone.
Rabatan says the user can also set a budget for air-con consumption, in either peso value or kilowatt. The app will then alert the user if he has reached the limit. The final goal, he says, is to help the user reduce electricity consumption by intelligently scheduling the use of an appliance such as an air-conditioner.
“It connects to WiFi. You can monitor your power consumption real-time, hourly, daily, weekly, monthly, or yearly. You can see the trends. On your own, you can set certain schedules when to turn on or off. You can also set reminders, when you want it maintained. You can set our own budget,” he says.
Rabatan says the next version of the app “will tell you what you need to do.”
“This is an exciting time for us. Next year, we will add more to the Smart+Cool plug. We will improve our way of connectivity, we will add more predictive features, and we will make the rest of the products interoperable. That is just the start,” he says.
Rabatan, who previously worked for Hewlett-Packard Enterprise, says he decided to join CIC to know what it felt like to work for a Philippine company. “The good thing with CIC is that our CIO [chief digital information officer] is Sean Byrne, who thinks very progressively,” he says.
Byrne led CIC’s migration of its entire data center operation to a public cloud using the AWS platform. “Everything, including ERP [enterprise resource planning] is now in the cloud,” says Rabatan.
The IT team of CIC began migrating its IT system to the AWS Cloud in 2016. Core AWS services that CIC uses include Amazon Elastic Compute Cloud (Amazon EC2), which runs all the company’s applications, with data relating to those applications contained in the Amazon Relational Database Service. Data storage is provided by the Amazon S3.
In early 2018, CIC implemented SAP Hana on the AWS Cloud—realizing one of Byrne’s key goals for faster, less expensive deployments. SAP Hana became crucial to CIC’s financial, production, and supply chain operations across its consumer and commercial business.
“There are two reasons that we moved to the cloud. First is cost. It is more expensive to have your ERP system, application system hosted in a data center. Aside from that one, you need people to support that. With the cloud, it is easier. In 15 minutes or less, you have a production server right away. Second reason is growth. We are looking at expanding our core, outside of AC and refrigeration,” Rabatan says.
Without hardware costs, it became financially viable for CIC to build a large-scale computing environment for an IoT solution.
Byrne then considered developing smart products, such as smart air conditioners. He also tapped the AWS IoT infrastructure to deploy the first product of Cortex, which is also headed by Byrne as chief executive.
With the SAP Hana project completed, CIC focused on enhancing its air conditioners and refrigerators with smart technology. CIC first developed smart plugs, which could be fitted to new air conditioners and other appliances in the market.
“We have around 2.5 million air conditioners in operation right now, and we’re selling hundreds of thousands every year. The initial question was which IoT service would be elastic enough and affordable enough to handle the data going back and forth from these plugs. We found that AWS IoT Platform could deliver what we needed through a combination of Amazon EC2, Amazon RDS, and AWS Lambda. AWS Lambda was crucial, giving us the capability to run our code specifically in response to events,” says Byrne.
Byrne, an Australian, says CIC has reduced its overall IT costs between 30 percent and 50 percent since it moved to the AWS Cloud. “We are now in a situation—like other companies using public-cloud services—where we are seeing business growth without any corresponding increase in IT spend,” he says.
“We have seen an increase of 40 percent in the number of IT projects that we can complete in a year because of the flexibility of the AWS Cloud. We have also been able to increase IT availability to 99.999 percent since our move to the AWS Cloud, giving our customers and strategic third parties more reliable IT services,” says Byrne.
