Speaking at Facilities Show in May, co-located with IFSEC International, Ozge Celik Russell, Senior Analyst, Omdia, presented on how the smart building market is moving forwards since a pause in investment in the pandemic, adding that security will play a significant part in its evolution. Julian Hall reports.
For clarity, Ozge opened up the presentation by defining the term ‘smart buildings’ – being those that deliver building services through control systems that manage building operations, known as Building Management Systems (BMS).
A BMS is a single, centralised or distributed platform that acts as the building’s artificial intelligence. These systems aggregate data from equipment and sensors across many building domains and identify trends in building use and operations, acting upon the data through programmed sequential algorithms in order to reduce energy consumption, provide security and improve occupant comfort.
Almost every industry is going through the same challenge of traditional hardware markets taking on the power of IoT. In particular, that means the move towards a choice of connectivity solution, followed by the rising importance of software and data applications.
One of the biggest drivers of the smart buildings market is endogenous: the convergence of technologies. Any definition of a smart building will either explicitly mention or imply a building management system. The integration of all building domains to ensure optimal and cost-effective building operations is the core of a smart building. Ultimately, however, energy, safety and security and occupant comfort related domains need to be integrated seamlessly – the building needs to become a single ecosystem.
“The energy and security domains together account for 90% of the connected equipment market.”
The convergence of technologies used in smart buildings is driving the move towards full connectivity. The pandemic created a pause point and caused delay in some projects. However, most sectors are expected to bounce back and develop progressively in the next couple of years.
Celik Russell added: “It needs to be mentioned that the pandemic has also been a big blessing for the smart buildings market, in the sense that now there is more interest from investors, a faster pace of technology development focussed on massive system integration and more focus on occupant comfort and space optimisation.”
Omdia estimates that the total available market (TAM) for the global BMS platforms sector in 2020 was more than $3.7bn. The global market is forecast to grow at a CAGR of 6.5% between 2020 and 2026.
In terms of market shares, Tier 1 hardware/software providers lead the market and, in total, the top four companies commanded over 54.1% of the global market share in 2020. According to Omdia’s research, Honeywell leads the global market, accounting for over 16.7% of the TAM in 2020. It was followed by Johnson Controls with 13.5%, and Siemens was ranked third with 12.9%. Schneider Electric had 11% of the market share and was in the fourth position.
Celik Russell drilled down to what was happening in each sector: “The energy domain constitutes the largest part of the connected equipment market, as it includes HVAC, thermostats, lighting, building automation equipment and smart utility metering.”
“The second largest domain is security, which includes access control, fire detection and suppression, intruder detection and video surveillance.”
“The energy and security domains together account for 90% of the connected equipment market.”
Omdia found that open protocols are winning against proprietary ones when the market is broken down by connectivity technology. This point is linked with the demand for seamlessly integrated domains across a smart building.
“Open protocols are easier to work with in terms of master system integration and scalability in smart buildings,” says Celik Russell, adding “61% of the connected equipment market is accounted by open protocol connectivity technologies.”
The push towards sustainability of recent years is a leading driver of adopting smart building technologies. This is hardly surprising as buildings generate nearly 40% of annual CO emissions, and approximately two-thirds of the global building area that exists today will still exist in 2040.
“This makes digitalisation of the existing building stock a key component of reducing the carbon footprint of the built environment,” says Celik Russell, adding “this is why government regulations and incentives have become significant factors pushing implementation of smart building technologies, specifically in the energy domain.”
According to Omdia’s Smart Buildings End Users 2021 Survey, environmental control, energy optimisation and energy monitoring for their buildings are the leading use case for end users.
“We expect this focus on the energy domain within smart buildings to continue both for end users and developers,” says Celik Russell.
“The third major use case is space optimisation, which, combined with the impact of the pandemic on working habits, is expected to remain as an area of focus for the market in the next couple of years.”
The COVID-19 pandemic brought some opportunities for the software market, for example, improving air circulation and cost savings by applying building energy management systems, enabling predictive maintenance of utility equipment through wireless connected sensors and space optimisation based on information from occupancy sensors.
“Overall, we can say that the pandemic created a shift in priorities for building management system users, which further stimulated the sustainability requirements in smart buildings and the move towards integrated and scalable solutions,” says Celik Russell.
“So from 2020 to 2021, the Building Management Solutions platform grew by 6%, and when we publish the next report for 2022, we might end up seeing a larger growth rate here.”
While residential buildings dominate the smart building spend globally, intensifying concern for sustainability issues are likely to increase non-residential deployment.
Digital twins
The virtual fashioning of the building structure utilising building information modelling (BIM) is an emerging element of the planning process for smart buildings.
Prior to construction, a digital twin enables simulating, testing and correcting design options, and digital twins are increasingly expected to improve the operational efficiency of buildings post-construction.
Connecting static data from the construction phase and dynamic data from the operational phase is likely to be a key factor as the building twin becomes a platform for testing and optimisation of building control scenarios.
Edge computing
Edge computing reduces the amount of data sent to the cloud and avoids bottlenecks from internet bandwidth by bringing computing closer to the source of data. Broadly it is all the computing outside the cloud and happening at the edge of the network. The portion of the data created and processed outside a traditional data centre or cloud is expected to rise as this improves latency and enables facility managers to act faster in case of problems.
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