What's driving the building automation market forward?

What's driving the building automation market forward?
Energy management, government initiatives and IoT deployments are three major drivers boosting market growth.

A report from ABI Research forecasts that global smart building facility services revenue will grow from US$625 million in 2015 to more than $8 billion in 2021. The report cited that large buildings primarily in North America and Western Europe implement cloud-based smart building platforms or integrate existing building management systems to smart building platforms.

According to a recent report from Technavio, commercial buildings were the largest adopters of building automation and control systems in 2016, and are expected to hold onto their lead through 2021. The APAC region — where new construction is ongoing and smart city projects are being pushed in countries like Japan, South Korea, Singapore, India and China — is expected to be a key revenue contributor to this market segment.

Konkana Khaund, Director of Consulting at Frost & Sullivan, said, “We’ve seen tremendous growth in Asia in the last two to three years from the perspective of demand for BAS in new buildings. End users in regions like Africa, the Middle East and Latin America are somewhat slow to adopt the latest innovative solutions; however, these regions present good future growth opportunities.” She added the most advanced technologies first get deployed in Europe and North America and takes a while before the technology actually hits the Asian market. Although, the emergence of state-ofthe- art buildings in these destinations are offering vendors ways to implement their advanced solutions on a pilot basis.
Rick Focke,
Senior Product Manager,
Building Technologies & Solutions, 
Johnson Controls


Willy Wu, Business Development Manager at Advantech, sees demand from existing buildings in Europe and the U.S. for energy-saving solutions as well. In east and southeast Asia, there are new construction projects in industrial parks and residential districts that may drive growth in the building automation systems (BAS) market. He added that the trend is to install BAS as the buildings are getting bigger and require a central control system.

When it comes to BA, energy management as well as security and safety are major concerns for building owners. Wu, whose BA applications are primarily applied in commercial, medical and factory buildings, said, “80 percent of our customers are asking for security and energy management solutions.”

Khaund indicated that government initiatives are mostly around energy efficiency improvements and carbon neutrality. “For instance, in the U.S., all buildings by 2030 will be required to achieve zero net energy status. There are similar government mandates in Canada. These requirements are definitely driving better adoption of automation, controls and sensors in a bid to save energy and reduce operating costs.” The building operators need to justify capital budgets for investment in smart technologies. “The energy savings can help them prove the business case.”

Industry Consolidation Continues

By means of M&A activities, companies can strengthen their capabilities and differentiate themselves from competitors. Khaund said that the BA industry was traditionally a very homogeneous industry with hardly any differentiated offerings. Consolidation efforts of large companies to create more robust product and solution portfolios have resulted in several notable acquisitions and strategic partnerships, particularly in the area of adding capabilities like visualization, data analytics and service-based offerings.

“IoT has opened up new business opportunities for traditional players who can now create innovative services wrapped around their traditional hardware and software portfolios, as well differentiated value-added services. Acquisitions and partnerships will continue to be a strong characteristic of this industry, allowing companies to create unique and differentiated solutions,” Khaund said.
Konkana Khaund,
Director of Consulting,
Frost & Sullivan


Security and video surveillance are becoming critical elements in the BA sector. To strengthen its building automation offerings, Delta Electronics has announced an offer to acquire a 55-percent stake in VIVOTEK, which specializes in video surveillance solutions and IoT-based smart imaging analytics. Robert Luor, GM of the Building Automation Solutions Business Unit at Delta Electronics, indicated that IP cameras can be considered the “eyes” of a building as well as extended sensors for other building systems. “We need to enhance the interoperability among traditionally independently operated systems such as HVAC, lighting, access control and security, so that systems can work smarter. The line between all of the systems mentioned above is blurring more and more,” said Luor.

Johnson Controls has seen more customers wanting to combine security and energy saving functions, and realize the benefits of tight integration. Rick Focke, Senior Product Manager for Building Technologies & Solutions at Johnson Controls, indicated that the Johnson Controls-Tyco merger enables deep,beneficial integration between Tyco’s security systems and Johnson Controls’ BA systems. “Using BACnet as a baseline, the market should expect to see advanced, unified offerings as the two engineering departments work more closely together,” said Focke.

These recent M&As are pointing toward security and safety as major key drivers in the building automation industry in the years to come.  As more and more companies are working more closely together, new and better products and solutions will continue to propel the industry forward.
Share to:
Comments ( 0 )