The Software Capabilities of Honeywell’s Homes and Building Solutions

Honeywell's Driving Forces: Software and Technology

(Continued from Prior Part)

Honeywell Homes

The Honeywell ACS unit comprises three businesses: Homes, Building Solutions, and Industrials. Honeywell (HON) has the largest installed base in the Homes business, which forms 22% of the Automation and Control Solutions unit. The company installs more than 15 million systems each year in over 150 million homes.

Honeywell’s (HON) massive installed base gives it a head start, particularly in data utilization. Honeywell does not own data anywhere in the world, but it does ensure it is able to mine it to develop useful solutions and drive new business models.

The company’s predictive analytics capabilities enable its contractors to upsell reports—a $1 billion industry—that customers can use to optimize their usage. Upselling is a profit-maximizing sales technique in which sellers persuade customers to purchase add-ons to their existing purchases.

Honeywell Building Solutions

Much like Honeywell Homes, the software capabilities in Buildings Solutions business, which comprises 44% of ACS, benefit from a large installed base of over 10 million buildings. As seen in the illustration below, Honeywell has a comprehensive software portfolio within its Building Solutions segment that is expected to unlock substantial sales value for the company.

The company’s multi-site management software targeted at the small building owner now provides a single mobile app to manage energy and security needs in a small building. The company also developed the Honeywell Smart Building Score, which the company expects will become the global reference point for smart building performance. This initiative is explained in Things You Should Know about Honeywell’s Regional Markets.

Investors interested in trading in the industrials space can look into the Industrial Select Sector SPDR ETF (XLI) and the Vanguard Industrials ETF (VIS). Top holdings in XLI include General Electric (GE) at 11.5%, 3M Company (MMM) at 5.6%, and Honeywell (HON) at 5%.

Browse this series on Market Realist:

• Part 1 - Honeywell Software: A Kingmaker across Business Units

• Part 2 - Understanding Software’s Growing Stature in Honeywell Aerospace

• Part 3 - How Honeywell Aerospace Keeps You Connected in Flight