Digitization of the building industry is not so different from other industries. The same waves of disruption seen in the evolution of operating models in retail, hospitality, taxi services, the music industry, and many more, are now lapping on the shoes of the smart building. Former CEO of AOL, Steve Case, has broken these waves into 3 distinct stages to show how industries progress through their digitizations process.
In Case’s First Wave, vendors like AOL and Cisco created ”the pipes” that connected people to the internet. The second wave, he describes, is when disruptive companies take advantage of existing connectivity to upend significant parts of the economy using applications and the mobile and social aspects of the web. Much like the emergence and meteoric rise of companies such as Google, Facebook, and Salesforce. The third wave represents the “cyber-physical revolution,” where the Internet of Things (IoT) strives to connect all unconnected physical things.
The smart building industry now floats, waiting to ride the wave into an era of maturity, where widespread adoption of its technology awaits. According to a recent study by Memoori, the Building Internet of Things (BIoT) market is just beginning to enter a new phase, moving beyond a focus on technologies, hardware, sensors and connectivity to business applications and value delivery through Big Data analytics.
“True industry convergence between the IT and OT worlds has yet to occur, the two worlds are certainly on a collision course, and parties from both sides now need to evaluate where their products and services fit in the evolving BIOT landscape,” suggests our new report Towards Data-Driven Buildings.
“Few (if any) organisations have the expertise in both IT and OT domains to thoroughly dominate the landscape, so it becomes important for vendors both new and old to carefully evaluate the markets in which they want to focus and establishing partnering relationships in other areas of the supply chain to strengthen their market positioning.”
It is simply not enough for vendors to only cover one element of the supply chain. Doing so will leave them isolated and unable to relate effectively to the aims of key decision-makers. Consequently, partnerships have become commonplace, leading to a complex ecosystem within the smart building sector. IoT platforms are a fundamental element of these ecosystems as developers piggy-backing on platform capabilities around data integration, device management and analytics to create compelling new software offerings. However, the selection of IoT platforms is not even, those with the best offering are taking larger pieces of the pie and shaping the direction of the industry.
“Application development seems likely to coalesce around only a select few of the wide range of platforms currently available, with a preference towards the ones with the largest user-base,” explains our comprehensive report. “Businesses are already adopting increasingly more selective approaches to preferred IoT platform vendors, so the weaker offerings in this space will either fade from view or merge with larger players over the coming years.”
The undoubted winners of this competitive ecosystem development are the end users. As more and more developers link to these platform ecosystems, the breadth and scope of offerings available to end users improves. Interfaces and functionality for multiple building systems increases, user interfaces become more flexible, while sophisticated analytics and reporting tools result in an expanding range of use-cases available to the market. Securing access to different elements of the supply chain allows vendors to better serve smart building market verticals.
“Many companies selling BIoT solutions have begun to focus on particular building types or industry verticals rather than trying to sell across all kinds of commercial buildings,” explains the report. “This approach enables a company to focus on developing particular expertise in addressing the pain points or business priorities of a particular user type, rather than partially solving problems for a wide range of users.”
This means that product development, sales, training and marketing efforts can all be tailored to best serve the needs of that particular vertical. As each vertical has different priorities, nuances, and idiosyncrasies. By focusing on one particular vertical or building type vendors can better develop their routes to market and establish a reputation with defined market segments. Once they have established a sustainable market position in a particular vertical, these firms can then more readily expand their offerings to other building verticals.
The demand is growing for integrated platform and data solutions that can seamlessly integrate historically disparate building systems data, digest massive data sets, provide predictive and cognitive analytics and allow for the analysis of data on integrated dashboards. These innovative offerings add value by tapping into the growing demands for better customer engagement and garnering greater insight from the data they generate. For this to take place, progress must be made on standards, protocols, semantic tagging, APIs, and SDKs, only then can we expect to see Steve Case’s third wave roll into the smart building sector.
“There is still time for these changes to occur though. Currently Big Data solutions for smart buildings are at the vanguard of a long list of others who have yet to take their first steps on the journey towards data-driven buildings,” our insightful report explains. “The market opportunity is large and growing, so can support multiple future winners.”