A new research report by Memoori shows that The Building Internet of Things (BIoT) is currently being driven by the IT & Communications industry; but it is the Building Automation Systems (BAS) Business that is morphing into BIoT and they should take the lead role if this new epoch of building control is to reach its full potential.
The evolution of Smart Buildings have been painfully slow over the last 25 years but at last we are now on the threshold of realising a fully automatic system that could control a building without the intervention of humans.
All aspects of the buildings technical performance together with improving the performance of the business enterprise could be brought together. This is being made possible by the Internet of Things; allowing one common IP platform to link all the sensors and devices together to interchange information and through analytical software optimize the controls automatically.
Surprisingly the current suppliers of Building Automation Systems have come close to achieving this over the last decade but the solutions to join all the services together have, for the most part, been based on proprietary systems that are not robust and are expensive to engineer, maintain and operate.
A BIoT system will overcome these 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 the building owners of large real estates can’t wait to get their hands on these new “toys”.
However the supply chain to execute BIoT in not yet fully in place and those companies that will have most influence in shaping its future are the IT Communications, Software and Chip manufacturers.
Between them they hold all the new technology to deliver the IoT for a fully automated building. However these companies no little about the design, installation, operation and servicing of buildings, which is, still the ownership of the manufacturers of building automation systems.
This includes a whole range of some 9 categories of building automation systems equipment from building energy controls to video surveillance equipment. To realize BIoT these two groups need to work together otherwise the business will flounder and take much longer to develop.
By 2020 Memoori forecasts that the market for BIoT including all the BAS services at installed prices will be worth approximately $155 Billion. Growth is likely to accelerate further in the following 5 years as Big Data and Cloud services increases their share of the BIoT business.
The value of the BAS hardware associated with BIoT projects in 2014 accounted for approximately 55%, Enablement Hardware look a 13% share, Network Communication Services 17% and IoT Data Services secured 15%.
Projecting the sales of these 4 major components through to 2020 shows a significantly changing picture with IoT Data Services increasing its share to 26.5%, Network Communication Services rising to 22.5%, whilst the contributions from Enablement Hardware and BAS Services will decline to 11% and 40% respectively.
At this time most of the initiative and investment in BIoT’s development is being made by the IoT contingent and if this continues they will become the dominant force in this business. However it is the incumbent BAS industry that is morphing into BIoT driven by IP technology; therefore to get this business moving forward they must take the leading role.
They are the ones that interface with the customer to sell the concept and have the heritage estate that needs to be retrofitted with BIoT. It is still the case that despite all the Hype about IoT “he who sells is king”.
During the last 5 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.
We have tracked over the course of the last 4 years a total of 45 acquisitions ranging from $3.7 million to $3Bn and 171 investment deals relating to BIoT.
Investments have been driven mainly by venture capitalists looking to exploit the projected growth of the market. Provided the two camps work together they won’t have to wait too long.