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INTEL-SPONSORED WHITE PAPER
Intelligent Buildings: Energy Savings and Beyond with Smart Controls
Casey Talon
Principal Research Analyst Published 1Q 2016
1. Introduction
Intelligent building technologies are transforming the facilities industry. The market development is
fragmented, however, because of a broad array of infrastructure in the existing commercial building stock
and diverging expectations and demands from customers. Despite this fragmented landscape, Navigant
Research asserts that an information technology (IT) framework differentiates intelligent building solutions
from traditional offerings. These tools translate data into actionable information and, in some cases,
automated improvements that optimize the operations of building systems.
The marketplace for intelligent building technologies continues to grow, and the resulting impacts on the
facilities industry may be perceived as either evolutionary or disruptive depending on one’s point of view.
Technology companies such as Intel and startups like Lucid are just two categories of market entrants
introducing alternative approaches and solutions for energy and operational management.
The Internet of Things (IoT) is a technology construct that has begun to permeate the facilities industry as
it has in other sectors that leverage IT for business improvements. IoT for intelligent buildings constitutes
an architecture for data generation, communications, analytics, and services that deliver cost savings,
operations and maintenance (O&M) improvements, and energy efficiency gains. IoT deepens the value of
intelligent building technologies by delivering unprecedented connectivity of devices for greater visibility
into building performance. As a result, the business case for investment is strengthened with broader use
cases that are expanding from energy efficiency to include operational efficiency, occupant engagement
and satisfaction, workplace health and safety, and economically viable sustainability.
IoT-enabled intelligent building systems are secure, scalable, and interoperable. For large, existing
buildings, the integration of hardware and software with traditional building automation and controls can
generate deeper cost savings and efficiency. Solution providers are also installing network-secure
platforms that scale to support these same opportunities for cost savings and efficiency in smaller
buildings that lack traditional controls and automation. In this white paper, Navigant Research presents an
overview of how IoT-enabled intelligent building solutions are generating wide-reaching business benefits.
1.1 Defining the Intelligent Building
The facilities industry has relied a wide range of solutions to manage energy and operations of systems
including heating, ventilation, and air conditioning (HVAC) and lighting. Homegrown spreadsheets and
databases and sophisticated building automation systems (BASs) represent two ends of the spectrum for
the legacy technologies that led the market until around 2010. At that point, new software-centric
solutions were introduced as cost-effective and widely applicable alternatives to BASs, beginning the idea
of intelligent buildings. Navigant Research defines an intelligent building as a facility that utilizes
interoperable, IT-based technologies to optimize facility performance by translating system data into
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Intelligent Buildings: Energy Savings and Beyond with Smart Controls
actionable information. Figure 1 illustrates the general development of the intelligent buildings
marketplace and the outlook for continued innovation.
Figure 1 Roadmap to Intelligent Building Technology
(Source: Navigant Research)
Energy efficiency was the predominant use case for these investments when the market first emerged
because the association between reduced utility bills and better operations is straightforward and
transparent. As the market continues to evolve, vendors are showcasing additional business benefits,
including customer/occupant satisfaction, capital planning, and substance in sustainability. For example,
intelligent building technologies and services can help customers meet the requirements of green labeling
certification while also providing ongoing insight into systems improvements for the measurement and
verification (M&V) of efficiency enhancements that improve the bottom line.
In the longer term, intelligent building technologies will optimize more than just mechanical systems,
extending into resource use such as water and waste. Navigant Research also expects that as intelligent
building systems become fully integrated and automated, there will be a greater opportunity to leverage
the facilities for complete dynamic grid integration, siting distributed energy resources, and as smart city
assets.
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Intelligent Buildings: Energy Savings and Beyond with Smart Controls
1.2 Differentiating Intelligent Building Technologies
In existing commercial buildings today, customers can benefit from both traditional and intelligent
solutions for optimization. The different technologies can be integrated and coordinated to deliver
maximum benefits; in some cases, their functionality can benefit different stakeholders in an organization.
Figure 2 helps frame the conversation around building technologies and the directive of different systems.
Figure 2 Commercial Building Solution Mix
(Source: Navigant Research)
IoT and building energy management systems (BEMSs) are the intelligent building segments listed in
Figure 2. They are the means for creating data-rich facilities and thus, actionable insights. The result is
automated improvements, more accurate guidance for manual changes, and better action plans for
service providers. New market entrants are competing for major market share in the BEMS and IoT
segments. For example, Intel’s IoT for buildings solution leverages innovation from the broader IoT
landscape and helps its partners—including Lucid—focus on helping organizations make data-driven
decisions to improve the performance of commercial buildings. Lucid’s BuildingOS, for example,
centralizes building data in a single platform to unify manual, legacy, and advanced IoT sensor data to
give building owners and operators a simpler way to visualize operations. These types of platforms allow
building owners to see day-to day how their building investments are performing and make more-
informed capital decisions during planning cycles.
2. Energy Savings and More
Society has become reliant on technology and data in nearly all aspects of life. The consumerization of
technology, as this trend is commonly referenced, results in new expectations and demands on
commercial buildings. Occupants expect seamless access to their personal devices from their arrival to
their desk and expect even more personalization in the experience they have in an office. Refined
settings for HVAC and lighting are possible with intelligent building solutions, but the opportunity goes
beyond individual categories of building systems. The follow sections highlight how the emergence of the
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Intelligent Buildings: Energy Savings and Beyond with Smart Controls
intelligent buildings marketplace reflects significant changes on both the supply and demand side of the
facilities industry and the value and performance of commercial buildings.
2.1 Key Market Dynamics
The intelligent buildings market is characterized by a more diverse set of suppliers and investment
influencers than in the traditional facilities maintenance and management market.
2.1.1 Supply-Side Changes
The market for intelligent buildings is fast growing and dynamic. A much broader set of industry players
are entering the market to seize different opportunities. Figure 3highlights categories of technology and
service providers helping to develop the intelligent building landscape.
Figure 3 New Competitive Landscape for Intelligent Buildings
(Source: Navigant Research)
This diverse competitive landscape represents real opportunity for innovative companies. Large,
incumbent players that have supported facilities can bring domain expertise to partnerships that leverage
cutting-edge technologies from new entrants. Traditional manufacturers can expand their position with
customers by introducing new intelligent building service offerings or platform approaches rather than
component sales models. The bottom line is that the intelligent buildings market is moved by devices,
equipment, software, and services, and new deployment models such as software as a service (SaaS)
can deepen customer engagement. Vendors have the opportunity to transform their market position from
a point solution provider to a trusted advisor for energy management and operational excellence. The
differences in company culture and technology perspective between these groups are not insignificant,
however. There are examples of acquisition failures and partnerships gone awry, but the market is still
young and the outlook positive as the demand for intelligent building solutions continues to grow.
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Intelligent Buildings: Energy Savings and Beyond with Smart Controls
2.1.2 Demand-Side Changes
Customer expectations are changing. The decisions around managing commercial facilities are no longer
influenced by just one stakeholder in an organization. Navigant Research suggests there are four main
stakeholder groups that have an increasing sphere of influence over investment decisions, and this
dynamic is expected to continue to evolve with the development of the intelligent buildings market. There
are market forces that align with each stakeholder group and that explain the increasing influence of
different groups, such as occupants or IT departments. Finally, customers are expecting expansive
business impacts from investment in intelligent building solutions, beyond just energy efficiency. Figure 4
illustrates these demand-side changes.
Figure 4 Influencers, Market Drivers, and Expectations
(Source: Navigant Research)
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Intelligent Buildings: Energy Savings and Beyond with Smart Controls
2.2 Key Market Challenges
The intelligent buildings market is still in the early adoption stage, and substantial hurdles to broader
adoption remain. These challenges can be generally presented in two categories: integration and change
management. Fundamentally, these obstacles still need to be overcome to help the market continue to
mature, as illustrated in Figure 5.
Figure 5 Key Market Barriers to Investment in Intelligent Building Solutions
(Source: Navigant Research)
The promise of optimization through the deployment of intelligent building technologies relies on the
seamless integration of data collection devices, controls, automation, and software. In existing buildings,
this kind of integration may require the redesign and reuse of existing infrastructure in addition to
investment in new technology. In order to make this transition, vendors must demonstrate specific
technological capabilities, and customers must institute change management. The major challenges
include the following:
Proprietary protocols and standards creating complexity for system integration
Acceptability of new deployment models such as SaaS to incorporate incremental improvements
in new applications
Demonstration of cyber security for integrated solutions over internal IT networks
Buy-in and utilization of new solutions by various business divisions within an organization
Scalability of technology deployments to balance solution capabilities and changing customer
expectations
These challenges reflect the relative newness of the market and the need for continued market education.
The diversity of solutions in the market can create confusion for customers navigating the different
options for improving energy and operational efficiency.
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Intelligent Buildings: Energy Savings and Beyond with Smart Controls
3. Market Outlook
As illustrated in the analysis presented in the preceding sections, there are several individual
technologies that enable the transformation of a commercial facility into an intelligent building. Navigant
Research assesses individual technology markets that fall under the umbrella of intelligent buildings.
Chart 1illustrates the outlook for three key technology segments: BEMS software and services, advanced
sensors, and electricity submeters. The global revenue for these three segments is expected to grow from
$4.7 billion in 2016 to $8.5 billion in 2020, a compound annual growth rate (CAGR) of 15.9%.
Chart 1 Key Intelligent Building Technologies Revenue by Segment, World Markets: 2016-2020
(Source: Navigant Research)
4. Conclusions and Recommendations
The facilities industry has a new outlook, as IoT permeates the market and translates building data into
actionable information. Navigant Research provides the following recommendations to intelligent building
solution providers to help accelerate the adoption of intelligent building solutions:
Help customers understand the multidimensional benefits of intelligent building solutions including
energy efficiency, occupant satisfaction, strategic O&M, and enhanced service offerings.
Communicate the benefits of better information, not just more data. Customers may be
overwhelmed by the idea investing in more devices to generate more data and must understand
how IoT and intelligent building solutions will make their jobs easier and improve their bottom
lines.
Demonstrate domain expertise. Customers have different pain points that reflect industry-specific
challenges. Intelligent building solutions deliver crosscutting benefits, but customers need to
understand how these solutions can mitigate their biggest pain points.
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2016 2017 2018 2019 2020
($ M
illio
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BEMS Software & Services
Advanced Sensors
Electricity Submeters
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Intelligent Buildings: Energy Savings and Beyond with Smart Controls
IoT-enabled intelligent buildings utilize devices, communications, software analytics, and services for
data-driven decision-making on system performance. The result is three-fold improvements in energy,
operations, and collaboration by using better data for actionable information. Navigant Research expects
that the market for intelligent buildings will continue to grow at a rapid pace as more customers realize the
energy and non-energy benefits of technology-enabled facility optimization.
©2016 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.
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Intelligent Buildings: Energy Savings and Beyond with Smart Controls
Published 1Q 2016
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