Have you been blackmailed by your Dishwasher? Who Owns the Smart Future?

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

Having recently updated BSRIA’s key market studies on Building Automation Controls (BACS), Building Energy Management (BEMS) and Smart Evolution – towards the Internet of Everything, I was struck by a world in a state of flux with  implications for the built environment and technology in general that could be as profound as they are unpredictable.

The structure and make up of our buildings and cities have always been intensely political. The most visible of all human creations, they speak volumes about our abilities, our status and our values and our aspirations. I felt this last month  when viewing the ruins of Ephesus – once the second city of the Roman Empire –  as much as when  I am visiting London or Chicago.

At least since the turn of the millennium there has been a tacit assumption that while technology is the great enabler, much of the change in the way our buildings and cities are designed and organised will be driven by social concerns, typically expressed through politics. In particular, the perception that the threat of climate change requires far reaching action has led to a sustained series of targets, guidelines and regulations to increase both energy efficiency and the use of renewable energy, which naturally impacts on the built environment as one of the biggest consumers of energy.

Is this movement losing momentum? The financial crisis and recession affecting much of Europe, North America and some other parts of the developing world has proved to be the most prolonged since the 1930s. Even countries which appeared to escape the worst impact have since experienced either recession or a dramatic slowdown, including Australia, Canada and of course China.

With falling or stagnating production and rising government debt levels in so many countries, it is no surprise that finances and basic economics have come to the fore. Violent conflicts, especially in the Middle East, Africa  and Eastern Europe, but overflowing into other parts of the world, and in turn fuelling mass movements of refugees and economic migration are also seizing attention in developed countries as well.

All of this has sometimes appeared to leave the “green agenda” somewhat on the back foot. Even in countries like Germany, Austria, Australia and New Zealand, where Green parties have attracted mass support and had a major influence on government, they have seemed to become more marginalised. Britain’s recent elections resulted in a new majority government which has very quickly moved to relax requirements on the energy efficiency of new buildings, and also to phase out subsidies for wind power.

While there is argument as to how far this is simply a question of means, and how much it represents a shift in priorities, there is little doubt that measures to improve energy efficiency or to promote use of smart technology face an uphill path if they cannot also provide a quick pay-back.

Where governments get involved in technology, it tends to be for old fashioned economic reasons.  When  mega-corporations  like Microsoft, Apple, Google and Amazon have been in the spotlight it has mainly been because of accusations of anti-competitive practices or because of their tax policies. Rather less thought has been given to the ways in which companies like these could change the basic structure of society, the balance of power, and the whole environment.

Increasingly these global brands interact directly with a global audience, influencing their behaviour, and in turn being influenced by them. It is no accident that Microsoft, Apple, Google and Amazon, having established themselves as consumer brands, are now all active in the area of smart buildings, ranging from the smart home to, in Microsoft’s case, providing the data crunching to manage and optimise whole campuses of buildings.

Increasingly we can link these to wearable devices and to creators of virtual realities which could radically change our day to day activities and environment. Even the basic blocks  from which buildings are made can have ‘smart’ properties, from ‘self-healing’ bricks to glass that responds dynamically to different levels of light.

threatsWith artificial intelligence already surpassing human intelligence in certain well defined areas – such as chess playing – questions are raised about how far the technology goes, who owns it, and how much power they will have. Even our homes and offices can study, learn and predict our habits and our preferences, in ways that can certainly be useful, but also potentially disturbing.

For over a hundred years there have been fears about the prospect of vital areas of technology  being dominated by a single concern or perhaps a cabal of companies. So far, in practice, it has been innovation itself  that has come to the rescue. Even the most nimble footed technology giants have been caught off-guard by new waves of technology, from IBM, to Microsoft to Nokia. In the case of building technologies the requirements are particularly diverse, and  it is quite unusual to find a country where a single supplier accounts for more than 25%-30% of the market.

Nonetheless as we look to a future where corporations and, by implication, governments have access to information about almost every aspect of where we are, what we are doing, how we feel and what we want and fear.

While you can probably rest assured that your dishwasher probably doesn’t have a motivation to blackmail you (why were those extra glasses washed out at 3 o’clock last Thursday morning?) you can be less assured that it won’t soon have the evidence to do so.

More information about the latest editions of BSRIA’s market studies on Building Automation, Building Energy Management, and Smart Evolution is available here.

Building Controls: Throwing a BRIC in the Works

Henry BlogThe BRIC countries; Brazil, Russia, India and China feature prominently in the news on an almost daily basis, for all sorts of reasons. While there have been concerns over a slowdown in growth, China, India and Brazil have all continued to grow through the recession at substantially faster rates than most of the developed world, and whilst the somewhat reduced growth rates may cause alarm in China and India, they would be cause for wild celebration in, say, much of Europe.

China, Brazil, Russia  and India all now rank in the World’s top 10 economies, and China is already second only to the USA, and is poised  to overtake it sometime in the next few years.

This economic development has naturally been associated with a lot of building development, including demand for such systems as HVAC and Building Automation. Nonetheless, in the BRICS countries the Building Controls markets have tended to lag behind their economic development.

Hence, according to BSRIA research, China’s Building Automating market was the world’s 5th largest in 2012, while Russia ranked 11th, India 16th and Brazil 18th.

What is more, the same research shows that the Chinese, Indian and Brazilian markets were dominated by the “Big 4” global suppliers: Siemens, Johnson Controls, Honeywell and Schneider Electric, even though the individual company shares varied reflecting local market conditions.

One thing that the history of the past 150 years has taught us is that as technologies mature and economies develop, industries tend to migrate to areas which offer the combination of lower costs and growing markets which China, India and Brazil are all in a position to do. This has been seen with the massive movement of manufacturing industry to China and of IT related industries and services to India. This in turn has created some new locally owned corporations with major industrial and financial clout, in a position to compete and invest on a global basis.

The latest update to BSRIA’s global study Challenges and Opportunities in the BACS Market , looks at a number of key trends, including the potential for new challengers to emerge in China, India and Brazil.

Unsurprisingly, the process appears to be most advanced in China. Spurred on by the wave of new construction, suppliers such as Techcon, SUPCON, Beston and RUNPAQ have started to make a real impact covering most of the main vertical markets, and including some high profile projects.

In India, where the overall market is significantly smaller, only Larsen and Toubrou, a major Indian-owned global corporation, stands out. There are however a host of Indian companies providing implementation and integration services.

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

In Brazil a major domestic supplier has yet to emerge, though as in India there are a range of local companies offering related services.

In Russia, local Champions such as Regin and Polar Bear have gained a significant national market share, but have yet to have much impact elsewhere.

Past experience in other industries suggest that these countries may well provide favourable conditions for local champions to emerge and that, as their national BACS markets grow and mature, so this could even provide a springboard to offer products and services on a regional or even a global basis. This is definitely an area that everyone with an interest in Building automation, be it as a supplier, customer or service provider, should continue to watch going forward.

Other subjects that we focus on in the latest update include Technical Infrastructure Support Providers, developments in cybersecurity for buildings, and new alliances and mergers.

To find out more about Challenges and Opportunities in the BACS Market please contact Steve Turner – Steve.Turner@bsria.co.uk

Who Will Rule the Smart New World?

While Analysts’ predictions of the next big developments in Technology have become as much a January tradition as are hangovers and the task of hoovering pine needles from the carpet, it is often even more illuminating to look at what is actually happening, but which may be “hidden in plain view”.

Henry latest

While BSRIA has been reporting on and working with developments in building technology for decades, two recent trends have become clear:

  • The pace of development is accelerating, as buildings move increasingly into the IT mainstream, with elements such as software becoming as important as the more ‘traditional’ electronic and mechanical aspects.
  • Other areas of smart technology are not only developing apace, but are converging, in ways that are both predictable and perhaps more surprising.

Already smart technology is ubiquitous and affordable enough to influence every area of life from home and leisure to commercial premises to infrastructure and the most basic processes used to run cities and the governments of whole countries.

Whether it is using a smart phone to adjust your home heating or to pay your local taxes, or a smart meter to indicate the cheapest time to run a load through a smart washing machine, or smart glass that lightens or darkens in response to ‘instructions’ from a building, or smart cars communicating with traffic signals, we are seeing technologies that we have always thought of as independent interact, as the Internet of Things steadily expands to becomes the Internet of Everything.

This interaction is not only convenient; it also means that the same goals can be pursued simultaneously using different smart systems. To take one example, if we want to reduce greenhouse gases, we can use smarter and more energy efficient devices and appliances, we can manage the energy consumption of our home or office through building controls (or even by using smarter building materials), or wider society can invest in smarter grids and smarter sources of energy production. The balance of the mix that brings the best result can change depending on the situation, so they need to be interconnected.

All of this opens up huge potential opportunities for companies to emerge as leaders in the smart new world. Some of the leading automation companies are already well established here. But other sometimes surprising challengers are emerging. As information and analysis becomes more central to the smart world, including the smart built world, so software and IT services companies are seeing and seizing opportunities, and other companies are also branching out.

While the “smart homes” market may initially have been slower to take off than some expected, it is telling that Honda entered the market in 2013, and Google followed, with its acquisition of  Nest Laboratories in January 2014.

Of course growth by acquisition is not in itself enough. The much more challenging task is integrating diverse offerings into a single seamless and coordinated whole. Here the advantage will go to those companies who can develop solutions that naturally fit together, and who also understand how to develop and market them in a coordinated and holistic way.

Equally, the smart new world will rest not just on technological ingenuity and innovation. Equally important will be the understanding of the world of organisations – from private companies to governments, and on the behaviour of individuals. Each of these will interact and influence the other, often in unintended and unpredictable ways. The larger the scale of the system, the more complex and unpredictable it becomes. (It is telling that it is huge projects which interact both with governments and with a myriad of individuals that are especially liable to go wrong, as witness the debacle over the roll-out of the computerised elements of the new American Health Care system – ‘Obamacare’).

The companies that do best in this environment will need to offer the soft skills, including the social, the psychological and the political, in order to prevail.

BSRIA has just published a major new Market Study Smart Evolution 2014: Convergence of Smart Technologies: Towards The Internet of Everything which considers these questions and much more, and identifies the companies who are currently best placed, and those who are set to emerge as challengers.

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

It is a new world that sometimes appears as through a looking glass. As Lewis Carroll didn’t quite write:

The time has come to talk about the Internet of Things

Of BEMS and BACS and web attacks

On automated Buildings

And power from bricks and glass that thinks

And should smart cars have wings?…

To find out more about the study  Smart Evolution 2014: Convergence of Smart Technologies: Towards The Internet of Everything   or to order it , please contact:
Steve Turner Steve.turner@bsria.co.uk
T +44 (0)1344 465610

The Smart Response to Managing Buildings’ Energy Problems

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

Issues around energy continue to dominate many of the news headlines in the UK, and are seldom far from the forefront in other developed countries. While much of the focus has been on rising domestic energy price- tariffs, the way that buildings use, and all too often waste, energy remains a huge concern. This is hardly surprising given that in both Europe and North America, buildings account for a whopping 40% of all energy consumed.

One thorny problem is the high cost of improving building energy performance, especially in a country like the UK where the building stock, especially  the residential building stock, tends to date back to an era when the principles of energy conservation were much less well understood, let alone acted on, and where the cost of improvements and renovation can be high, and the ROI correspondingly long – a daunting prospect when governments, companies and consumers are all still hurting from the financial hangover following the worst recession in decades.

All of this means that institutions, companies and households need to look at smarter ways of coping with high-cost energy in buildings that are often not ‘designed’ to be energy- efficient.  Here at BSRIA we have just completed a regular update of our report into Building Energy Management in Europe and North America, which has given us the chance to review some of the key current developments. As part of this, we looked at 17 of the leading suppliers to this market.

One immediately striking conclusion is that all of the leaders incorporate a level of analytics, in some cases as part of a wider portfolio, in others as their central specialised offering.  In one sense this is not surprising. If you want to improve a building’s performance then you can either take a direct physical approach– for example more energy-efficient construction or insulation, or cheaper or more environmentally friendly energy sources – or you can take steps to change the way the building uses that energy, which means interacting with its occupants and their requirements in an intelligent way, which in turn requires that you have all relevant information to hand. We can expect these analytics to become increasingly sophisticated, with buildings “learning” based on usage and performance over time.

This also helps to explain another striking finding:  that most of the suppliers in this sector now offer some level of on-going commissioning. Improving building energy performance is a continuous undertaking – reflecting the fact that buildings’ usage patterns and the behaviour of their occupants will themselves change over time, as processes and equipment become more, or less, efficient. In providing or supporting an on-going service, companies become less like suppliers in the “traditional” sense, and more like partners, providing consultancy as well as software or hardware. In some cases the service supports the actual procurement of energy and management of energy suppliers.

Another capability which is fast becoming a “must have” is the ability to offer a Software as a Service (SaaS) model, with all of the advantages in terms of cost model, maintenance, accessibility and flexibility.

wmi-thermostatAs buildings become increasingly integrated into the wider “smart world”, Demand Response, already well-established in parts of the USA is being taken up more seriously in Europe as well, with an increasing number of BEMS suppliers supporting  the move to automated demand response.

While the problems faced by large commercial buildings clearly differ in important ways from the light commercial sector and from residential buildings, there are likely here as elsewhere, to be important elements of crossover. Some suppliers are also providing differently scaled BEMS solutions and energy management is already one of the central elements of most “smart home” solutions.

Barring a sudden surge in cheap, readily available and environmentally friendly energy, which still sounds like a dream scenario, we can expect BEMS to continue its rapid advance in importance, increasingly integrated into related areas of Building Automation, and of Smart Grids.

To find out more about BSRIA’s updated study “BEMS Market 2013 Q4 : Developments in Europe and the USA”, please contact Steve Turner on +44 (0)1344 465610 (Steve.Turner@bsria.co.uk)

If Buildings Could Talk to us…

It was really only a matter of time:

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

Buildings are where we typically spend the greater part of our time, both at work, and often as not outside of it.  They already consume about 40% of the energy used in most advanced countries. They represent a huge proportion of our investment, both as individuals and as a society.  For centuries the technology of the day has been deployed to make them more efficient, comfortable and healthier for their occupants.

The surprise is surely that it has taken so long for information technology to really  move centre stage in our buildings. While smart homes remain, at least in most countries, a slightly geekish luxury item, many of us already spend our working day in environments managed by quite advanced  building automation systems, which aim to maintain a safe, secure and comfortable environment.

As building systems become more sophisticated, the more critical it becomes to be able to collect information about the state of the various components, and how they are interacting.  Accordingly, leading building automation and controls (BACS) suppliers, including Honeywell, Johnson Controls, Schneider Electric and Siemens have increasingly been making software available in order to process and make sense of this information.

In this they have been joined both by some of the big enterprise software players, but also by a host of  comparative newcomers. A key factor here is that the amount of data and the complexity involved can be quite large. It is easy to see that if you are in the position of managing a large portfolio of buildings, perhaps as a facilities management company, then if these buildings are automated then you may have to analyse a large volume of data to ensure that your estate is performing efficiently in terms of energy usage, costs, maintenance schedules, etc.

What is less obvious is that even for a comparatively modest sized building, the data can be potentially quite complex.  To get top performance from a building you need to look beyond the obvious. This means not just taking account of data from individual sensors or other information generators, but how these each  interact with one another. For example, one surprisingly common scenario is where the temperature in a given zone is fine, but only as the result of a heating system and a cooling system battling each other to standstill, wasting alarming amounts of energy – and money – in the process.

To identify these types of scenarios the system needs to be able to check very many different measurements against other ones and

The BACS Market

The BACS Market

identify relationships and correlations. And once the “normal” patterns and correlations have been identified it can then look for anomalies, which may be a warning sign that something has gone wrong, or at the very least that something abnormal has happened. Why for example, might a temperature be spiking in one part of a building at an unexpected time?

It is these kinds of challenges, as much as sheer volume that we are talking about when we refer to “big data”. Not only is this far beyond the capacity of the best human brain to process in any acceptable timeframe, it requires advanced analytical software to identify and prioritise the most important events, almost literally to “understand what your building is trying to say to you”.

A whole range of suppliers are now active in this space, and some of them at least are likely to have a huge impact on how building automation develops going forward.

Here at BSRIA, in the latest regular update to our Hot Topic study on Threats to BACS Hot Topic for October 2013,  we focus on this area, as well as taking a look at the implications of another, less fortunate, consequence of the growing importance of IT and software in the built environment: the spectre of cyber-attacks on buildings.

Threats to the Building Automation and Control Systems Market – or Opportunities?

My smart technologies team within BSRIA’s Worldwide Market Intelligence division have been looking at the threats to the traditional building automation and control systems market. But of course, what is a threat to one is an opportunity to another and we are looking at both angles of the changes currently taking place. We will shortly be publishing our findings and conclusions in a new report to be launched later this month.

The global BACS market is currently worth more than $20 billion and is continuing to grow year on year, having pulled through a global recession quite robustly. Not surprisingly, this market has in recent years been attracting new entrants. Now, new technologies, innovations and novel business models are threatening to disrupt the traditional business.

New technologies that utilise the “Cloud”, developed by relative newcomers such as BuildingIQ and Mios, as well as established multinationals like Johnson Controls and Schneider Electric are providing energy management, self-diagnosis and adjustment functionality not previously available in a Building Automation and Control System (BACS). Suppliers are now faced with the reality “If I am not in the cloud, my competitors probably will be.” There is a growing assumption that all key services and solutions should be accessible via “the cloud” but there are concerns and these are explored in our report.

As building automation becomes more IT-based, software is growing in importance, within both targeted applications and in detailed analytics to identify areas where performance may be improved. BACS suppliers need to be proactive in this area or risk becoming more commoditised and marginalised.

Suppliers of variable refrigerant flow (VRF) and DX systems are also entering the BACS market with integrated controls and rudimentary energy management functions. The market for VRF based systems has overtaken chillers globally and VRF systems are gaining market share fastest where the markets are expanding most rapidly. We have looked at how the BACS equipped VRF systems in the $9bn VRF market are affecting the HVAC and BACS markets. We analyse whether they pose a great enough threat to change the BACS market altogether or whether they are a factor that could help the BACS market. Since VRF-based systems are becoming ever more ‘intelligent’ this changes the scope for building automation. Incumbents must be asking themselves, “how long until they start offering the same sort of capabilities as high level BACS?”

Residential smart home systems from the low-voltage electrical equipment suppliers such as Jung, Busch-Jaeger and Berker are being used in light commercial buildings; interestingly 60% of such systems sold in Germany are used in the light commercial market and demand is increasing. So here too, it is smart residential controls that are posing a threat to traditional commercial building solutions.

However, is the residential value add market at risk of be snatched away from the current players by the telecoms operators and utilities, bundling remote monitoring and energy management as just further services in their offerings? And could this be the way things will go in the non-residential market too?

Threats to BACS – or Opportunities?

Threats to BACS – or Opportunities?

However, opportunities exist in numerous areas, including in integration and convergence of diverse systems. BACS and in particular, building energy managements systems and services (BEMS) penetration in to the existing building stock is still very low and the opportunities for refurbishment are simply staggering. Perhaps the good news is that for the most part, these new markets remain highly fragmented. We are witnessing heightened activity in the areas of partnerships, mergers and acquisitions. This is enabling companies to broaden their scope of offering and to leverage their core skills and follow the rapid evolution of the market.

Our new report analyses these changes and provides information on how the BACS market is coping with the changes and the wider opportunity to expand “beyond BACS”. Supported by facts, figures and enlivened by charts and illustrations, it will be presented in an accessible PowerPoint format of some 60-70 slides. It draws on BSRIA’s long standing expertise in built environment.

%d bloggers like this: