Report: Smart Building Technology Spend to Reach $22B in 2017
FRAMINGHAM, Mass. – The smart buildings technology market is projected to grow from $7.3 billion in 2014 to $21.9 billion in 2018, representing a 28.4% compound annual growth rate (CAGR), according to a new report by IDC Energy Insights.
After several years of slower-than-expected growth, the market for smart buildings technology is being fueled by increasing awareness of the business values generated by deploying smart building solutions, according to the report.
Smart building technologies have matured to enable facility optimization through the convergence of information technology and building automation. Building owners and key decision makers are increasingly aware of the business value of these solutions; however, adoption of these technologies has been slow due to changes in business processes required for deployment and utilization.
Titled “Global Smart Buildings Forecast, 2013-2018,” key findings of the report include:
Different countries face very different drivers toward the expansion of smart buildings, including owners and managers seeking to reduce and control energy costs (U.S.) to governments driving environmental and energy efficiency objectives (Germany) to meeting energy supply challenges (Japan).
Prior to 2013, the global smart building market grew more slowly than expected due to externalities such as less expensive electricity in several markets and a slow economic recovery leading to deferred capital investments. In 2014 and over the next several years, adoption is expected to recover as the economic recovery takes hold and as energy costs remain a large and variable component of building operation.
Despite the aggressive growth forecast for the smart buildings market, adoption still represents a small share of the total addressable market. The continued development of case studies and best practices by early adopters will promote awareness and support longer-term expectations for market expansion.
With many basic control and monitoring systems in place, a need is developing for intelligent software and external services to help analyze, interpret, and prioritize the data that is being collected.
In developing its forecast, IDC reported several trends were identified. The first is that vertical industry has a large impact on the rate of adoption of smart building technologies. Buildings managed in the government or healthcare verticals, for example, tend to be more mature in their appreciation of the benefits of smart buildings, and more advanced in their deployment. Secondly, investments over the past several years have focused on HVAC systems. Customers are now beginning to expand their evaluation to lighting, plug load, equipment maintenance, and other issues.
“As businesses recover following the ‘great recession,’ building owners continue to focus on managing their operational energy costs and risks. Often, gathering building data is not the issue, rather combining, interpreting, and prioritizing that data is becoming the key challenge,” says Jill Feblowitz, vice president, IDC Energy Insights. “Smart building solutions are valuable technologies for deploying energy management strategies that generate operational efficiencies, cost containment, and sustainability benefits that appeal to key stakeholders across chain of command in building management.”
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