Powered Up - by Rob Kirkbride

Convia is a Departure from Herman Miller's Long History of Building High-End Office Furniture

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1370 Abbott Court Buffalo Grove, IL 60089 847.876.6925 Contact: Jane Chadesh 847.876.6925

THE MONDAY MORNING QUARTERBACK, January 21, 2008 – In a nondescript office building tucked behind an ice rink in Chicago’s far-north suburb of Buffalo Grove, Herman Miller is hoping to spark an electrical revolution.

The site is home to Convia Programmable Infrastructure, the subsidiary that grew out of Herman Miller’s Creative Office that makes modular and programmable electrical infrastructure. There is nothing new or revolutionary about a system that moves power. Conduit and wires have been doing that for more than a hundred years.

But it is the way that Convia delivers the power that could revolutionize building electrical systems. Convia does it by delivering “plug-and-play” power without requiring hardwiring of devices or switches.

It is a departure from the company’s long history of building high-end office furniture. But a look inside the company’s Chicago-area showroom shows it’s not as much of a leap as one might think.

“We think the next step is for Convia to go directly into workstations,” said Convia President Randy Storch, a longtime Chicago-area resident who has been involved with numerous startup companies. “It’s going to be all about giving workers direct control of their environments.”

Convia is experimenting with the connection between the individual office and the overall environment. For example, researchers have a RFID connection on the bottom of an Aeron chair in one office. When the worker sits down, the window shades close and the lights are automatically dimmed -- both preferences of the worker who occupies the space.

Giving workers control of their environment is a key to energy savings, Storch contends. And energy savings is a critical component to Convia’s success. “People want to do the right thing,” he said, describing how workers will reduce their energy use if given the chance. “They just don’t know how to do the right thing (in a traditional office).”

All the workers in Convia’s office now have control of their workstations through an internet site.

Convia is an important part of Herman Miller’s long-term strategy. Chief Ex- ecutive Officer Brian Walker has mentioned Convia several times recently in conference calls with analysts and investors. The company’s board of directors is visiting the Buffalo Grove showroom today to see how Convia fits into Herman Miller’s future.

“This is a centerpiece of our strategy going forward,” said Herman Miller spokesman Mark Schurman. Convia is easy to explain, but can be hard to comprehend without seeing it. That’s why the small staff that works in the 6,000 square foot showroom and office is constantly explaining the system. Convia staff does two or three demonstrations a day and numerous other webinars to show people how it functions.

Here’s how it works: --Electricians install a grid work of beams to create a ceiling. Each of those beams has plugs for “smart connectors” that allow the designer to put up light fixtures, security devices and other electrical items.

--The grid can be set up in one of three ways: a true open grid system with the metal power channels showing and the ability to add modules every 10 inches; a modular grid with a ceiling and smart connectors at semi-permanent locations; and a hybrid system that is a mix of both.

--Switches can be wireless or wired. Wired ones are similar to an electrical cord that can be plugged or unplugged. Wireless switches fit into a wall connector and can be moved anywhere in the building. The switches are low voltage.

--A wand controls the switches and smart connectors. Point the wand at the fixture and then at a switch, and the fixture and switch are connected. Press another button on the wand and the connection is cut, without any wiring changes. Up to 20 connections can be made to a single switch.

--The entire system can be controlled remotely through a computer connection. A building administrator can track energy savings online.

Getting word out on how Convia works is the company’s biggest challenge, Storch said. “Our biggest hurdle is that it is hard to get Convia across to people without seeing it,” he said. “Until customers have a chance to see it actually operating, it can be difficult.”

Storch said the Convia system is being installed at locations across the country to make it easier for customers to see it in action. And seeing is believing, he said.

“You don’t walk away from this experience and not want it in your building,” he said, describing customer reaction to the Convia showroom. “This is Mecca if you want to see what Convia is about.” Convia continues to morph and evolve. Researchers are continuously adding new features to the system and tying it into new devices.

Convia can now control HVAC functions. And the system can be tied to events as well. For example, Convia can be tied to a building’s outdoor sprinkler system. Convia can monitor local rainfall levels and turn on the system when it gets dry instead of running on a set schedule where sprinkling might occur during a rainstorm. Convia can also monitor sunrise and sunset times and adjust lighting accordingly.

The result of the high level of control is reduced energy costs. Storch said there is a 32 percent reduction in energy costs compared to a traditional pipe and wire system. Lighting represents about 60 percent of power consumption in a typical building.

Convia enables customers to meet “Title 24,” the strict California energy guidelines that all residential and commercial buildings must meet.

Convia also can help with LEED certification. A building that gives 50 percent of its occupancy direct control of energy is worth one point. Buildings that give 75 percent of its occupants direct control receive two points toward certification.

Since no pipes and wires are installed, Convia saves on labor installation costs as well. Storch said Convia can reduce labor costs be 40 percent to 60 percent. Still, Convia’s goal is for the total cost to be a “slight premium” over traditional wiring, Storch said.

Convia does have other financial advantages. Like furniture purchases, Convia can be depreciated over seven years instead of 30.

Convia also has major competitors to worry about. Storch called Lutron Electronics the “900 pound gorilla.” Other companies are getting into programmable facilities as well.

Herman Miller is known for furniture, but Storch said its reputation for quality is helping Convia in the new market. He said the company’s great brand helps Convia “get the ear of the end user.”

“People trust the Herman Miller brand because they know Herman Miller is not going to put out a product that is going to fail,” he said. “I’ve never had the question about why Herman Miller is going into this business. Coming from where I come from, I have nothing to lose.”

Convia officials have been showing off prototypes since it was launched in November 2006 at the Greenbuild International Conference and Expo. Convia also has been installed in test offices for quite a while. Herman Miller had a small Convia display at NeoCon last year. It recently received its UL listing.

Convia is the second company to come out of the Herman Miller Creative Office. The first, Sonare Technologies, is the maker of the Babble sound masking system.

Like many Herman Miller products, the awards are starting to come in as well. Convia was recently awarded two industry distinctions for innovation and design.

The Chicago Athenaeum: Museum of Architecture and Design gave Convia a 2007 GOOD DESIGN Award and Architectural Record named Convia in its 35th Annual Product Reports for 2007.

The GOOD DESIGN Award Program recognizes design innovations for products and graphics designed or manufactured within 2007. For its flexibility and design, Convia was selected as a recipient for this award from among more than 1,000 applicants from around the world.

Architectural Record’s 35th Annual Product Reports selects building solutions that exceed design expectations within their respective categories. Convia was noted because of its ability to allow users to rewire and adjust electrical components on the fly – while viewing energy usage and savings in real time. Convia Programmable Infrastructure was chosen by a panel of industry professionals to be among the top 25 innovative electrical products of 2007.

But the company is just gearing up its marketing efforts. Convia systems have been shipping for about four or five months now. And Convia is gaining traction, Storch said.

Convia has an exclusive distribution agreement with Wesco International, a $6 billion electrical distributor.

“Everything is in place to scale the business,” he said. “Credibility is breeding credibility”