Smart Buildings

M&A brings Consolidation & Focus to the Building Performance Software Business

Our report on the Building Performance Software (BPS) business demonstrates that despite some 150 confirmed acquisitions in the last 6 years, the industry has at least 350 established suppliers delivering across 16 different market segments. These segments overlap and cause confusion when building operators are evaluating how they meet their value propositions. This is particularly critical now that the major real estate owners are in the midst of investigating the impact of the Building Internet of Things (BIoT) on their business and they need to know what measures are being made by the BPS industry to meet this challenge. The good news is that our report shows that right across the western world M&A, Investment and Strategic Alliances are bringing together software solutions to meet the BIoT challenge. This is absolutely vital because the data from these software packages will eventually need to be processed by IoT Data Services such as Big Data and Machine […]

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Our report on the Building Performance Software (BPS) business demonstrates that despite some 150 confirmed acquisitions in the last 6 years, the industry has at least 350 established suppliers delivering across 16 different market segments.

These segments overlap and cause confusion when building operators are evaluating how they meet their value propositions. This is particularly critical now that the major real estate owners are in the midst of investigating the impact of the Building Internet of Things (BIoT) on their business and they need to know what measures are being made by the BPS industry to meet this challenge.

The good news is that our report shows that right across the western world M&A, Investment and Strategic Alliances are bringing together software solutions to meet the BIoT challenge. This is absolutely vital because the data from these software packages will eventually need to be processed by IoT Data Services such as Big Data and Machine Learning algorithms.

The report looks right across the structure and competitive landscape identifying some 358 players within 7 broad sectors reviewing the major players strategy in merger and acquisition, investment and strategic alliance with other players to bring together a business model that will meet the buyers needs over the next ten challenging years.

The highest number of acquisitions occurred last year, 45 in number, 30% of the total number of 150 since 2010. With 27 transactions having already been completed this year up to the end of May, we expect acquisitions of building performance software providers to continue at the same level as 2015, as consolidation continues in this fragmented market.

Although we cannot claim that our database of deals is exhaustive, it is comprehensive and helps to paint a picture of the mood in the market as well as the M&A and partnering strategies of its respective major players.

The BPS business in 2015 was worth $12Bn and we forecast that it will grow to $18.75 by 2020 delivering a CARG of 8.1%. However there is a wide variation of growth and size between the 16 different segments. We believe that the technical market potential for BPS would allow for higher rates of growth but that requires the suppliers to make a much more focused effort to meet the buyers needs.

In Table 11 below, we have shown the breakdown of acquisitions by category from 2010 to May 2016 as a percentage of the total number of acquisitions in the commercial building market. Enterprise Energy Management, Physical Security and Real Estate & Property Management software accounted for 62% of all deals.

This article has been taken from our report published earlier this year - The Market for Building Performance Software 2016 to 2020

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