Smart buildings and homes and the “Internet of Things” (IoT) have dominated headlines in recent years. An emphasis on energy efficiency, productivity and sustainability have remained a focus of global governments and corporations. DuckerFrontier has been tracking these developments for years, and we see significant trends impacting the building industry, suppliers to the industry and all companies which interact with Smart technology. Here is what you need to know.
In 2017, the global smart building market accounted for USD 7,458.5 million and is expected to grow at a CAGR of 29.26% from 2018-2023. Although the market for smart buildings is growing in North America and Europe, Asia-Pacific continues to represent the fastest growing market, with a projected CAGR of 33.03%. Specifically, according to the IDC Worldwide Semiannual Internet of Things (IoT) Spending Guide, 36.9% of global spending on IoT will come from APAC (excluding Japan) with China, South Korea, and India the largest spenders. Hugh Ujhazy, Associate Vice-President for IoT and Telecommunications at IDC Asia Pacific comments on the trend:
“Internet of Things across Asia Pacific (excluding Japan) continues to grow as government, municipalities, and enterprises move from proof of concept and tests to live deployments as part of a strategy to enhance productivity and efficiency, build Smart City infrastructures, capitalize on new technologies, and embrace digital transformation.”
With the implementation of 5G technology a soon-to-be reality and an increase of low Earth orbit satellites, broadband IoT connectivity will be omnipresent. Therefore, the adoption of industrial IoT, telematics, smart grids, and smart buildings as the implementation leaders will drastically increase, although still at the early stages (https://futureiot.tech/asia-pacific-to-lead-iot-spending-in-2019/). Such forecasts have spawned tremendous investments by manufacturers in innovation and technological advancements of smart equipment, and imply opportunities for manufacturers of different smart technology.
However, opportunity for smart technology manufacturers is not only about top-line growth in the building industry. What matters more is understanding opportunity nuances by technology segment, as well as building category and tenant type. Despite growth expectations in the market, not all technology segments enjoy the same rate of adoption. Therefore, the greatest opportunity exists for manufacturers who are able to differentiate between segments, excel in those segments presenting the greatest growth potential, and commercialize market-ready solutions.
It’s not about the capture of massive amounts of data, but instead about producing actionable intelligence derived from IoT data. These analytics would be based on Machine Learning, Anomaly Detection, Fault Detection and Diagnostics (FDD), and Predictive Building Maintenance. For example, Smart devices used to produce insights on performance of safety and security systems in a commercial building. Is the perimeter secure? Are tenant workflows enhancing or, inhibiting safety of the work environment? Owners, facility managers, engineers, service providers and tenants all benefit.
Most organizations have little visibility into critical HVAC assets such as chillers, cooling towers, and RTU’s, and no real-time operational status of these assets. Smart devices/systems can capture granular data from these assets across the entire building like temperatures, fan speeds, vibration, flow rates, compressor run times, and energy consumption which are then used to produce operational insights. (Asset Digitization)
Demand for access to real-time alerts and visualizations is now expected by the public and professionals in commercial real estate. Thus, the new trend is for anywhere-access to real-time data and services with real-time cloud delivery, even if you’re not on the building premises.
Energy efficiency will remain at the forefront of IoT Smart Building trends. Most organizations are way behind on implementing energy management systems and efficiency solutions. Smart device systems will provide access to real-time monitoring of building utilities such as electric, water, and gas usage. They can also dive deep to offer real-time wireless sub-metering that enables monitoring of individual tenant spaces and assets.
Especially important for millennials, IAQ continues to grow in importance. Studies have shown a correlation between high concentrations of CO2 and lower performance. Organizations and businesses that care about workforce management and productivity care about IAQ. IoT can help solve this with real time IAQ monitoring. Thus, IAQ will become an even bigger share in the IoT Smart Building market in 2019.
DuckerFrontier’s Industrials team is at the forefront of key trends impacting the industry. We are the premier provider of market, customer and competitive insights to Fortune 1000 industrial organizations. Our goal is to help clients deliver growth solutions to support critical business decisions and growth strategies. How can we help you deliver better outcomes for your business? Contact us here to connect with a team member.