Worldwide spending on smart building managed services – outsourced operations that include data acquisition and analytics, as well as building maintenance contracts – will increase from $291 million in 2012 to $1.1 billion by 2020, according to a report just released by Boulder, Colorado-based Pike Research (News - Alert).
As part of an effort to reduce energy use and operating expenses during the global recession, many commercial building owners and managers have already installed building energy management systems (BEMS). While these new systems can provide significant efficiency gains, they may be too sophisticated to be operated by a building’s maintenance staff.
Consequently, smart building managed services are growing in demand and popularity.
“As the need for sophisticated building energy management systems grows worldwide, so will the need for simpler, turnkey solutions that unlock energy efficiency,” said Pike Senior Research Analyst Eric Bloom. “Smart building managed services allow building owners to outsource their energy management needs to experts who continuously monitor their facilities, searching for opportunities to reduce energy costs and improve operations.”
SBMS providers offer high levels of expertise in the operation of installed systems and software, as well as a deep understanding of how buildings function. Using service models that feature regular interaction with building personnel, SBMS vendors become an extension of a building’s operating staff. By gaining an intimate knowledge of clients’ buildings – and with the ability to process and understand the huge volumes of data that are available from those buildings – an SBMS vendor can offer capabilities that building owners or operators could not develop independently without significant time and resources.
The result is greater reliability and efficiency, as well as better return on investment (ROI).
In many respects, the market drivers for SBMS are similar to the market drivers for BEMS. Both provide cost-savings through reduced energy consumption, but smart building managed services anticipate and schedule preventative maintenance activities that can provide additional cost savings.
Through skilled observation of a building’s systems, 24/7, SBMS vendors can identify and resolve operational issues before they become more serious, costly or disruptive. These advantages ultimately translate into reduced operating risk for a building owner.
SBMS vendors do, however, face market hurdles and challenges – including the growth and proliferation of utility demand-side management (DSM (News - Alert)) programs. Utilities seek ways to engage with their customers and, more importantly, manage the increasing demand for electricity production. The growth of utility DSM programs has created the expectation that many of the services provided by SBMS vendors already are available from local utilities.
For those vendors who do not currently have working relationships with utilities, this represents a market obstacle and a business risk. Vendors that have existing relationships with utilities can take advantage of these relationships as a significant market channel, since utilities rarely have the internal capabilities to build and manage a comprehensive service offering on their own.
Indeed, very few players in the current smart building managed services market could be considered purely managed service providers. According to the report, some of the strongest competitors are the large building systems equipment manufacturers, including Milwaukee-based Johnson Controls, Munich-based Siemens, and Paris-based Schneider Electric, which provide a wide variety of products and services in many different areas.
Two more-targeted companies, Spokane-based Ecova and Dubai-based Pacific Controls, have developed significant technology offerings with a targeted, service-oriented approach. Ecova serves both utility and commercial customers, giving it deep knowledge in the space. Pacific Controls has global reach, several network operations centers (NOC (News - Alert)) already operational, and a platform that is being used by Jones Lang LaSalle, one of the largest facilities management firms in the world.
Several small, early-stage companies, including Norwalk, Connecticut-based AIMNET and Atlanta-based Lean-Green, have also entered the SBMS market and gained regional acceptance. These companies have developed the necessary technology and infrastructure to penetrate the SBMS market and are making inroads.
Large and more traditional IT companies see the SBMS market as an opportunity to market their core expertise. Most notably, Armonk, New York-based IBM (News - Alert) has created a compelling offering and argument for utilizing its systems integration expertise, technology, and tools in a smart building.
With the ever-increasing amount of data that can be gleaned from BEMS, building management systems (BMS), and smart meter applications, for an IT company to offer comprehensive solutions in the BEMS segment is a natural fit.
Given the number of diverse systems that must interact to understand and optimize a building’s energy use, a concerted systems integration effort is necessary for providing an optimal solution at the enterprise level.
BEMS vendors who have recognized the increasing market demand for a more service-oriented approach are slowly building their capabilities to offer services. These companies will experience growing pains, but the capabilities of their original software tools do provide them with a foundation for making this transition over time.
The report, “Smart Building Managed Services,” examines the technology issues in the smart building managed services market and includes profiles of 18 vendors. Market forecasts include total market growth from 2012 through 2020, market share and growth rate comparisons, and projections for five world regions.
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Edited by Braden Becker