“The Commercial Real Estate (CRE) technology landscape, has grown tremendously over the last five years, with Realcomm estimating 2,200 companies, with at least 500 new companies entering the space in the last five to six years”, states a recent Memoori report on Building Performance Software.
While the definition of CRE technology often includes software for lease management, accounting and other specific real estate administrative functions; our report shows that there has been “explosive growth” in the number of new building performance software vendors and offerings targeted at the real estate sector.
The most significant growth in real estate and property management software is expected to occur in the maintenance management market for smart buildings, as facility managers become increasingly concerned with aging buildings and complying with environmental and safety regulations.
CRE has also found itself on the frontline of developments in the Internet of Things for Buildings, or BIoT, replacing traditional building automation systems (BAS) while adding extra value. “BAS Services from a whole range of sensors and devices from building energy controls to physical security products are gradually but inevitably morphing into a more comprehensive and fully automated BIoT solution”, stated a previous report by Memoori on The Transformation of BAS into the BIoT.
A recent study of facility managers commissioned by Schneider Electric showed “the rise of IoT is prompting facility professionals to invest in analytics” and “reinforces the view that asset and maintenance management systems and software are likely to see strong growth in commercial and industrial facilities in the next few years”.
Brett Wheless, Director of Field Services, Schneider Electric concluded that, “we are seeing a change in attitude among facility professionals that is driving them to think differently about the way they collect and assimilate building data – it’s an incredibly exciting time for the industry”.
Building software is also enabling the evolution of “the office” to “the workspace” by providing greater agility through employee mobility and flexible working.
“New entrants have focused on developing and delivering workplace management solutions that improve the way people work and how organisations operate across the globe”, explains our report. “Resource scheduling management solutions — including the scheduling of people, spaces, meetings and events — are integral to an organisation’s complete digital workplace strategy”.
By harnessing such software CRE firms are positioning themselves at the forefront of the workspace evolution, that competitive positioning in turn drives greater adoption in the market. Our research indicates that the global market for real estate and property management software was worth $2.07Bn in 2015 and by 2020, we forecast this will rise to around $2.82Bn, with a CAGR of 6.4%.
The market for integrated software aimed at supporting processes in the management of commercial and industrial facilities and real estate alone was worth $1.5Bn in 2015, and is expected to reach $1.9Bn in 2020. It has gained ground with the convergence of building energy management software into common data platforms combining other facility, property and asset management solutions.
“A recent trend in Integrated Workplace Management Systems (IWMS) software has been a weakening in popularity of the full integrated suite, encompassing a one-stop-shop approach”, our research also suggests. “Customers want to pick and choose their “apps” regardless of the platform with the expectation that all the solutions can work together”.
As a result, IWMS solutions are more often packaged as individual modules that can be scaled over time. Even established software vendors have committed significant resources to build an integrated approach to facility and real estate management software. IBM’s acquisition of TRIRIGA, an IWMS software provider, in Apr 2011 was key to the foundation of IBM’s Smarter Buildings approach.
Consequently, just last week IBM signed a commercial agreement with ISS Group, one of the world’s largest private employers with over half a million staff to transform the management of over 25,000 buildings.
“The key thing is to find out how people will work in the future. By analysing data from sensors we are helping ISS to uncover new insight that will help to ensure buildings are the kinds of places where people want to be, not just need to be”, said Harriet Green, General Manager, IBM Watson IoT.
CRE software is taking an increasingly important role in the developing story of the smart building and IoT, and will continue to do so as long as commercial building owners and facility operators continue to look for smart ways to manage their buildings more efficiently and at lower cost.
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