Bems 12-executive-summary

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Bems 12-executive-summary

  1. 1. Tom MachinchickIndustry AnalystEric BloomResearch AnalystEXECUTIVE SUMMARY:Building Energy Management SystemsHardware, Software, and Services for the IntelligentMonitoring, Management, and Control of Energy inCommercial Buildings: Market Analysis and ForecastsNOTE: This document is a free excerpt of a larger report.If you are interested in purchasing the full report, please contactPike Research at sales@pikeresearch.com.Published 1Q 2012
  2. 2. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.1Section 1EXECUTIVE SUMMARY1.1 Market OverviewThe building energy management systems (BEMS) market is changing rapidly. Withtechnological advances in building monitoring and control leading the way to provide hugevolumes of data on building energy use and efficiency, both new and existing vendors inthe BEMS market are discovering innovative ways to capitalize on this information to helpbuildings operate more efficiently.The BEMS market can be considered a nascent market even though there has been afocus on energy efficiency in commercial buildings for quite some time. The landscape ofnew entrants, new technologies, and new methodologies is expanding rapidly and even thewell-established market leaders are finding new ways to present and frame theirbusinesses.1.2 Market OpportunitiesBuilding control and automation systems are enabling access to ever increasing amountsof data – or “big data,” as it is often called. This data is providing significant opportunitiesfor building owners and facilities managers as well as market participants stand to benefitfrom transforming it into usable information. New entrants in the market are discoveringways to analyze the data and identify energy efficiency opportunities in ways that requirelow or no touch with regard to actual time spent in a building. This is significantly changingthe way services like energy audits are performed, thereby significantly bringing down thecost and time spent on these activities. Big data in the building sector is also providinglarge IT firms that specialize in systems integration an opportunity to enter this market withenterprise solutions that can help optimize building performance across an organization orbuilding portfolio. These enterprise solutions are also enabling information to flowthroughout the organization in a coordinated and optimized fashion – from the CEO to thebuilding maintenance staff to the building occupants themselves.Technological advances from other industries are also creeping into the BEMS market.Most of the software solutions are now being offered as software-as-a-service (SaaS),allowing access to information from any location and lowering the cost and effort ofimplementation. Flexible platform solutions are making inroads as well, allowing for thedevelopment of custom applications either internally or through the purchase of customapplications through “app stores.” The United States Green Building Council (USGBC)recently announced the offering of an App Lab to promote access to best practiceapplications in the advancement of Leadership in Energy and Environmental Design(LEED) building certifications and efficient building performance. Companies like JohnsonControls, Indie Energy Network, SCIenergy, and others have developed platforms that willallow access to huge volumes of building data through apps developed by them or others.Some of these platforms are even moving toward the “social” aspects of the BEMScommunity, offering methods for interested parties to connect and share experiences andbest practices. Johnson Controls’ newly announced Panoptix offering is one such system.Several companies have developed strategies to focus on one aspect of a building’soperational infrastructure and take that to a new level of performance. Aircuity andRedwood Systems specialize in the internal environmental quality of the air and lighting
  3. 3. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.2solutions of a building, respectively, with solutions that are affordable and efficient.Companies such as these increasingly see themselves in the business of buildinginformation or building data and not just the air or lighting solutions business. Thisstrategic standpoint opens the door for them, and companies like them, to penetrate othervertical market segments. Identifying themselves with the informational aspects of abuilding, while listening to their clients’ needs, fosters innovation and solutions to real worldproblems.1.3 Competitive EnvironmentCompetition in the BEMS market is stiff, with a wide variety of solutions that largely offervery similar functionality. Such similarities include continuous commissioning,measurement and verification (M&V), actionable alerts for system maintenance, livebuilding energy use data, and benchmarking, to name a few. Successful companies in themarket are finding ways to penetrate and access the market through a variety of marketingchannels (e.g., utility demand side management (DSM) programs), or by specializing in aparticular market segment (e.g., retail building portfolios). For some companies, the clientcan actually be the utility itself. This has proven successful for the utility, along withincreased customer interaction, the promotion of value-added services, and decreasedcosts.From the large established players in the market down to the small startups, an increasedsense of cooperation exists among competitors. Savvy purchasing managers are requiringthe best solutions at the best possible price and, many times, that means combining theofferings of a number of different players into the final project solution. Many companies inthe market are also creating opportunities for smaller competitors to access the market ona larger scale. For example, the advent of application platforms enables best practicesfrom any company in the industry to now be noticed, purchased, and utilized by a wideraudience. Companies like Cypress Envirosystems, which produces equipment thatdigitizes non-digital building equipment like pneumatic thermostats, is opening the older,non-digital building market to affordable and less disruptive building retrofits. Lastly, largefacilities management firms are changing the BEMS landscape as well. Jones LangLaSalle announced its IntelliCommand platform to extend its service offerings to itsworldwide clients. Other facilities management firms, as well as the specialized BEMSmarket participants, will have to take note of this strategic shift.When innovation and innovators are present in a market, the market can be consideredhealthy. It can also be dangerous for those asleep at the wheel, so to speak. Newcapabilities will have to be learned or acquired in order to remain competitive. Most ofthese capabilities will revolve around the data, with the new capabilities ranging fromaccessing, storing, managing, and transforming the data to helping the organization itselftransform the way it utilizes its internal capabilities and resources to optimize itsperformance.1.4 Overview of the MarketGlobally, the world economies are recovering from several years of a recessionaryenvironment and slow business growth. The market for BEMS spending may still feel theeffects of the difficult economic environment in the near term, but expectations areimproving. However, today’s financial constraints also represent a key driver of the BEMSmarket, as companies find that costs relating to energy can be reduced cost-effectivelythrough intelligent building energy management. Conversely, one of the main hurdles totheir implementation is finding the capital or financing to pay for the development as well asinitial installation of BEMS. More and more, however, companies are making room in their
  4. 4. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.3budget for energy efficiency, sustainability, and greenhouse gas (GHG) emission reductionprojects. Increasingly, pressure from a wide variety of external sources, includingcustomers, employees, the general public, investors, building occupants and tenants,governments, and others, is moving large organizations to adopt BEMS.The largest market for BEMS spending is North America, which is forecast to remain soduring the period examined in the report. The second largest market is Western Europe,where interest in BEMS and energy efficiency is high. This market, however, will loseground to the Asia Pacific market in the coming 10-year period due simply to the extremelyrapid growth of projects there, as well as the vast size of the market itself (e.g., buildingstock). Pike Research forecasts that these three regions will experience double-digitcompound annual growth rates (CAGRs) in BEMS spending through 2020, although atvarying levels - with Western Europe being the lowest, and Asia Pacific being the highest.Other regions of the world examined in this report include Eastern Europe, Latin America,the Middle East, and Africa. All of these regions will experience single-digit growth overthe period and modest levels of overall spending. This can be due to a variety of reasonsspecific to each particular region, but mainly it relates to low levels of building stock and/orthe low priority of intelligent building technologies in each region.Pike Research projects that, in 2011, the global market for BEMS solutions reachedapproximately $1.9 billion. Growth in the early years of the forecast period will be relativelymodest due mainly to the fact that businesses are slowly recovering from several years ofa difficult business environment as well as the early stage of many BEMS technologies. Inthe mid to latter years of the forecast period, growth in BEMS spending will accelerate andthe market will end the period in 2020 with a global market size of close to $6 billion, and aCAGR over the forecast period of 13.59%.Chart 1.1 Building Energy Management Systems Market Revenue, World Markets: 2011-2020$-$1,000$2,000$3,000$4,000$5,000$6,000$7,0002011 2012 2013 2014 2015 2016 2017 2018 2019 2020($Millions)(Source: Pike Research)
  5. 5. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.77Section 8TABLE OF CONTENTSSection 1 ......................................................................................................................................................1 Executive Summary....................................................................................................................................1 1.1  Market Overview ...........................................................................................................................1 1.2  Market Opportunities.....................................................................................................................1 1.3  Competitive Environment..............................................................................................................2 1.4  Overview of the Market .................................................................................................................2 Section 2 ......................................................................................................................................................4 Market Issues ..............................................................................................................................................4 2.1  Market Overview ...........................................................................................................................4 2.2  Definition of a Building Energy Management System...................................................................4 2.3  Geographic Segmentation ............................................................................................................5 2.4  Commercial Building Types ..........................................................................................................5 2.5  Global Building Stock....................................................................................................................5 2.6  Current Trends in the BEMS Market.............................................................................................9 2.6.1  Big Data.................................................................................................................................10 2.6.2  Convergence of IT and BEMS...............................................................................................10 2.6.3  Co-opetition ...........................................................................................................................11 2.6.4  Enabling Technologies Fostering Competition......................................................................12 2.6.5  Outside Influences and Algorithmic Modeling.......................................................................13 2.6.6  Older Buildings - an Untapped Market..................................................................................13 2.6.7  Utilities and Utility DSM Programs ........................................................................................14 2.6.8  Platforms and Apps...............................................................................................................17 2.6.9  Cloud-Based Computing .......................................................................................................18 2.6.10  Energy Kiosks ...................................................................................................................18 2.6.11  Commercial Real Estate Management Firms’ BEMS Offerings .......................................19 2.6.12  Wireless Connectivity of Building Automation and Control Systems................................19 2.6.13  Increased Need for Training, Consulting, and Organizational Development....................20 2.7  Market Drivers.............................................................................................................................20 2.7.1  The Benefits of Cost Reduction.............................................................................................21 2.7.2  Enhanced Brand or Public Image..........................................................................................21 2.7.3  Green Building Incentives .....................................................................................................22 2.7.4  National Energy Security.......................................................................................................23 2.7.5  Global Regulatory Landscape...............................................................................................23 2.7.6  New Product Offerings and Ease of Implementation ............................................................27 2.8  Market Hurdles............................................................................................................................28 2.8.1  Split Incentives ......................................................................................................................28 2.8.2  Limited Budgets and Financial Solutions ..............................................................................29 2.8.3  ROI and Project Payback......................................................................................................29 2.8.4  Uncertainty about the Amount of Savings.............................................................................29 2.8.5  Limited Expertise...................................................................................................................30 2.8.6  Value of Implementing a BEMS Solution ..............................................................................32 Section 3 ....................................................................................................................................................33 Technology Issues....................................................................................................................................33 3.1  Components of a Building Energy Management System ...........................................................33 3.1.1  Hardware...............................................................................................................................33 3.1.2  Software ................................................................................................................................33 3.1.3  Services.................................................................................................................................34 
  6. 6. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.783.1.4  Demand Response................................................................................................................34 3.1.5  Key Trends and Commonality of BEMS Features ................................................................35 Section 4 ....................................................................................................................................................39 Key Industry Players.................................................................................................................................39 4.1  Vendor Profiles............................................................................................................................39 4.2  Aircuity.........................................................................................................................................39 4.3  AMEE ..........................................................................................................................................40 4.4  C3................................................................................................................................................40 4.5  Cimetrics .....................................................................................................................................41 4.6  Cypress Envirosystems...............................................................................................................42 4.7  Eaton Corporation .......................................................................................................................42 4.8  EnerNOC.....................................................................................................................................43 4.9  FirstFuel ......................................................................................................................................44 4.10  Gridium........................................................................................................................................44 4.11  Hewlett Packard ..........................................................................................................................45 4.12  Indie Energy Network..................................................................................................................46 4.13  Invensys plc.................................................................................................................................47 4.14  Johnson Controls, Inc. ................................................................................................................47 4.15  Jones Lang LaSalle.....................................................................................................................48 4.16  Noesis Energy (formerly Brazos Software).................................................................................49 4.17  Prenova.......................................................................................................................................49 4.18  Redwood Systems ......................................................................................................................50 4.19  Retroficiency................................................................................................................................51 4.20  Schneider Electric .......................................................................................................................52 4.21  Siemens Building Technologies..................................................................................................52 4.22  SkyFoundry .................................................................................................................................53 4.23  Trane...........................................................................................................................................53 Section 5 ....................................................................................................................................................55 Market Forecasts.......................................................................................................................................55 5.1  Forecast Introduction ..................................................................................................................55 5.2  Market Conditions for Global BEMS Solutions ...........................................................................55 5.3  Forecast Methodology.................................................................................................................55 5.4  Assumptions Determining the Forecast Numbers ......................................................................56 5.5  Regional Market Forecast Overview...........................................................................................57 5.6  Global Market Forecasts.............................................................................................................58 5.7  North America .............................................................................................................................61 5.8  Western Europe ..........................................................................................................................64 5.9  Asia Pacific..................................................................................................................................66 5.10  Other Regions .............................................................................................................................69 Section 6 ....................................................................................................................................................72 Company Directory...................................................................................................................................72 Section 7 ....................................................................................................................................................74 Acronym and Abbreviation List...............................................................................................................74 Section 8 ....................................................................................................................................................77 Table of Contents......................................................................................................................................77 Section 9 ....................................................................................................................................................79 Table of Charts and Figures.....................................................................................................................79 Section 10 ..................................................................................................................................................80 Scope of Study..........................................................................................................................................80 Sources and Methodology .......................................................................................................................82 Notes ..........................................................................................................................................................82 
  7. 7. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.79Section 9TABLE OF CHARTS AND FIGURESChart 1.1  Building Energy Management Systems Market Revenue, World Markets: 2011-2020..........3 Chart 2.1  Commercial Building Stock, World Markets: 2011-2020.........................................................6 Chart 2.2  Commercial Building Stock by Building Type, Percent of World Markets: 2011.....................7 Chart 2.3  Commercial Building Stock by Building Type, World Markets: 2011 and 2020......................8 Chart 2.4  Commercial Building Stock by Building Type Floor Space Growth,World Markets: 2011-2020....................................................................................................9 Chart 2.5  Utility DSM Program Budgets, United States: 2007-2010.....................................................15 Chart 2.6  Utility Demand Side Management Programs by Segment, United States: 2010..................16 Chart 2.7  Building Energy Management Tools in Use, United States: 2010 ........................................31 Chart 5.1  Building Energy Management Systems Market Revenue, World Markets: 2011-2020........58 Chart 5.2  BEMS Market Revenue by Component, World Markets: 2011-2020....................................60 Chart 5.3  BEMS Market Share by Region, World Markets: 2011 and 2020.........................................61 Chart 5.4  BEMS Market Revenue by Component, North America: 2011-2020....................................63 Chart 5.5  BEMS Market Revenue by Building Type, North America: 2011-2020.................................64 Chart 5.6  BEMS Market Revenue by Component, Western Europe: 2011-2020.................................65 Chart 5.7  BEMS Market Revenue by Building Type, Western Europe: 2011-2020..............................66 Chart 5.8  BEMS Market Revenue by Component, Asia Pacific: 2011-2020 ........................................68 Chart 5.9  BEMS Market Revenue by Building Type, Asia Pacific: 2011-2020.....................................69 Chart 5.10  BEMS Market Revenue, Other Regions: 2011 and 2020 .....................................................71 Figure 2.1  Diagram of Split Incentive Market Hurdle, World Markets: 2011 ..........................................28 Table 2.1  Utility DSM Programs by Type and Percent of Adoption, United States: 2010 ....................17 Table 2.2  Types and Participation Rates of Local Incentives, United States: 2007 .............................22 Table 5.1  Building Energy Management Systems Market Revenue, World Markets, 2011-2020........58 Table 5.2  Building Management Spending by Segment, World Markets: 2011-2010 ..........................59 Table 5.3  BEMS Market Revenue by Component, North America: 2011-2020....................................62 Table 5.4  BEMS Market Revenue by Component, Western Europe: 2011-2020.................................65 Table 5.5  BEMS Market Revenue by Component, Asia Pacific: 2011-2020 ........................................67 Table 5.6  BEMS Market Revenue by Component, Other Regions: 2011-2020....................................70 
  8. 8. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.80Section 10SCOPE OF STUDYThis report examines the building energy management systems sector from a global perspective.Pike Research presents a 10-year worldwide forecast and market sizing for seven major regions,including: North America Western Europe Asia Pacific Latin America Eastern Europe Middle East AfricaIn addition to a global view of the BEMS market, Pike Research provides separate market sizingand forecasts for the hardware, software and services markets. Note that Pike Research looks atthe entire BEMS market, including services that are provided as “standalone” (discrete or BEMSspecific services) offerings and those that are embedded in other types of service offerings. Someservices vendors primarily offer BEMS-related services as part of another services engagement,such as in an energy audit, benchmarking, or an enterprise level consulting project.This study also examines the BEMS hardware, software and services competitive landscape toidentify and analyze the key players in this market. Pike Research interviewed a mix of softwareand services vendors and subsequently produced a profile of a selection of those companies.Data CollectionThe forecasts provided in this study represent Pike Research’s best estimates and projections for2011 through 2020, where the base year is 2011. It is based on primary and secondaryinformation obtained in 4Q 2011. During these months, interviews were conducted with more than25 BEMS vendors of various sorts.Secondary research information was collected from a wide range of sources, such as industrypublications, governmental agencies, national and international laboratory research reports,standards organizations, press releases, and industry peer interviews and discussions.Defining Service OfferingsPike Research refers to four major service segments in the use of the term “service offerings” orjust “services”: Consulting Implementation Outsourcing Software support/maintenance and training
  9. 9. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.81ConsultingConsulting services typically consist of: Business strategy advice Process improvement Business process reengineering (an approach to restructure a business process in asignificant way) Operations assessment (an assessment of how effectively an organization usesresources and how well operating units perform) Benchmarking Needs assessment Energy Audits Report and review of energy related functions within a building (energy audits etc.) Change management (includes a communication plan) IT strategy advice IT design Capacity and maintenance planning (future support requirements for IT) Supplier analysisImplementationImplementation services focus on executing the business vision or strategy that has been setforth with respect to carbon management. It often entails the following: Installing and configuring the software Building custom-specific applications and models Creating the data extract, transform, clean, and load data Preparing and automating custom reports Documenting the whole software setup and environment Systems Integration with other building software and Building Automation Components Installation and configuration of software specific hardware componentsOutsourcingIT and business process outsourcing represent a very large segment in the overall servicesmarket. When providing these services, a vendor manages the IT infrastructure and applicationsand/or a particular process within an organization.
  10. 10. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.82SOURCES AND METHODOLOGYPike Research’s industry analysts utilize a variety of research sources in preparing ResearchReports. The key component of Pike Research’s analysis is primary research gained from phoneand in-person interviews with industry leaders including executives, engineers, and marketingprofessionals. Analysts are diligent in ensuring that they speak with representatives from everypart of the value chain, including but not limited to technology companies, utilities and otherservice providers, industry associations, government agencies, and the investment community.Additional analysis includes secondary research conducted by Pike Research’s analysts and thefirm’s staff of research assistants. Where applicable, all secondary research sources areappropriately cited within this report.These primary and secondary research sources, combined with the analyst’s industry expertise,are synthesized into the qualitative and quantitative analysis presented in Pike Research’sreports. Great care is taken in making sure that all analysis is well-supported by facts, but wherethe facts are unknown and assumptions must be made, analysts document their assumptions andare prepared to explain their methodology, both within the body of a report and in directconversations with clients.Pike Research is an independent market research firm whose goal is to present an objective,unbiased view of market opportunities within its coverage areas. The firm is not beholden to anyspecial interests and is thus able to offer clear, actionable advice to help clients succeed in theindustry, unfettered by technology hype, political agendas, or emotional factors that are inherentin cleantech markets.NOTESCAGR refers to compound average annual growth rate, using the formula:CAGR = (End Year Value ÷ Start Year Value) (1/steps)– 1.CAGRs presented in the tables are for the entire timeframe in the title. Where data for feweryears are given, the CAGR is for the range presented. Where relevant, CAGRs for shortertimeframes may be given as well.Figures are based on the best estimates available at the time of calculation. Annual revenues,shipments, and sales are based on end-of-year figures unless otherwise noted. All values areexpressed in year 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100due to rounding.
  11. 11. Building Energy Management Systems© 2012 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.83Published 1Q 2012© 2012 Pike Research LLC1320 Pearl Street, Suite 300Boulder, CO 80302 USATel: +1 303.997.7609http://www.pikeresearch.comThis publication is provided by Pike Research LLC (“Pike”). This publication may be used only as expresslypermitted by license from Pike and may not otherwise be reproduced, recorded, photocopied, distributed,displayed, modified, extracted, accessed or used without the express written permission of Pike.Notwithstanding the foregoing, Pike makes no claim to any Government data and other data obtained frompublic sources found in this publication (whether or not the owners of such data are noted in thispublication). If you do not have a license from Pike covering this publication, please refrain from accessingor using this publication. Please contact Pike to obtain a license to this publication.

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