In this Research Note, we examine the Smart Buildings Division of ABB, based on their activities throughout 2021, updating our previous article, ABB Ramps Up its Mid-Market Commercial Building Automation Business, which highlighted their acquisition of Cylon.
The Smart Buildings Division offers a broad portfolio of home and building automation solutions as well as a portfolio of electrical distribution systems and products. The division, one of 6 business units of the $13.2 billion Electrification segment of ABB, reports revenues in the range of $2,750 to $3,250 million for 2021. Mike Mustapha recently took over as President of the division.
ABB views its Smart Buildings division as a high-growth segment with a focus on expanding its portfolio for commercial buildings through innovation with digital building management systems and bolt-on acquisitions. Their portfolio of building and energy management systems includes Cylon’s Active Energy solution, rebranded to ABB Ability Building Ecosystem, i-bus KNX intelligent building control systems and ABB's Aspect IBMS (Integrated Building Management Solutions). To support their growth ambitions, the division has recently focused on partnering with and acquiring startups.
In April 2021, the group completed the acquisition of a majority stake in Enervalis, a Belgian provider of energy management software with $1 million revenues and 22 employees. Founded in 2013, Enervalis has developed a platform based on artificial intelligence (AI) and machine learning (ML) for the smart control of energy assets such as HVAC installations, heat pumps, boilers, and batteries. The Smart Buildings component of the Enervalis Smartpower Suite addresses residential homes, multi-occupancy buildings, and commercial real estate. The platform claims to improve energy efficiency significantly, compared to traditional Building Management solutions.
In October 2021, ABB Technology Ventures was the lead investor in the $24 million Series A funding round of Canadian start-up company BrainBox AI which has developed predictive and self-adaptive artificial intelligence to optimize buildings’ energy usage, carbon footprint, and operational efficiency. To date, BrainBox AI covers over 100 million ft2 of building space across five continents by providing real estate asset owners with a scalable tool to achieve their net-zero objectives. The strategic partnership allows ABB’s Smart Buildings division to combine its existing portfolio of digital solutions, particularly the ABB Ability Building Ecosystem, with BrainBox AI’s autonomous AI technology. A key part of the relationship between BrainBox AI and ABB included a global distribution agreement to bring the AI-driven solution to ABB’s existing customer base. This agreement was announced in January 2022.
In a high-profile Asian deployment, ABB has supported the construction of the New Development Bank (NDB) headquarters in Shanghai by installing an intelligent and integrated building controls system to manage indoor lighting, electric curtains, and windows that involve more than 8,000 control circuits. Energy savings of more than 15% compared to conventional systems can be expected. At the heart of the NDB Headquarters is the ABB i-bus KNX intelligent building control system, which is connected to the intelligent management platform for the NDB Headquarters and the cloud service center of Shanghai World Expo Park. Data can be fed back to the management platforms in real-time for integrated statistics and analysis of energy consumption, allowing facilities managers to make informed decisions on where and how lighting and energy can be controlled to meet occupancy demand.
In a move to demonstrate ABB's expertise in digital energy management solutions, ABB India’s corporate office building within its Peenya campus in Bangalore has been repurposed as a showcase for digital building automation and energy management solutions. It is the first ABB facility to deploy ABB's Aspect IBMS (Integrated Building Management Solutions) technology. This is combined with ABB Ability Building Ecosystem with Active Energy and Asset Manager. The nearly 500 connected products with embedded intelligence are designed to significantly reduce overall energy consumption and carbon footprint while saving energy costs by up to 30%.
While ABB only launched ABB Ability Building Ecosystem in the United States market in July 2021, the division anticipates high growth for the platform in the coming years, with up to 20 buildings in 2022. ABB’s Smart Buildings innovation strategy to expand its solutions beyond connected electrical distribution products appears to be taking shape.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.