Fieldserver Powers Sierra Monitor - Analyst Blog

Ken Nagy, CFA

Fieldserver Powers Sierra Monitor

Sierra Monitor Corporation designs and develops hazardous gas monitoring devices for the protection of personnel and facilities in industrial work places. Through its subsidiary FieldServer Technologies the firm has branched into protocol translation technology, which enables machine to machine (M2M) communication in energy and building automation applications. This high growth business should complement the gas detection business, while not sacrificing market or margins. FieldServer should see a tailwind as a result of the push toward zero net energy building designs.

Fieldserver Technologies
FieldServer Technologies consist of the Fieldserver and ProtoCessor business units. This technology targets commercial buildings infrastructure and essentially makes products that provide interoperability from device to enterprise networks. The result is the firm has a grasp on everything from energy efficiency and automation to roof-top air conditioning and lighting controls.

Research and spending over the next several years will focus on “zero net energy” building designs. The WBCSD (World Business Council for Sustainable Development) identified buildings as one of the five main users of energy where “mega trends” are needed to transform energy efficiency. They account for 40% of primary energy in most countries covered by this project and consumption is rising. The International Energy Agency (IEA) estimates that current trends in energy demand for buildings will stimulate about half of energy supply investments to 2030. If building site energy consumption in China and India grows to current US levels, China’s and India’s consumption will be respectively about four and seven times greater than they are today. Energy consumption will grow dramatically without action to improve energy efficiency substantially. The construction boom, especially in China, is increasing energy demand significantly, but economic development and other factors are adding to the challenge because they also increase buildings’ energy needs.

SRMC sells several Fieldserver products to both original equipment manufacturers (OEMs) and through direct sales to integrators and distributors. From its low average selling price ProtoConnect which is targeted at companies that have a standard proprietary communications interface to its high margin X30 Linux based platforms, the firm provides Fieldserver products that cater to virtually any firm or building in the several industries.

Further legacy devices are now being linked to central sources. This enables the firm to provide a platform for remote monitoring and management. Therefore growth in this area is two-fold. It will not only come from new sales, but also from firms wishing to tie legacy products into a single system. FieldServer has become a growing piece of the solution in recent years. In 2009, combined revenue from sales of FieldServer and ProtoCessor products was approximately 45% of sales compared to approximately 40% in 2008 and 37% in 2007.

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