FRAMINGHAM, Mass. — A new report, Global Smart Buildings Forecast 2013-2018, which presents the state of the market, drivers for technology adoption, and the business value generated by developing smart buildings, has been released by IDC Energy Insights. The forecast projects spending to grow from $7.3 billion in 2014 to $21.9 billion in 2018, representing a 28.4 percent compound annual growth rate (CAGR).
After several years of slower-than-expected growth, the smart building technology market is expected to grow rapidly as there is increasingly broad market awareness of the business value generated by deploying smart building solutions, noted IDC Energy Insights. Smart building technologies have matured to enable facility optimization through the convergence of information technology and building automation. Building owners and key decision makers are increasingly aware of the business value of these solutions; however, adoption of these technologies has been slow due to changes in business processes required for deployment and utilization. A number of recent case studies and demonstrations are helping educate the end-user market around the business case and benefits associated with developing smart buildings, stated IDC.
Key findings of the report include:
• Different countries face very different drivers towards the expansion of smart buildings, including owners and managers seeking to reduce and control energy costs (United States) to governments driving environmental and energy efficiency objectives (Germany) to meeting energy supply challenges (Japan).
• Adoption rates are expected to vary by region, with the most aggressive adoption in North America, Western Europe, and Asia/Pacific over the next five years.
• Prior to 2013, the global smart building market grew more slowly than expected due to factors such as less expensive electricity in several markets and a slow economic recovery leading to deferred capital investments. In 2014 and over the next several years, adoption is expected to recover as the economic recovery takes hold and as energy costs remain a large and variable component of building operation.
• Despite the aggressive growth forecast for the smart buildings market, adoption still represents a small share of the total addressable market. The continued development of case studies and best practices by early adopters will promote awareness and support longer-term expectations for market expansion.
• With many basic control and monitoring systems in place, a need is developing for intelligent software and external services to help analyze, interpret, and prioritize the data that is being collected.
In developing this forecast, several trends were identified. The first is that the vertical industry has a large impact on the rate of adoption of smart building technologies. Buildings managed in the government or health care verticals, for example, tend to be more mature in their appreciation of the benefits of smart buildings, and more advanced in their deployment. Secondly, investments over the past several years have focused on HVAC systems. Customers are now beginning to expand their evaluation to lighting, plug load, equipment maintenance, and other issues.
“As businesses recover following the Great Recession, building owners continue to focus on managing their operational energy costs and risks. Often, gathering building data is not the issue, rather combining, interpreting, and prioritizing that data is becoming the key challenge. Smart building solutions are valuable technologies for deploying energy management strategies that generate operational efficiencies, cost containment, and sustainability benefits that appeal to key stakeholders across chain of command in building management,” said Jill Feblowitz, vice president, IDC Energy Insights.
For more information, visit www.idc-ei.com.
Publication date: 4/7/2014