The manufacturers and suppliers of technical services in commercial and industrial buildings have deployed web-enabled technology, smart systems and sensors, and integration across the different services as part of their solutions for some 25 years under a banner of “Intelligent Buildings,” “Smart Buildings,” or “Building Automation.”
Now they have adopted a new term called the Building Internet of Things (BIoT) to describe their future solutions. Building owners and facility managers are left wondering if this is really different and whether it can deliver against their value propositions.
They are, not surprisingly, cautious because they have invested heavily over the last 25 years in smart buildings, and few have realised the benefits promised. The problem is that they have been locked into proprietary systems that lacked robustness and were expensive to operate and difficult to scale up once installed. Smart buildings have evolved painfully and slowly over the last two decades, but at last we are now on the threshold of realizing a fully automatic system that, like the flight controller of an aircraft, does not require the intervention of humans.
All aspects of the building’s technical performance, together with improving the performance of the business enterprise within many of the verticals, can now be brought together. This has been made possible by the Internet of Things (IoT), which allows one common IP platform to link all the sensors and devices together to interchange information and through analytical software, optimise controls automatically. The terminology applied to buildings to describe this is called the Building Internet of Things (BIoT), and the process of morphing all the BAS services into one whole system is now underway.
A BIoT system will overcome the present deficiencies and with time will be less expensive to install and operate and will allow the system to expand by simply adding new sensors and devices onto the network. Needless to say, building owners with large real estate portfolios can’t wait to get their hands on these new toys. Some 10 years ago, IT convergence — the joining together of the enterprise business in buildings with the BAS services — began through using IP communications technology. This has proved to be a winner for building owners, and it has been a major driver in bringing about the birth of the BIoT. And so we now have the possibility to connect any device on the network to any other of whatever functionality and through IoT services and Big Data analytics to make sense of it and immediately fine-tune and automate the process without the need for human intervention.
But while the full BIoT has arrived, apart from demonstration projects, it is today restricted to a few applications where the BAS is not too complex and the same “open communications protocol” is acceptable across all of the devices within each BAS service. However, connecting devices through IP networks has been taken up and is growing fast in virtually all the nine BAS services that we have analyzed in our report but sharing an open communication protocol for all the services is for the moment unlikely to be practical. For this reason, the full implementation of BIoT in commercial buildings is going to take until the end of the decade before it gains a substantial share of the available technical market potential, and cyber security issues are resolved.
We forecast that the market for BIoT including all the BAS services at installed prices was worth approximately $46 billion in 2014 and is forecast to grow to $155 billion in 2020. It should be understood that not all of this will be full blown BIoT covering all the BAS services in one system.
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The ratcheting up process will start by taking the low-hanging fruit and in particular vertical markets and new construction projects where the ROI is best. Growth is likely to accelerate further in the following 5 years as Big Data and cloud services increase their share of the BIoT business. The value of the BAS hardware associated with BIoT projects in 2014 accounted for approximately 55 percent of the total, enablement hardware took a 13 percent share, network communication services 17 percent and IoT data services secured 15 percent.
These numbers include IP connectivity across single and multiple BAS services, but we have yet to identify any complex building that uses one single platform to connect all BAS services, particularly where distributed power and demand response are part of the system. However, we have identified LED lighting control systems in new construction, prestige, medium-sized office buildings that have achieved a full BIoT system across lighting control, energy control, and access control. So full BioT has arrived, and the most successful strategy to move forward fast is to identify where the current technical obstacles have least impact and the benefits are most likely to be realized. New construction projects and retail buildings fall into this category.
At this time most of the initiative and investment in BIoT development is being made by the IoT contingent, including the chip manufacturers and IT communications companies, and if this continues they will become the dominant force in this business. They hold all the new technology to deliver the IoT for a fully automated building. They have invested billions of U.S. dollars in developing products and services; however, they know little about the design, installation, operation, and servicing of buildings, which is still within the purview of the manufacturers of BAS systems. In addition, these companies have direct access to a vast legacy real estate that will need to be retrofitted.
These two camps need to be brought together to combine their expertise if the full benefits of BIoT are to be realized and meet the customer’s buying proposition. During the last three years the major companies in each camp have been working together and more recently have formed strategic alliances to develop both products and markets. An even more positive measure of the need to share skills and expertise has been the rise in acquisition activity across these two technologies. Building owners can expect more IT professionals knocking at their doors to extoll the virtues of BIoT.