The first adopters of smart building technology were large buildings and industrial complexes, but the market is becoming broader.
A new analysis by Navigant Research shows that owners and occupants of small and medium-sized commercial buildings are increasingly taking an interest in Internet of Things (IoT) solutions for buildings.
With ever more compelling IoT products and services coming to market, and strong use cases for smaller buildings becoming more apparent, market traction is increasing, the report found.
Global revenue associated with IoT solutions for small and medium commercial buildings is predicted to increase from $533.8m (£411.6m) in 2018 to over $4.0bn (£3.08bn) by 2027, growing at a compound annual rate of 25.1%.
There are IoT applications for virtually every building system, with sensors, meters and other devices collecting, sending and receiving data on the facility’s equipment, energy consumption, occupancy and environmental conditions. As well as helping facilities managers to monitor performance, the technology can highlight potential issues and efficiency savings that would otherwise be hard to detect.
For example, an IoT-enabled lighting or HVAC system can produce double-digit energy savings for a tenant or building owner. The payback might not be immediate, but the savings add up over the course of a few months or a year.
Among the key factors driving the market are prices that continue to decrease for IoT hardware, and vendors that are willing to bundle solutions for use cases that provide benefits to the building owners and tenants, explained Neil Strother, principal research analyst at Navigant Research.
“At the same time, prices for data processing and analytics related to IoT solutions have dropped, creating further interest in this market segment,” Strother added.
Within Osborne Clarke’s Next-generation connectivity report, William Newton the Managing Director of WiredScore, the company behind a digital connectivity rating scheme for commercial office space, stated that “connectivity isn’t an area where companies can compromise“. WiredScore produce a rating based on its review of the range of internet service providers available to the tenants of a building as the importance of connectivity and IoT becomes more prevalent.
To find out more about how Next-generation connectivity and IoT are effecting sectors such as real estate download our latest report here.