Hartford Business Journal

6 Hartford Business Journal • August 24, 2020 • www.HartfordBusiness.com By Sean Teehan steehan@hartfordbusiness.com A lmost overnight, the COVID-19 pandemic ushered in a new era of social distancing and heightened hy- giene concerns. But how does that work in an elevator? Farmington- based elevator manufacturing and maintenance company Otis Worldwide Corp. has been grap- pling with that question since the pandemic began, said Chris Smith, the company's vice president of marketing and prod- uct strategy. Even before COVID-19, Otis was developing touchless technol- ogy and other new tech functions for its elevators, Smith said, and now it's installing the new "gesture," Internet of Things (IoT) and other advanced systems into some clients' elevators. "In our personal lives we have seen seamless experiences [with technology]," Smith said. "Why can't the elevator know that I'm here and I always go to the same floor?" From Hartford to Hanoi, elevators are an underappreciated neces- sity to cities. Tall buildings are needed because cities have limited geographic space to accommodate large populations of workers and residents, and thus can only build upward. And if building owners want to lease space in those build- ings, they need working elevators. A May consumer survey from the Freedonia Group — a subsidiary of Market Research — found 79% of adults believe the coronavirus is a health threat to them. That dem- onstrates the importance of people perceiving elevators as safe to their health, said Jennifer Christ, Freedonia's consumer and commercial re- search manager. "Convincing people to get into elevators is just so crucial to get things moving again," Christ said, adding that a mass exodus of companies and residents leasing space in elevator buildings due to safety concerns would create a real es- tate crisis in major metropolitan areas. Smith agrees with that assess- ment, and said he thinks Otis' new standing as an independent company better enables it to fund research and development consistently, including on technology that would sate mod- ern day public health concerns. Formerly a subsidiary of United Technologies Corp., Otis split off from the multinational conglomerate ear- lier this year, amid UTC's $180-billion mega-merger with Massachusetts defense manufacturer Raytheon. It's been a rocky road for the newly independent company, which held its very first earnings call with investors in May, a few months after the start of the pandemic. Otis' biggest corona- virus-related challenge came in the form of precipitous building closures from the pandemic's onset, which shut down about 45% of its installa- tions of new equipment this spring. The company's new equipment sales were down almost 7% in the second quarter, and will likely show an annual decline at the end of 2020, CFO Rahul Ghai said in an earnings call with investors last month. How- ever, 90% of worksites for new instal- lations are currently open, which Ghai said indicates a recovery in the sector. Otis' $3 billion in second-quarter sales were down 9.6% from a year earlier. But Otis' new products are meant to combat some of the germ-spreading fears caused by COVID-19, in ad- dition to increas- ing convenience, Smith said. The company's eCall app, for example, allows customers to call an eleva- tor to the floor they are on using a smartphone, rather than push- ing a button. The elevator maker is also in- stalling gesturing and voice-activat- ed technologies in some custom- ers' elevators as a pilot. Gesturing technology allows people to signal which direction they want the elevator to go. Rather than "up" and "down" buttons to summon a ride, elevators have a motion sensor. People going up simply swipe their hand upward in front of the sensor, and vice versa for going down. "[Demand for] gesturing technol- ogy certainly has picked up steam since COVID," Smith said, noting that interest in voice-activated tech- nology, eCall and air purification fans are also on the rise. Otis did not release specific figures demonstrating increased demand, but during last months' earnings call, CEO Judy Marks highlighted the trend. "It's early, but we're starting to see it's not material in terms of revenue yet, but a lot of people are inter- ested," Marks said. "Some are doing short-term activities but others are looking at major modernizations." An Otis crew recently installed gesturing and voice-activated technol- ogy at Foxwoods Resort Casino, which reopened June 1, initially against the wishes of Gov. Ned Lamont, who raised concerns about public health risks. In July, one of the casino's employ- ees tested positive for the virus, but Foxwoods hasn't publicly reported any other cases. Jason Guyot, Foxwoods' interim CEO and senior vice president of resort operations, said the pilot pro- gram tracks with the casino's prior- ity of guest and employee safety. "We're always looking for new and innovative technologies aimed at miti- gating health risk," Guyot said. "Pilot- ing Otis's touchless elevator experience is the next step in this process, and we're excited to be the first casino to provide our guests with the option to safely control elevators solely through voice commands and hand gestures." Chip technology Smith said he expects touchless technology to gain popularity in the U.S. as it has among Otis customers in several large cities in India. Another concept in the works is a chip holding information about which floor individuals live or work on, so that the elevator can auto- matically bring them there. There is also the company's IoT program called Otis ONE, which uses sensors to detect problems with an elevator, and reports those problems to Otis maintenance crews to help streamline repairs, Smith said. "Otis ONE helps not only make shut- downs last a shorter period of time, but they also allow elevators to keep up and running longer," Smith said, noting that dealing with mechanical problems early on can save time and money long term. Interest in these technologies has risen amid the pandemic, but Smith and Christ both believe demand for them will outlast COVID-19. "What we're looking at now is this heightened interest in hygiene that might slide back a little bit, but it's go- ing to stay at a higher level than it was before," Christ predicted. "Touchless technologies are a convenience." Otis Worldwide at a glance: Employees: 69,000 Elevators maintained: 2 million 2019 net sales: $13.1 billion Independent since 2020 Safe Passage Amid heightened hygiene concerns, Otis puts focus on touchless elevator technology Chris Smith, Vice President of Marketing and Product Strategy, Otis Worldwide Corp. Jennifer Christ, Consumer and Commercial Research Manager, Freedonia Group Amid COVID-19, Otis Worldwide Corp. is releasing a slate of new elevator tech products that could make rides safer. PHOTO | CONTRIBUTED

• Cover