Smart buildings are the... ahem…building blocks of Smart City infrastructure, but the market for implementation has been lagging. This is due to significant fragmentation of the solutions space and sluggardliness of facilities managers, mostly, according to a new report from ABI Research (News - Alert).
All is far from lost however, as the same report forecasts that smart buildings global facility services revenue will grow from $625 million in 2015 to more than $8 billion in 2021. The bulk of the revenue will be in North America and Western Europe, as large buildings in these regions implement cloud-based smart building platforms or integrate existing building management systems to smart building platforms.
ABI Research said that incumbent service providers have shown little initiative to get in on this space, which will provide opportunities for device OEMs, system integrators, security companies, telcos, and platform vendors to capitalize by offering managed building services, more specifically, smart lighting and HVAC control systems, which ABI estimated will account for 32 percent and 49 percent of revenue from smart buildings by 2021, respectively.
“IoT platforms, such as GE’s Predix, IBM’s Watson, and SAP’s (News - Alert) HANA, in collaboration with facility service providers, like CBRE, ISS World, and ENGIE, are gradually creating inroads by integrating multiple building automation systems to deliver a unified facilities management solution,” said Adarsh Krishnan, Senior Analyst, ABI Research. “But most facility service providers are still in the early stages of evaluating smart building solutions and face the ‘make or buy’ dilemma of whether to develop the solution in-house or collaborate with a third-party technology vendor.”
Even though ABI is predicting that North America and Western Europe will take the lead in coming years, the Asia-Pacific region will not be left behind, accounting for about a quarter of revenues by 2021.
This is probably conservative, and even if it turns out to be accurate, Asian markets will probably outstrip the west shortly thereafter.
“Smart building platforms are seen as a valuable tool to address growing sustainability challenges and customer demands for personalized services, reduce costs, and increase workspace flexibility,” added Krishnan. “Facility managers are exploring opportunities beyond enhancing building energy efficiencies and aim to improve the overall occupant experience across multiple facility services.”
These findings are from ABI Research’s Role of Facilities Management in Smart Buildings.