Smart building market to grow to $21.9 billion in 2018

April 23, 2014 by John Hatcher
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Smart building market to grow to $21.9 billion in 2018

IDC Energy Insights has launched a new report, Global Smart Buildings Forecast 2013-2018. The new report presents the state of the market, drivers for technology adoption, and the business value generated by developing smart buildings. In addition, IDC Energy Insights' shares expectations for growth in investment across smart building technology segments and regions. Designed to help vendors better develop the value propositions and case studies to further advance the market, the forecast projects spending to grow from $7.3 billion in 2014 to $21.9 billion in 2018, representing a 28.4% compound annual growth rate (CAGR).

After several years of slower-than-expected growth, the smart buildings technology market is expected to grow rapidly as there is increasingly broad market awareness of the business values generated by deploying smart building solutions. Smart building technologies have matured to enable facility optimization through the convergence of information technology and building automation. Building owners and key decision makers are increasingly aware of the business value of these solutions; however, adoption of these technologies has been slow due to changes in business processes required for deployment and utilization. A number of recent case studies and demonstrations are helping educate the end-user market around the business case and benefits associated with developing smart buildings.

Key findings of the report include:

· 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.

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