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By Michael Kanellos

Microsoft (NASDAQ:MSFT) will spend less time at Hohm and more at work.

The software behemoth is currently working with partners to figure out a strategy for software and services for managing energy consumption in commercial buildings, according to Rob Bernard, the company's chief environmental strategist.

"Upwards of 20% of energy can be reduced by not replacing windows but by deploying technology," he said at a gathering at the Commonwealth Club in San Francisco.

Additionally, Microsoft is looking at ways to tie building management systems into predictive analysis tools to better balance energy production and consumption. With predictive analysis tools, air conditioners in buildings could be turned down, for example, to compensate for a sudden decline in power production at a wind farm.

'What are the right ways to structure this ecosystem? Today it is all disconnected sources of information," he said.

If this strategy sounds familiar, it should. EnerNoc (NASDAQ:ENOC), Silver Spring Networks, Serious Materials, Scientific Conservation, Johnson Controls (NYSE:JCI), Schneider Electric (OTCPK:SBGSF), IBM (NYSE:IBM) and Honeywell (NYSE:HON) have all sketched out strategies for improving the energy efficiency of buildings and then tying building energy consumption into demand response/demand management networks for more fluid, efficient power consumption.

Why is Microsoft shifting this way? Buildings account for around 20% of the energy consumption in America, about the same amount that gets consumed in homes. Commercial buildings, however, offer many more opportunities and avenues for curbing power consumption. They are simply bigger, more complex structures.

Additionally, building owners and tenants often hire facilities managers to monitor energy consumption so they can get a better handle on ROI issues. At Microsoft, for instance, a facilities manager once decided to hose off the white roofs on certain buildings with a power washer. Power consumption immediately dropped by 3%.

Microsoft, he added, is already looking at ways to redesign its data centers. "What if you got rid of the building?" You'd need some enclosure for the servers, "but is it not necessarily a big concrete building?"

Bernard also said that the adoption of Hohm, the platform Microsoft released last year to provide consumers with information about energy consumption, has been a bit slow and the process of installing it in a home could be better. Right now, it's not exactly automated. Katie Tweed, a smart grid writer at Greentech Media, was underwhelmed with a trial in her apartment last year.

"I may be a freelance writer, but even so, I definitely make more than six cents an hour," she wrote.

Several other companies in home area networking have grappled with the same problem: How do you get consumers to adopt systems that cost a few hundred dollars that might take several years to pay for themselves?

Bernard did not say Microsoft was killing Hohm. He just said that adoption has been slower than expected and to expect more emphasis on commercial buildings. (Bill Weihl, Google's (NASDAQ:GOOG) Energy Czar, said at the same event that tens of thousands of copies of PowerMeter, Google's home system, have been adopted. Not millions, but tens of thousands.) Bernard also didn't formally define how Microsoft might participate in demand management, but the trend lines seem pretty clear.

Should the rest of the industry fear this? On one hand, history shows that Microsoft does often have a difficult time in breaking into new markets. Windows and Office remain the pillars for profits and revenue. Honeywell, among others, are already championing open source tools like OpenADR for demand response. Cue the "What happens if you have to reboot your building. Har, har" gags.

On the other hand, Microsoft has an enormous collection of talent in its labs and software units. How many mathematicians that have won the Fields Prize work at Silver Spring? Microsoft, along with IBM, Google, HP (NYSE:HPQ) and a handful of others, have a unique reservoir of computing talent to tackle this problem. Rick Rashid, who runs Microsoft Research, told us the company was placing a greater emphasis on predictive tools.

Other fun facts from the event:

--Water is also on Bernards's mind. With IT technology, water consumption in farms could be reduced by up to 50%. That would certainly curb the need for farm subsidies and preserve an increasingly valuable resource.

--Videoconferencing. Both Google and Microsoft love it. (SAP (NYSE:SAP), in the retrofit of its Palo Alto offices, says it has a quicker payoff than any other green technology.) Microsoft has reduced travel costs by 30% per capita with videoconferencing.

--They use a lot of power in China. France's capacity is 135 gigawatts. China adds 100 to 120 GW annually. "There is a new France in power structure in China every year," he said.

Source: Microsoft Moving Into Green Building Management, Demand Response