Executive Summary: Intelligent Buildings Market Overview

Transcription

1 RESEARCH REPORT Executive Summary: Intelligent Buildings Market Overview Hardware, Software, and Services for Intelligent Building Solutions: Global Market Analysis and Forecasts NOTE: This document is a free excerpt of a larger report. Click on the link above to purchase the full report. Published 2Q 2018 Casey Talon Research Director Benjamin Freas Principal Research Analyst

2 Section 1 EXECUTIVE SUMMARY 1.1 Introduction Digital transformation is redefining business processes across industries. A foundation of IT infrastructure, data, and analytics offers customers new insight, directs their decisionmaking, and creates new opportunities to use core assets in different ways. The digital transformation of the electric grid, which Navigant Research has defined as the Energy Cloud, illustrates some of the most dramatic disruptions for industry incumbents and opportunities for customers and technology providers. The Energy Cloud is a new construct for energy supply and demand with digital assets that can be activated to ensure grid reliability and resilience what was once only a source of energy demand can become a supply resource. For example, the digital transformation of a commercial facility into an intelligent building enables automated shifts in system operations and onsite resources in response to grid signals, weather, or other external triggers that can help balance energy flow, but also opens the door to new business opportunities. The intelligent building can become a platform in the Energy Cloud a transfer point for data, information, or energy that creates new value and revenue for owners and partners. The intelligent buildings market has been growing over the last 20-plus years, but largely through early adopters that were managing the largest, most complex buildings and portfolios. Today, technology innovations associated with the Internet of Things (IoT), cloud and edge computing, and cybersecurity have culminated as an inflection point in the market. The result is a broader set of potential intelligent buildings customers exploring investment opportunities and installing solutions that begin the digital transformation of their smaller facilities or mixed portfolios. Solutions providers need a more sophisticated and comprehensive set of capabilities to support customers through the journey of digital transformation. As a result, there is a growing ecosystem of strategic partners that combine IT innovation, facilities and energy expertise, and business strategy to support building owners. These trusted advisors will help building owners navigate the digital transformation with guidance on technology selection, implementation and management, and long-term strategy that encompasses equipment performance improvement to whole building, campus, portfolio, and asset optimization. This report explores the evolution of legacy technologies in the era of digital transformation, assesses the outlook for enabling hardware, software, and services, and investigates the levers that will determine winners on the supply side and motivate investment on the demand side. The development of the intelligent building platform breaks down siloes between stakeholders objectives and creates a cohesive infrastructure 1

3 of technology and systems that delivers broad energy and business improvements. These improvements can be measured against the metrics that matter most to each of the core stakeholder groups, as illustrated in Figure 1-1. Figure 1-1. Creating a Common Platform for Achieving Stakeholder Goals (Source: Navigant Research) 1.2 Market Evolution The intelligent buildings market emerged in the mid-2000s with software applications that presented a pathway for a paradigm shift for facilities management. Operating commercial buildings was long viewed as a cost center necessary to support business a requirement to house employees or interface with customers. Conventional building systems began shifting to converging systems with analytics and centralized management. The decision to adopt intelligent buildings technology was (and is) driven by explicit business cases that address core customer challenges. Today, the proposition for investing in intelligent building technologies for energy management is only part of the conversation. Customers are looking for solutions that translate a complete data profile of their facilities, systems, and operations into business metrics around cost, experience, and sustainability. The result is an evolving technology landscape. 2

4 Building energy management systems (BEMSs) that were once the foundation of the market are being rebranded and their applications suites expanded. Building management systems (BMSs) that once delivered the technical details of automation and controls to engineering and operations teams are being integrated with greater analytics capabilities and remote accessibility. The line between BEMSs and BMSs is blurring. To further complicate the market, the rapid evolution of technology under the umbrella of IoT is introducing new lower cost alternatives and complements to help engage new customers and deepen the capabilities of existing intelligent building systems. The path forward for owners looking to transform their commercial facilities into intelligent building platforms requires a shift in strategy and processes, investment in technologies and services, and understanding of opportunities that can result from digital transformation: Products and services have evolved as the industry has shifted from a focus on individual components that solve isolated operational issues to a solutions perspective that offers customers a platform of hardware, software, and services to operate their facility with a cohesive and comprehensive business strategy. Enabling technologies for the intelligent building includes automation and controls, information technologies communications infrastructure, and analytics. This report focuses heavily on the convergence of submarkets as the intelligent building construct has matured notably building automation systems (BASs), BMSs, BEMSs, and advanced sensors. Legacy Navigant Research analysis of these subsegments also provides the foundation for the new forecasts presented in this report. Value creation is a way of framing the importance or demand for evolution of the intelligent buildings market. The shifting customer demands and perceived gaps in current offerings represent new revenue opportunities, which mean stronger bottom lines for customers and top line growth for vendors. 3

5 1.3 Market Size Navigant Research presents an optimistic outlook on the intelligent buildings market over the forecast period of as building owners and managers respond to increasing demand for technology-enabled facility improvement. Overall intelligent building solutions revenue is expected to grow from approximately $15.1 billion in 2018 to $67.5 billion in 2027 at a compound annual growth rate (CAGR) of 18.1%, as shown in Chart 1-1. Chart 1-1. Intelligent Building Solutions Revenue by Region, World Markets: $80,000 ($ Millions) $70,000 $60,000 $50,000 $40,000 $30,000 North America Europe Asia Pacific Latin America Middle East & Africa $20,000 $10,000 $ (Source: Navigant Research) 4