April 2015

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Smart Building Technology Spending Projected to Triple by 2018

Annual shipments of wireless sensor network devices are expected to increase by more than 600% within the next five years, with the top three markets in energy management, smart lighting, and safety/security.

Karina Wright,
Marcom Writer,
Reliable Controls

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Smart building technology provides facility operators and occupants the ability to maintain comfort at a low cost by effectively using data collected from a wide variety of sources. A report released by IDC Energy Insights, Global Smart Buildings Forecast 2013–2018, projects spending in the global smart building technology market to grow from $6.3 billion in 2013 to $21.9 billion in 2018, representing a 28.4% compound annual growth rate.

Smart building technology is closely linked to sustainability, for which there is increasingly broad market awareness, and is also linked to business values aimed to deploy energy and cost saving solutions.

Over the next several years, adoption rates of smart building technology are expected to vary by region, with the most aggressive adoption in North America, Western Europe, and Asia/Pacific. Each region is spurred by different drivers, as North America primarily seeks to reduce and control energy costs, while much of Western Europe is driven by government-directed environmental and energy efficiency objectives, and Japan is primarily concerned with meeting energy supply challenges.

Prior to 2013, the global market grew slowly due to external factors such as less expensive electricity in several markets and a slow recovery from the economic downturn leading to deferred capital investments. Adoption is expected to recover as the economy continues to improve and energy costs remain variable. Additional factors in the adoption of these technologies include changes in business processes required for deployment and utilization, technical evolutions related to data-driven, performance tracking software, and an industry-wide move towards more open protocols aimed to extend the life of building automation systems.

Building automation systems are continuously evolving as the industry embraces more integrated systems based on emerging technologies over proprietary products. The trend of moving forward towards more open systems is, in part, due to the BACnet® protocol.

BACnet provides the basis in which to grow the smart building industry through using proprietary products, as it allows interoperability between different manufacturers’ products and promotes the protection of the investment in building controls. In the past, building owners were forced to replace entire systems when only a simple expansion was required, and were often unable to obtain competitive quotes for new projects because they were locked into a manufacturer’s proprietary system. BACnet resolved these issues by defining a basic set of rules for how and what building controllers could communicate.


An open standard protocol (ASHRAE Standard 135), BACnet was built with a guarantee against obsolescence, as it can easily be extended with new features to meet the rapidly changing demands of the building automation industry, and it was designed to be extendable without altering existing capabilities. As a result, BACnet controllers made today are interoperable with the controllers and workstations of the future. All controllers manufactured by Reliable Controls® use the BACnet protocol as the primary method of communication and are tested and listed by the BACnet Testing Laboratory (BTL). BACnet is here to stay: this year marks two significant anniversaries of BACnet protocol; DIN EN ISO 16484-5 celebrates ten years while ANSI ASHRAE 135 reaches an impressive twenty-year milestone.

Another factor promoting the growth of the smart building technology is the expanding volume of data required for more varied systems. In the past, building automation systems focused primarily on HVAC systems; however the industry is quickly expanding to include a variety of additional elements, all which work together to create the ultimate smart building technology user experience. It is evident that demand is quickly growing on a global scale and broadening the requirement for the types of data required.

“As businesses recover following the Great Recession, building owners continue to focus on managing their operational energy costs and risks. Often, gathering building data is not the issue; rather, combining, interpreting, and prioritizing that data is becoming the key challenge. Smart building solutions are valuable technologies for deploying energy management strategies that generate operational efficiencies, cost containment, and sustainability benefits that appeal to key stakeholders across the chain of command in building management,” said Jill Feblowitz, Vice President, IDC Energy Insights.

RC ReporterWith a variety of building automation systems in place around the world, there is a strong requirement for intelligent software to analyze the vast amounts of data being collected. Newly released Reliable Controls RC-Reporter® software allows users to easily access archived building data from the company’s RC-Archive® software product, in order to make informed operational decisions. Software solution from Reliable Controls allow users to analyze trend and runtime data from any BACnet, Internet-connected building and generate professional performance reports, quickly and accurately.  

RC-Reporter Software

While data-driven software has been in demand for several years now, we have yet to reach the tipping point, as early adopters are largely impacted by the vertical industry; buildings managed in the government or healthcare verticals tend to be more mature in their appreciation of the benefits of smart buildings and more advanced in their deployment. We are likely to see a shift in the near future, as smart building technology becomes more globally commonplace, particularly in homes and private sector workplaces.

[an error occurred while processing this directive] According to research by ON World, wireless sensor network technologies, a newer staple in smart building technologies, will enable 50 million smart homes and buildings worldwide by 2018. Smart thermostats are one of the fastest growing smart energy markets, currently used by 15% of the broadband and smartphone/tablet users surveyed by ON World, up from 9% in 2010. Annual shipments of wireless sensor network devices are expected to increase by more than 600% within the next five years, with the top three markets in energy management, smart lighting, and safety/security. This echoes the report from IDC Energy Insights, which also forecasts an uptick in areas including lighting, plug load, equipment maintenance, plumbing, and security, significantly expanding the smart building technology market.

With a focus on operational efficiency, energy savings, and occupant experience, Reliable Controls continues to design and develop new products that encompass the elements needed to evolve with the smart building industry.


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