Driven in part by regulation but also by user preference, a new report released by Machina Research states that security is set to be the largest application group in intelligent buildings.
“The security market is an already well-established market which will significantly benefit from M2M connectivity as alarms, CCTVs and access control systems become increasingly connected. Over the forecast period, there will be a trend towards mobile connectivity as a back-up to fixed network connectivity in cases where the fixed line is compromised. There will also be a not-insignificant number of pure mobile solutions. Hence, this application group will present the largest opportunity for mobile network operators,” says Michele Mackenzie, Principal Analyst with Machina Research.
The Intelligent Buildings sector represents a significant opportunity for the M2M market according to Machina Research’s latest report on the M2M market, Machine-to-Machine (M2M) Communication in Intelligent Buildings 2011-2020.
The market will grow at a CAGR of 17% between 2011 and 2020, from USD52 billion in 2011 to USD214 billion in 2020. Security is by some margin the largest application group generating 60% of total revenue by 2020. The fastest growing application group in terms of revenue is the Building Automation group which grows at a CAGR of 50% over the forecast period to reach USD63 billion in 2020.
In terms of connections, Machina Research forecasts that the global market for M2M connectivity in the intelligent buildings sector will increase from 946 million connected devices in 2011 to over 4.9 billion in 2020, making the intelligent buildings sector the largest sector for M2M connectivity.
The market grows at a CAGR of 20% over the period. At the beginning of the forecast period, Network Infrastructure constitutes the lion’s share of the M2M connected devices, comprising 69% of all connections. By 2020, Building Automation has emerged as the largest application group, reaching in excess of 1.9 billion connected devices followed by Security which exceeds 1.7 billion.
Building Automation is the fastest growing application group in terms of device count, achieving a CAGR of 64% over the forecast period (2011 to 2020) and comprising the second largest application group in terms of revenue. Faced with rising energy costs, there is a huge incentive for commercial building owners and facility managers to increase efficiencies and reduce energy spend. Likewise, home owners are pursuing the same goals. In order to achieve these objectives, households, commercial and public sector building owners will increasingly deploy M2M-based solutions to achieve higher levels of monitoring, control and automation of core building systems such as heating, ventilation and air-conditioning (HVAC) and lighting systems.
“Some operators are already forging ahead. AT&T‘s Digital Life Services division has developed both energy management and security solutions for the home, Deutsche Telekom is promoting its smart home platform under the Qivicon brand name and has partnered in order to provide a comprehensive service and Telefonica has developed a portfolio of security services with which it targets the business and consumer markets”, added Mackenzie.
However, two inter-related issues need to be resolved before the intelligent buildings market will really take-off: business cases and standardisation. Efficiencies and cost savings need to be clear for commercial intelligent buildings solutions to be adopted.
With regard to home building automation, initial adoption of intelligent buildings solutions is likely to be fragmented and piecemeal, initially focussed on specific needs such as energy management. However, the adoption of such solutions will drive awareness also serve to stimulate standardisation and the emergence of standardised off-the-shelf products which will drive the market forward in the medium-term.
“Without doubt, the Intelligent Buildings sector will present a significant opportunity for all kinds of telco, both fixed and mobile” commented co-author Jim Morrish, “To really take-off, the market will need standards (either de-facto, or formally defined). But once the market has taken-off, significant opportunities for the management, mining and presentation of the information associated with an individual’s constellation of connected devices will emerge. Mobile operators will be particularly well placed for this kind of opportunity. Intelligent Buildings really are where the rubber hits the road for our connected future world”.
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