Smart Buildings

Bringing Small Buildings into the Smart Buildings Market

The vast majority of buildings are small and not very smart, and it is their small size that limits their “intelligence” by restricting their access to smart building technology. A staggering 94% of US office space is housed in properties under 50,000 square feet, according to the latest data from Energy Star, and that proportion is expected to be even higher in many other parts of the world. These smaller buildings represent over 50% of overall US commercial building square footage, according to the DoE, which also estimates that small- and medium-sized buildings (SMBs) represent 44% of total commercial building electricity. However, this “final frontier” of the BIoT market has been largely neglected by smart building technology development.  Costly and disruptive smart building development is neither an affordable nor a wise investment for a lower-budget office market that’s dominated by shorter leases and a fickle tenant culture. The smart buildings ‘vision’ has been designed around complex smart tech […]

Stay ahead of the pack

with the latest independent smart building research and thought leadership.

Have an account? Login

Subscribe Now for just $200 per year per user (just $17 USD per month) for Access to Quality Independent Smart Building Research & Analysis!

What Exactly Do you Get?

  • Access to Website Articles and Notes. Unlimited Access to the Library of over 1,700 Articles Spanning 10 Years.
  • 10% discount on ALL Memoori Research reports for Subscribers! So if you only buy ONE report you will get your subscription fee back!
  • Industry-leading Analysis Every Week, Direct to your Inbox.
  • AND Cancel at any time
Subscribe Now

The vast majority of buildings are small and not very smart, and it is their small size that limits their “intelligence” by restricting their access to smart building technology. A staggering 94% of US office space is housed in properties under 50,000 square feet, according to the latest data from Energy Star, and that proportion is expected to be even higher in many other parts of the world. These smaller buildings represent over 50% of overall US commercial building square footage, according to the DoE, which also estimates that small- and medium-sized buildings (SMBs) represent 44% of total commercial building electricity. However, this “final frontier” of the BIoT market has been largely neglected by smart building technology development. 

Costly and disruptive smart building development is neither an affordable nor a wise investment for a lower-budget office market that’s dominated by shorter leases and a fickle tenant culture. The smart buildings ‘vision’ has been designed around complex smart tech ecosystems that only large commercial real estate projects would have the funds and foresight to develop. This established approach to smart building development will never translate to SMBs. Therefore, the industry needs to find a simpler and cheaper way to seize this market, or risk falling well short of their common environmental and economic ambitions.

“Historically, for operators of smaller buildings, the barriers to entry have been largely financial, with the deployment costs estimated at between $2.50 and $7.50 per square foot, even the most basic BAS system have remained beyond the means of most small businesses,” reads our latest research report: The Internet of Things in Smart Commercial Buildings 2022 to 2027. “Smaller buildings also often lack the prerequisite skills related to areas including IoT device and network management, systems integration and data analytics, further weakening the business case for investment.”

The stakes are also rising, for all buildings, in this age of environmentalism, cyberthreat, and heightened public health that all demand smart solutions. The pandemic triggered lockdowns that emptied office buildings around the world. Now, their ‘return-to-occupancy’ depends on their ability to manage occupant capacity, movement, and interactions in great detail, which is much more feasible with smart tech. The threat of cyberattack in buildings has not usually been a concern for typically “unconnected” SMBs but with many feeling forced to rush into smart tech to keep existing tenants or attract new ones —these poorly protected buildings will become easy targets for cybercriminals. Meanwhile, environmental pressure continues to rise on all forms of real estate.

“Facing ever more stringent regulations governing their energy performance, particularly in the European market, small and medium sized building operators are sorely in need of innovative new solutions to better service the market opportunity,” reads our latest research study. “Factors including a decline in the cost of sensors, networking & communications technologies, are helping to overcome cost related barriers in the market. But some are also now developing and launching more lightweight, flexible offerings that have limited requirements for specialist technical skills, in order to steadily unlock this largely untapped market.”

Several of the established building automation players have developed or acquired technology that brings smart building benefits to the SMB market. Honeywell, for example, launched its Small and Medium Building Administrator in December 2020, providing a scalable building portfolio management system powered by Honeywell Forge. Designed specifically for SMBs, the system promises to save users up to 30% in facility energy costs by improving visibility into building portfolio performance. 

“Managing costs is a significant factor for these businesses yet they currently lack the right resource to easily and centrally manage multiple building sites. A centralized, cloud-based system can drive smarter building operations to meet compliance requirements, energy savings, and market demands,” says Peter Fehl, president of Building Technologies at Honeywell. “Businesses that operate a portfolio of small- and medium-sized locations are facing greater challenges than ever and want to create a comfortable, safer, and healthier environment for their employees and guests.” 

During a successful partnership with WattsenseSchneider Electric also launched a simple and interoperable light BMS solution designed especially for energy efficiency in SMBs. The Schneider-Wattsense Box aimed to reduce integration costs and inconvenient disruptions by hosting extensive IT solutions in the cloud, while also offering built-in cybersecurity. Interestingly though, Wattsense was actually acquired by Siemens in October 2021.

Optergy, meanwhile, released Proton, its web-based building controller that combines both energy and building management features, designed to operate independently within SMBs. While the SMB market is still underserved, these offerings will begin to drive growth from a significant and latent segment of the BIoT sector.

“BIoT technology penetration for small and medium sized commercial buildings is well behind the curve in terms of adoption. This situation is largely a consequence of the business models and economic imperatives that have historically driven the building controls market, but it is clear that the market opportunities for smaller buildings is significant,” states our new report. “The overall BIoT market recovery through 2021 was healthy, growing 21% to rise above the 2019 market total, at just over $47 billion. We forecast that the market will continue to grow at a healthy 12% CAGR, rising from $47.07 billion in 2021 to a forecasted $92.88 billion by 2027.”

Most Popular Articles

Kieback&Peter Cube Berlin
Energy

Kieback&Peter Building Automation Business & Financials Examined

In this Research Note, we examine Kieback&Peter, one of the long-established German manufacturers and systems integrators of building automation solutions and services. This analysis is based on their December 2023 filing of their 2022 company accounts and more recent announcements. Kieback&Peter GmbH & Co. KG was founded in 1927 in Berlin, Germany. This family-owned medium-sized […]

Alibaba Smart Buildings
Smart Buildings

“Open Sesame” Exploring Alibaba’s Smart Building Approach

Initially launched in 1999 as an online marketplace for Chinese-made products, The Alibaba Group has gone on to become one of the biggest companies in the world with a market cap of over $210 billion. While online retail remains Alibaba’s core service offering, the firm has expanded into a huge range of activities, including comprehensive […]

Allegion 2023 Financials Examined
Security

Allegion Access Control Business & Financials 2023 Examined

In this Research Note, we examine Allegion plc, a pure-play provider of security and access solutions. Our analysis is based on their 2023 annual results, presentation, earnings call and 10K Report. We highlight growth in electronic security products, software and corporate venture capital investments in 2023. Note that we reviewed Allegion’s May 2023 Investor Day […]

Subscribe to the Newsletter & get all our Articles & Research Delivered Straight to your Inbox.

Please enter a valid email

Please enter your name

Please enter company name

By signing up you agree to our privacy policy