Building performance software suppliers are taking advantage of many different routes to market, which go beyond the traditional systems integrator approach. A multi-channel approach is evident for large and medium-sized new build projects whilst third party routes through System Integrators are favoured for retrofit projects. However as IoT Technology further penetrates Building Automation services the channels of distribution will under go some fundamental changes.
Most building performance software providers target potential customers directly and some regard this approach as a core component of their sales strategy, particularly those companies who are positioned as service providers with a significant multi-site client base, such as EnerNOC and Ecova.
Property management and EEM software providers seem to have had considerable success through the direct channel. However the move to BIoT is likely to persuade building owners to favour companies that can deliver a total solution. Many of the independent software suppliers will find it difficult to convince buyers that they have the expertise and financial muscle to deliver.
Routes to Market for BAS Solution Providers and ESCOs
Companies in this category are already supplying their own software products direct. We believe that the major route to market will come through the BAS and EEMS solution providers and major ESCOs over the next few years.
These organisations will benefit from their expertise across the energy value chain, their ability to offer end-to-end solutions, strong distribution channels, existing installed base and commercial relationships through the provision of EEMS to building owners. However their clients may favour other software products but would prefer them to install a total solution, so independent software suppliers should maintain contact with them.
Routes to Market through System Integrators
System integrators have traditionally supplied BECS solutions for many years and provided they up their skills to supply and install sophisticate IP Networking systems they should be able to win and install IoT systems.
However, they are going to be challenged for SI projects by other system integrators from the Communications and IT Networking industry. Their close connection to the IT business could make them one of the most important routes to market for delivering IoT solutions.
For the medium to small building sector they could become very influential in the decision making process for building performance software.
Routes to Market through Utilities and Power Producers
Building performance software suppliers are also using various indirect routes to market. One emerging channel for EEMS providers is via utility and power producers. As the global energy sector experiences major disruption and fundamental transformation, utility companies are adjusting their business models towards new technologies and services aimed at differentiating themselves in tomorrow’s energy market.
The opportunity for utilities to leverage Smart Building technologies to offer innovative services has been recognized by many firms, who have invested in strategic alliances and technology projects. For example;
- Xcel Energy, a major U.S. electricity and natural gas company, with operations in 8 Western and Midwestern states, and BuildingIQ launched a building optimization pilot program for commercial buildings in the utility’s Colorado territory (Sep 2015).
- NRG Renew LLC, a wholly owned subsidiary of NRG Energy, Inc., the largest independent power producer in the U.S, and Lucid announced a channel partnership involving the adoption of Lucid’s BuildingOS platform in 2,500 office buildings (Jul 2015).
- FirstFuel and E.ON UK partnered to provide the utility’s Energy Toolkit for Small and Medium-sized Enterprise (SME) customers, launched in Dec 2014. E.ON recognized the opportunity to better engage SME customers and FirstFuel brought their customer energy intelligence technology into the Energy Toolkit.
Utilities have also been actively acquiring EEMS companies in order to enhance the services and relationships with their large energy users in commercial and industrial facilities.
Real Estate and Facilities Management Service Providers
The major facilities management outsourcing companies and real estate service providers have been building up their expertise in building performance software, through acquisitions and strategic alliances and are a route to market for many software providers that are looking for an independent third party route.
This article is based information from our report - The Market for Building Performance Software 2016 to 2020.
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