Three levels of "smart"

The majority of commercial buildings currently lie at the beginning of the scale, with much of their installed equipment still not IoT enabled, and systems that remain largely incapable of effective digital communication and control.

For buildings to progress to level two in the model they require a much greater degree of integration between building systems, and this can be facilitated by the adoption of open-protocols to enable systems interoperability. By integrating data from typically siloed data sources, building owners and operators can develop applications that incorporate data from multiple systems or devices.

Attaining the third level of smart building maturity, according to Memoori, involves incorporating data from beyond the building itself to consider people, cities or even wider business objectives. By incorporating human inputs into an IoT system, building owners and operators can develop more holistic smart solutions. Level 3 solutions improve the overall attractiveness of the building due to its greater capacity to meet the demands of users – leading to increased lease value, higher occupancy rates, and higher sale values.

Market size

In terms of value, Memoori researchers suggest that the Building Internet of Things (BIoT) Market recovery through 2021 was healthy, growing by 21% to rise above the 2019 market total, at just over $47 billion. The analysts forecast that the market will continue to grow at a healthy 12% CAGR, rising from $47.07 billion in 2021 to a forecasted $92.88 billion by 2027.

The company's latest forecast sees the number of connected IoT devices installed in commercial smart buildings grow at a healthy at 11.1% CAGR for the forecast period, rising from an estimated 1.264 billion in 2021 to over 2.5 billion by 2027.

There is an increasing industry push towards improving the value of data generated by the BIoT through improved systems integration, as opposed to limited siloed systems. To achieve this within buildings, a layered horizontal systems architecture is increasingly being advocated for, which is technology agnostic, by using open standards, open protocols, and non-proprietary solutions.

The BIoT digital divide

The pandemic has gone on to validate the BIoT investments of more forward-thinking building owners and operators. Effectively demonstrating the value of many previously existing BIoT solutions to deliver more resilient and efficient business operations. For example, remotely accessing building system networks and devices to monitor and configure performance during the pandemic proved challenging for those without the pre-requisite systems already in place. In many cases, Memoori research team found that this led to energy being wasted on heating virtually empty buildings. Whilst office building occupancy dropped to near zero in some countries, energy use only fell by 10-15%.

The competitive landscape for BIoT remains incredibly complex and varied. The analysts are continuing to observe fragmentation in the market, which can act as a source of confusion and frustration for buyers, with many vendors of point solutions and platforms vying for attention. Leading platform solution providers are beginning to emerge, however, and the user base seems likely to coalesce around a more limited number of platform providers, with those unable to maintain a sustainable user base being forced to merge or withdraw from the market.