We invite you to spend your weekend contemplating the dollars (and euros and yen) likely to be plunged into the global smart building technology market between now and 2018.
An IDC Energy Insights report released today forecasts that spending will balloon from $7.3 billion in 2014 to $21.9 billion in 2018. That's a compound annual growth rate of 28.4%. The research firm says the convergence of "information technology and building automation" is creating substantial value for building owners looking to optimize usage and maintenance of their properties.
Here are some of the key findings of the report:
Different countries face very different drivers towards the expansion of smart buildings, including owners and managers seeking to reduce and control energy costs (U.S.) to governments driving environmental and energy efficiency objectives (Germany) to meeting energy supply challenges (Japan).
This global smart building technology spending forecast projects the market to grow from $6.3 billion in 2013 to $21.9 billion in 2017. Adoption rates are expected to vary by region, with the most aggressive adoption in North America, Western Europe and Asia/Pacific over the next five years.
Prior to 2013, the global smart building market grew more slowly than expected due to externalities such as less expensive electricity in several markets and a slow economic recovery leading to deferred capital investments. In 2014 and over the next several years, adoption is expected to recover as the economic recovery takes hold and as energy costs remain a large and variable component of building operation.
Despite the aggressive growth forecast for the smart buildings market, adoption still represents a small share of the total addressable market. The continued development of case studies and best practices by early adopters will promote awareness and support longer-term expectations for market expansion.
With many basic control and monitoring systems in place, a need is developing for intelligent software and external services to help analyze, interpret, and prioritize the data that is being collected.
I think we knew smart building technology represented a big opportunity, both for vendors of the technology and for building owners. But this big, this fast? If you're surprised (or find it all entirely predictable), please tell us why on the message boards.
— Kim Davis , Editor-in-Chief, UBM Future Cities