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The global marketplace for smart buildings is exploding. Valued at around $5.8 million in 2016, the market is expected to reach approximately $61.9 million within five years. Not surprisingly, the Internet of Things (IoT) market is growing at an equally impressive rate. By 2025, it’s forecasted to increase eightfold.
What’s driving this expansion? Here are five trends fueling the growth of smart buildings and IoT technologies.
The cost of IoT sensors has been steadily decreasing since 2004. In fact, between 2004 and 2014, the average cost of IoT sensors dropped by more than half, from $1.30 to $0.60. As the marketplace gets more and more crowded, IoT software and hardware providers are under pressure to find ways to lower costs if they don’t want to be pushed out.
In addition, enterprises have been steadily ditching their legacy on-premise solutions in favor of SaaS and cloud-based platforms as they are less costly and easier to maintain. These solutions are also more agile, which allows facilities managers to pursue building optimization initiatives that weren’t possible before.
Finally, an increasing number of technology providers are granting access to their software via application programming interfaces (APIs), creating opportunities for plug-and-play software customization that is less expensive and more scalable than constructing applications and integrations from scratch.
It may not be very surprising to hear that 81 percent of adults in the U.S. own a smartphone. But to add some context, just eight years ago barely one in three adults was a smartphone owner.
Along with mobile devices, the use of wearable technology continues to expand, with an estimated 37 percent of Millennials reporting they use some kind of wearable device like a Fitbit or Apple Watch. Additionally, IDC forecasts shipments of wearable devices to grow by more than 50 percent by 2022.
With mobile technology and wearable devices, FMs and corporate real estate (CRE) leaders have more comprehensive insight into how employees engage with the workplace. And because mobile and wearable technology developers continue to add more features and offer products at lower costs, it’s easier for FMs and CRE leaders to get the buy-in they need to invest.
IoT sensors aren’t just less expensive; they’re also more reliable, more energy efficient and smaller. Additionally, they can collect data over larger areas and transmit this data further distances. This means FMs don’t have to worry about increased energy costs or disruptions to the workforce.
Additionally, 5G networks have already begun operating in conjunction with 4G and LTE mobile networks. Over the next five years, they will become standalone data communication networks. Devices on 5G are predicted to have a typical response time of as low as one millisecond. This is 1/30 the speed of 4G devices. In other words, data will be literally transmitted instantly.
And thanks to improved network security protocols, it will be delivered safely without interference from unauthorized parties.
In support of a universal improvement in analytics capabilities, data is undergoing two major developments:
These developments are making data more accessible and available—in terms of both a company’s ability to retrieve the data as well as its ability to parse and analyze it.
Additionally, advanced technology is making it possible to understand unstructured data from photos, maps, videos and paper documents. This is particularly impactful because there is much more data in these types of media than in a structured data record.
The ability to analyze this information means FMs and CRE leaders have considerably more accurate data points to guide their decisions. Plus, complex algorithms enable real-time data analysis, which, in turn, enables real-time decision-making.
Automation powers smart buildings. And technologies like artificial intelligence (AI) and IoT sensors power automation. More specifically, machine learning allows software to more accurately predict outcomes using data gathered from various sources, including IoT sensors.
This kind of AI enables software to “learn” how to perform certain functions independently. For example, by analyzing occupancy data collected by IoT sensors, the system can identify traffic patterns and adjust the heating and lighting schedule to be as efficient as possible without affecting employee comfort.
And because software and hardware providers know their products must integrate with other solutions and devices, it’s becoming easier to transmit data directly from one platform to another.
The growth of smart buildings and IoT technology won’t be slowing down anytime soon. It’s crucial for all FMs and CRE leaders to understand the current state of smart buildings and IoT in order to be fully prepared for future developments.
First, they will need to change the way they think about their space and see it as a strategic asset, rather than a cost to be managed and minimized.
Next, they’ll need to develop a workplace strategy that makes the most of that space while fostering an environment that enhances collaboration and productivity.
And they’ll need to make sure they have the right workplace technology to support that environment.
These are just the first steps to building an intelligent workplace. To learn more about what that means and how to get started, download our newest whitepaper, In Search of Intelligent Space: What’s Driving The Need For Workplace Intelligence?
A member of the Business Development team, Glenn has years of experience with business process improvement on the Commercial Real Estate and Facilities Management sides.