The intelligent buildings IoT market: adoption and spending trends and drivers

The Internet of Things (IoT) and the opportunities it offers to enhance building efficiency and tackle evolutions in facility management and building automation is transforming all levels and specializations within the vast overall building reality. IoT, in combination with other factors is even changing the very place and role of the Building Management System or BMS.

The IoT market for intelligent buildings will exceed $22Bn in 2026 from $6.3Bn in 2017 (Navigant Research, see below)

We’ve previously mentioned how, from an IoT investment and spending viewpoint, smart buildings are among the fastest growing cross-industry IoT use cases until at least 2021. We also covered data from other research that showed the drivers in the global BMS market (software) until 2023 whereby IoT and its good friends data analytics and so forth, are one of the drivers of the BMS industry which is poised to grow with a double-digit CAGR in the period 2017-2023.

At least as important are the expert opinions gathered across several interviews on building and facility topics such as the role of IoT in building management, the impact of IoT on the critical power building market, the game-changing role of IoT in light and room control and in home automation applications, the role of IoT in small to medium building energy efficiency, the list goes on.

Global market for IoT for intelligent buildings

The IoT market in commercial buildings: from $6.3 billion in 2017 to over $22 Billion in 2026

The growing importance of IoT for intelligent buildings is also emphasized in a Summer 2017 report by Navigant Research.

According to the press release, the company estimates that the worldwide IoT market for intelligent buildings will exceed $22 Billion in 2026. By way of comparison, for the current year 2017, Navigant Research sees a global IoT for intelligent buildings market of $6.3 billion in 2017.

The research can only very partially be compared with the previously mentioned report on BMS market evolutions. First, Navigant Research looks at the total IoT market in commercial buildings. In other words: all hardware, software and services, including for instance building energy management systems (BEMS) or energy management systems (EMS), if you prefer. As mentioned in our BMS evolutions overview’s terminology section, a BEMS/EMS is not a building management system or BMS and that’s indeed what the other report has been looking at.

This being said and leaving the precise meaning of the intelligent building aside let’s take a look at some of the main drivers of the growth of IoT for intelligent buildings forecasts as summed up in the press release from Navigant.

Navigant Research IoT in intelligent buildings quote analyst Christina S Jung - picture courtesy Navigant source Christina Jung on Twitter
Quote Navigant Research analyst Christina Jung – picture source Ccourtesy Navigant – Christina Jung on Twitter

IoT in intelligent buildings: the multiple drivers of increasing adoption and spending

Not too many surprises on that level but important to remind some key drivers of growing IoT adoption and spending for intelligent buildings:

  • The pressure of building owners (so,in this case commercial building owners) to invest in intelligent building technologies which leverage the IoT.
  • Within the scope of that pressure the need of building owners to get better insight on building operations and on equipment. Do think maintenance and asset management, efficiency, cost savings, key insights for actions to take and of course the increasing expectations of the occupants of commercial buildings.
  • In that context of “the customer of the customer of the customer” think about the clients of commercial building owners such as organizations who are not just looking to leverage IoT and intelligent solutions for myriad reasons themselves but also want to be in buildings where operations are optimal and need to be able to say that they are housed in efficient and ecology-friendly state-of-the-art buildings (pressure of clients, pressure of peers included). Moreover, these organizations have customers too, with workers being important internal customers who also have their expectations.
  • Also within the scope of the pressure of building owners and closely related to the others we note the need to access “real-time data for productivity, convenience, and sustainability”. That pretty much speaks for itself: productivity for all stakeholders (including the staff of the customer), same for comfort and, let’s not forget, regulations and cost control and in and beyond that scope the higher importance of energy management which is driving BMS evolutions as well. And of course there is a premium for those owners who offer it all.
  • The evolutions in the markets of the involved technologies whereby, just as is the case with the acceleration of IoT overall, declining prices (here in hardware), in combination with increased storage and computing power boost adoption – and thus by definition also spending of IoT in intelligent buildings. Cloud computing is mentioned as key here.
  • The benefits of IoT in intelligent buildings. It wouldn’t of course make much sense to invest in IoT for intelligent buildings just because of computing and storage power or declining costs nor because of building owner pressure (although that is a big and complex one). On top of benefits with regards to operations, maintenance, building value, the results of enhanced energy management and so forth Navigant also mentions revenue generation services – and that is still all too often forgotten, not just in buildings but with regards to IoT monetization and the development of new services and sources of revenues overall. It doesn’t even need to be THAT hard, with for instance facility management services as this simple case shows or by combining data from several buildings and leverage it in novel ways to whomever can use the derived insights (just as telcos do).

The last word is for Navigant research analyst Christina Jung: “Leveraging Internet-connected devices that collect and communicate data and software for data aggregation and analysis, IoT-enabled intelligent building solutions are secure, scalable, and interoperable. They support open communications and standards within the building space, assisting with reduced costs and improved integration possibilities”.

IoT for intelligent buildings market evolutions and drivers according to Navigant Research
IoT for intelligent buildings market evolutions and drivers according to Navigant Research

More in the press release and on the report page where you can also see the table of contents before buying it.


Top image: Shutterstock – Copyright: TZIDO SUN – All other images are the property of their respective mentioned owners.