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VET4SBO Level 1 module 4 - unit 4 - v0.95 en
1. ECVET Training for Operatorsof IoT-enabledSmart Buildings (VET4SBO)
2018-1-RS01-KA202-000411
Level: 1
Module 4: Basics for the operation of smart buildings
using IoTs to improve the flexibility and the intelligence
in satisfying human comfort and/or energy efficiency
Unit 4.4: Prospects for smart building market
2. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
3. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
4. The Smart Buildings Market
• Smart Building Market - “The integration of buildings, technology
and energy systems”
• Building Automation Systems
– Intelligent Security, Video Surveillance, Access Control, Emergency
Management, Building Energy Management, HVAC Control, Lighting
Control, Infrastructure Management, Parking Management, Smart Water
Management, Elevators/Escalators Management and many more systems
https://pixabay.com/photos/success-
curve-arrow-turn-on-2917048/
5. The Smart Buildings Market
• Smart Buildings and Internet-of-Things(IoT) can:
– Improve Energy Efficiency
– Increase Productivity
– Boost Sustainability
https://pixabay.com/vectors/energy-
efficiency-energy-154006/
https://pixabay.com/illustrations/nature-
earth-sustainability-leaf-3294632/
6. The Smart Buildings Market
• Current Situation – Buildings are responsible for:
– 36% of greenhouse gas emissions
– 40% of total energy consumption
– 30% of energy used wasted (~$100bn per year)
– 75% of lifetime building costs – maintenance and operating expenses
https://pixabay.com/photos/smart-city-
circuit-board-4308821/
7. The Smart Buildings Market
• Smart Buildings Market potential:
– Integrated building automation/management
systems
– Adoption of IoT technologies (including AI, Big
Data,Asset Digitization and Condition
Monitoring, Real-Time Cloud Visualizations,etc.)
– Effective consumption management and lower
operational costs
https://pixabay.com/photos/time-
businessman-tablet-gears-2676366/
8. The Smart Buildings Market
• Smart Buildings Market potential:
– Increased governmental initiatives and
regulations on energy efficiency,green buildings,
eco-friendly infrastructure
– Digital Transformation – redefining business
processes across industries
– IT infrastructure, data and analytics – new
insight, direct decision-making, new
opportunities in using assets
https://pixabay.com/photos/time-
businessman-tablet-gears-2676366/
9. The Smart Buildings Market
• Constraints limiting the market growth:
– Complex operational procedures (integration of components)
– High initial investment (cost and installation)
– Lack of skilled and experienced professionals (for maintenance, etc.)
• However, the rapid evolution of IoT is introducing lower cost
and less complex alternatives
https://pixabay.com/illustrations/iot-
internet-of-things-network-3337536/
10. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
11. The Smart Buildings Market
• Technology Factors affecting the
market
– Increased adoption of IoT
– Communication standards and protocols
for integrating different devices
– Minimum use of wires due to the
emergence of wireless technologies
– Integrated security and safety systems
https://pixabay.com/photos/laptop-
computer-technology-monitor-3190194/
12. The Smart Buildings Market
• Key Technologies
– Artificial Intelligence (AI)
– Machine Learning
– Mobile Edge Computing
– 5G Networks
– Big Data
– Fault Detection and Diagnostics
– Predictive analytics
https://pixabay.com/photos/laptop-
computer-technology-monitor-3190194/
https://pixabay.com/illustrations/accessibil
ity-browsing-5g-business-3570138/
https://pixabay.com/illustrations/analytics-
information-innovation-3088958/
13. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
14. The Smart Buildings Market
• Economic Factors affecting the market
- High initial cost of deployment – €22-65
per to m2 (BMS)
- Improved energy efficiency and
decreased operational/utility costs - up to
40% decreased energy consumption https://pixabay.com/illustrations/diagram-
icon-business-symbol-chart-2008478/
15. The Smart Buildings Market
• Economic Factors affecting the market
- Improved comfort – up to 18% improved
comfort
- Increased productivity – up to 3%
increased productivity
- Strict initiatives, laws and regulations –
towards energy efficiency and
sustainability
https://pixabay.com/illustrations/diagram-
icon-business-symbol-chart-2008478/
16. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
17. The Building Management Systems Market
• The BMS market – BMSs are an important sub-market of the
Smart Buildings Market, once being the foundation of the
market, but now rebranded
• Market size of around $6.65B in 2016
• Forecasts expect the market to grow
up to $19.25B by 2023
• Compound Annual Growth Rates
(CAGRs) of 16.71%https://pixabay.com/illustrations/graph-
chart-growth-report-analyst-3068300/
18. IoTs and the Smart Buildings Market
• The increasing adoption of IoTs is expected to further boost
the Smart Buildings Market, by providing greater analytics
capabilities and remote accessibility
• Market size of around $12.4B in 2018
• Forecasts expect the market to grow
up to $57.8B by 2024
• Conservative Compound Annual
Growth Rates (CAGRs) of 20%
• More optimistic CAGRs of more than
30%
https://pixabay.com/illustrations/graph-
chart-growth-report-analyst-3068300/
19. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
20. The Total Addressable Market (TAM) for IoTs and
the Smart Buildings Market
• The Global combined IoT market – not only the Smart Building
Market
• Market size of around $235B in 2018
• Forecasts expect the market to grow
up to $949B by 2024
• Conservative CAGRs of 20%
• More optimistic CAGRs of around 30% https://pixabay.com/illustrations/graph-
chart-growth-report-analyst-3068300/
21. The Total Addressable Market (TAM) for IoTs and
the Smart Buildings Market
• The IoT-related TAM in the Smart Buildings Market
• A TAM of 5.27% in 2018
• To grow slightly up to 6.1% by 2024
https://pixabay.com/illustrations/chart-
percentage-diagram-target-1569213/
22. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
23. The Smart Buildings Market
• Smart Building Market by Type
1) Building Automation Software and
Hardware (including Automation & Controls,
Analytics Vendors and Device Manufacturers)
– Intelligent Security Systems, Building
Management Systems, Infrastructure
Management, Network Management System
2) Services (including engineering,
installation, maintenance, etc.) – Professional
and Managed Services
https://pixabay.com/illustrations/smart-
home-system-collection-bulb-3720021/
24. The Smart Buildings Market
• Services Segment - to grow at the highest CAGR (2017-22)
Implementing intelligent automation and
technologies for the efficient operation and
maintenance of buildings in a cost-effective
manner using optimal solutions
https://pixabay.com/illustrations/smart-
home-system-collection-bulb-3720021/
25. The Smart Buildings Market
• Smart Building Market by End-User
1) Commercial Buildings
2) Industrial Buildings
3) Residential Buildings
https://pixabay.com/illustrations/smart-
home-system-collection-bulb-3720021/
26. The Smart Buildings Market
• Residential Buildings – to grow at the highest CAGR (2017-22)
- Increasing penetration of connected
homes and DIY home automation
systems
- Need for improved safety and security,
real-time monitoring, intelligent
management of infrastructure, etc.
https://pixabay.com/illustrations/smart-
home-system-collection-bulb-3720021/
27. The Smart Buildings Market
• Residential Buildings – to grow at the highest CAGR (2017-22)
- In EU-28, there are around 250 million
buildings of around 23 billion m2
- Each building consumes around 12.5
MWh of energy per year or 158 KWh/m2
per year
https://pixabay.com/illustrations/smart-
home-system-collection-bulb-3720021/
28. The Smart Buildings Market
• Commercial Buildings – Major End-User
- Increasing productivity and decreased
operationalexpenses
- Real-time monitoring, intelligent
management of infrastructure, etc.https://pixabay.com/illustrations/smart-
home-system-collection-bulb-3720021/
29. The Smart Buildings Market
• Commercial Buildings – Major End-User
- In EU-28, there are around 19 million
buildings of around 7 billion m2
- Each building consumes around 88 MWh
of energy per year or 230 KWh/m2 per
year
https://pixabay.com/illustrations/smart-
home-system-collection-bulb-3720021/
30. The Smart Buildings Market
• Commercial Buildings – Major End-User
- Commercial Buildings:
- Offices (Private and Public)
- Wholesale and Retail Trade Buildings
- Hotels and Restaurants
- Health Care Buildings
- EducationalBuildings
https://pixabay.com/illustrations/smart-
home-system-collection-bulb-3720021/
31. The Smart Buildings Market
• Faults and Inefficiencies in buildings
- Wastes of 5-20% of energy consumed in
buildings (for HVAC, lighting, water
heating) due to faults and inefficiencies
- Considerable space to increase energy
efficiency and eliminate resources’
waste
https://pixabay.com/photos/smart-city-
communication-network-4168483/
32. The Smart Buildings Market
• Faults and Inefficiencies in buildings
- Residential buildings: Wastes of around
600 KWh-2.5 MWh of energy per year
per building or 8-32 KWh/m2 per year
- Commercial buildings:Wastes of around
4.5-18 MWh of energy per year per
building or 11.5-46 KWh/m2 per year
https://pixabay.com/photos/smart-city-
communication-network-4168483/
33. The Smart Buildings Market
• A hotel Use Case
- A hotel of 4,000 m2
- Consumes an average of 688 MWh per
year
- Equivalent of 172 KWh per m2 per year
- This means 34-138 KWh per m2 per year
are wasted due to faults and
inefficiencies
https://pixabay.com/photos/smart-city-
communication-network-4168483/
34. The Smart Buildings Market
• A hotel Use Case
There is a lot of potential for increasing
energy efficiency, reducing resources’
waste, better managing the energy
consumed and thus, gaining in economical
termshttps://pixabay.com/photos/smart-city-
communication-network-4168483/
35. The Smart Buildings Market
• Startup companies have a big impact on the Smart Buildings
Market
• Over $2.4B invested in startups in 2018
• Total capital invested in the market has
increased 6 more than 6 times since 2012
($6.8B spent between 2012-2018)
• Record investment year that increased
investors’ confidence in the market
• Billions spent in acquisitions by “major
players”
https://pixabay.com/illustrations/startup-
start-up-growth-hacking-1993900/
36. The Smart Buildings Market
• Startup companies have a big impact on the Smart Buildings
Market
• 482 startup companies founded
between 2009-2018
• 109 of them acquired and 13 filed an
Initial Public Offering (IPO)
• 2018 accounts for over 37% of these
acquisitions
https://pixabay.com/illustrations/startup-
start-up-growth-hacking-1993900/
37. The Smart Buildings Market
• Important Acquisitions of Startups
• Siemens acquired three (3) California-
based smart building software suppliers
(Enlighted, Building Robotics & J2
Innovations) to enhance its own IT
infrastructure and capabilities of its own
BMS platform (Desigo)
https://pixabay.com/illustrations/startup-
start-up-growth-hacking-1993900/
38. IoTs and the Smart Buildings Market
• Important Acquisitions of Startups
• Honeywell acquired a German company
known for its conveyor solutions
(Transnorm) to support its automation
solutions, warehouse execution system
software and services
https://pixabay.com/illustrations/startup-
start-up-growth-hacking-1993900/
39. IoTs and the Smart Buildings Market
• New constructions and retrofits
• Over 80% of new construction involves
at least one (1) facet of IoT or related
technologies
• Around 90% of legacy buildings has
issues and requires substantial
retrofitting https://pixabay.com/photos/building-
construction-site-cranes-768815/
40. IoTs and the Smart Buildings Market
• New technologies will support new and enhanced smart
building system related applications and services
• 33% of the market to be powered by
Artificial Intelligence technologies
• Other technologies: Mobile Edge
Computing, 5G Networks, real-time IoT
data analytics, Asset tracking and more
https://pixabay.com/photos/forward-
businessman-tablet-control-3277744/
41. IoTs and the Smart Buildings Market
• The most growing and fastest growing economies of the Smart
Building Market
• North America and Europe are
currently the largest markets
• North America expected to lead the
market with 36% share
https://pixabay.com/illustrations/backgrou
nd-data-network-web-3228704/
42. IoTs and the Smart Buildings Market
• The most growing and fastest growing economies of the Smart
Building Market
• Asia-Pacific (APAC) is also a fast-
growing market (CAGR of 33.03%
between 2018-2023)
• 36.9% of global spending on IoT will
come from APAC (excluding Japan)
• China, South Korea and India being the
big spenders
https://pixabay.com/illustrations/backgrou
nd-data-network-web-3228704/
43. IoTs and the Smart Buildings Market
• The most growing and fastest growing economies of the Smart
Building Market
Governments, municipalities and
enterprises move from proof of concept
and tests to live deployments to enhance
productivity and efficiency, build smart
city infrastructures, capitalize new
technologies and embrace digital
transformation
https://pixabay.com/illustrations/backgrou
nd-data-network-web-3228704/
44. IoTs and the Smart Buildings Market
• The EU Smart Building Market
• Sales of smart systems are expected to
triple by 2022 in EU
• Total number of smart systems to grow
from 2.9 million (2018) to 8.1 million
(2022) in France, Germany, Italy, Spain,
UK and the Nordics (Denmark, Norway,
Sweden, Finland)
https://pixabay.com/illustrations/globe-
earth-magnifying-glass-hand-71443/
45. IoTs and the Smart Buildings Market
• The EU Smart Building Market - Total number of smart systems
46. IoTs and the Smart Buildings Market
• The EU Smart Building Market – Key player
• Increased initiatives towards smart and
zero energy buildings by the region’s
governments
• Energy Performance of Buildings
Directive (EPBD) to enhance existing
infrastructure and lead to growth of
market
https://pixabay.com/illustrations/globe-
earth-magnifying-glass-hand-71443/
47. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
48. Indicative Business Model Canvas
Key Partners Key Activities Value Proposition CustomerRelationships CustomerSegments
Hardware Vendors
Software Vendors
System Integrators
Universities &
Research Centers
Sales
Platform
Development
Research Technical
Support
Building Monitoring
& Control
Early detection of
faults and leakages
Energy efficiency
Decision Support –
analytics and
semantic reasoning
Human Comfort
Personal assistance at early
stages
Automated Services/Routine
Tasks
Reduced Risk
Increased profit
Commercial Buildings
Software Vendors
Sensor Vendors
System Integrators
Insurance Companies
Construction Companies
Universities & Research
Centers
Energy Auditors
Key Resources Channels
Patents
Hardware/software
infrastructure
Human Capital
Pilots
Procurement
Online Sales
Partner’s Channels
Cost Structure Revenue Streams
Cloud Platform
Salaries
Trademarks and other IPR
Legal/Accounting expenses
Subscription to Platforms as software-as-a-service
Services and software in procurements
Fees for data analytics
IPR Licensing to 3rd parties
49. 4.4 Prospects for smart building market
1. The Smart Buildings Market
– Technology factors affecting the market
– Economic factors affecting the market
2. IoTs and the Smart Buildings Market
3. The Target Addressable Market (TAM) for IoTs and the Smart
Buildings Market
4. General Information on the Smart Buildings Market
5. Indicative Business Models
6. Key Players of the Smart Buildings Market
50. Key Players of the Smart Buildings Market
• Corporate Giants of the Global Smart Buildings Market
• ABB Group
• Building IQ
• Cisco Systems
• Delta Controls
• EnergyCAP
• EnerNOC
• General Electric
• Hitachi
• Honda Smart Home
• Honeywell
• IBM Corporation
• Johnson Controls
• Legrand
• Microsoft
• Schneider Electric
• Siemens AG
• Trane
• United Technologies
51. Key Players of the Smart Buildings Market
• Startups of the Global Smart Buildings Market
• 75F
• Accuware
• Blue Pillar
• Build Pulse
• CANDI Controls
• Control Envy
• Enlightened
• Envio Systems
• eSight Energy
• Gridium
• J2 Innovations
• Razberi Technologies
• SecuriThings
• SensorFlow
• Universal mCloud
• Veridium
• Verdigris Technologies
• Zwipe
53. Glossary
• Market – an actual/virtual place where forces of demand and
supply operate and where buyers and sellers interact (directly or
through intermediaries) to trade goods, services or contracts or
instruments, for money or barter.
• Market growth – the increase or decrease in the size of a market
for a product or service over time, typically measured as the
percentage change in total sales in an industry or productcategory.
54. Glossary
• Compound Annual Growth Rate (CAGR) – the rate of return
that would be required for an investment to grow from its
beginning balance to its ending balance, assuming the profits
were reinvested at the end of each year of the investment’s
lifespan.
• Energy Efficiency – the use of energy in an optimum manner to
achieve the same service that could have been achieved using
a less efficient manner, the practice of reducing the energy
requirements while achieving the required energy output.
55. Glossary
• Productivity – a measure of the efficiency of a person,
machine, system, etc. in converting inputs into outputs,
computed by dividing average output by the total costs
incurred or resources (capital, energy, material, personnel)
consumed.
• Sustainability – the continued development or growth, without
significant deterioration of the environment and depletion of
natural resources on which human well-being depends.
56. Glossary
• Startup – a company in the first stage of its operations, often initially
bankrolled by their entrepreneurial founders as they attempt to
capitalize on developing a product or service for which they believe there
is a demand.
• Acquisition – when a company purchases most or all of another
company’s shares to gain control that company and make decisions
about the newly acquired assets without approval of the company’s
shareholders.
• Initial Public Offering (IPO) – the process of offering shares of a private
corporation to the public in a new stock issuance, allowing a company to
raise capital from public investors.
57. Glossary
• Total Addressable Market (TAM) – a term that is typically used to
reference the revenue opportunity available for a product or
service. TAM helps to prioritize business opportunities by serving as
a quick metric of the underlying potential of a given opportunity
• Revenue Model – a framework for generating revenues. It
identifies which revenue source to pursue, what value to offer, how
to price the value, and who pays for the value. It is a key component
of a company’s business model. It primarily identifies what product
or service will be created in order to generate revenues and the
ways in which the productor service will be sold
58. Glossary
• Turnover – the net sales generated by a business, while profit is the
residual earnings of a business after all expenses have been charged
against net sales. Thus, turnover and profit are essentially the beginning
and ending points of the income statement – the top-line revenues and
the bottom-line results
• Profit margin – the amount by which revenue from sales exceeds costs
in a business
• Cost of operation – the expenses which are related to the operation of
a business, or to the operation of a device, component, piece of
equipment or facility. They are the cost of resources used by an
organization just to maintain its existence
59. Disclaimer
For further information, relatedto the VET4SBO project, please visit the project’swebsite at https://smart-building-
operator.euor visit us at https://www.facebook.com/Vet4sbo.
Downloadour mobile app at https://play.google.com/store/apps/details?id=com.vet4sbo.mobile.
This project (2018-1-RS01-KA202-000411) has been funded with support from the European Commission (Erasmus+
Programme). Thispublicationreflects the views only of the author, and the Commission cannot be held responsible
for any use which may be made of the informationcontainedtherein.