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The Global Smart Buildings Market size is estimated to grow by USD 46,123.2 million between 2022 and 2027 accelerating at a compound annual growth rate (CAGR) of 9.73%. The growth of the smart building market depends on several factors, including the stringent government regulations on energy consumption in buildings, the growing need for building automation to enhance business outcomes, and the increasing demand to conserve energy.
This smart buildings market research report extensively covers market segmentation by solution (software, hardware, and services), product (BMS, HVAC, lighting control, security and access control, and others), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing need for building automation to enhance business outcomes is notably driving the smart buildings market growth. There are several advantages to building automation software. For example, the software acts as a control system, for the automatic regulation and control of facility subsystems, by maintaining the predefined parameters for different systems in a building. Therefore, this software allows industrial, residential, and commercial buildings to manage, control, and operate the functioning of their buildings easily and more efficiently.
Considering these benefits, building automation has become an integral aspect of businesses these days. The adoption of building automation software enhances the cost savings of organizations significantly by facilitating efficient energy management. For example, all the parts of an HVAC system, including the different components, are connected to building management systems, and an alarm is generated if the value for any of these sub-systems exceeds the predefined limits. Such factors play an important role in driving the growth of the smart building market in focus.
The growing concept of BIoT is the primary trend in the smart buildings market. Smart building is the integration of all standalone automated systems with additional support features such as cloud integration. An individual automated system generates information via smart sensors and actuators and integrates the processed information with building management control systems.
BIoT is the new concept of making the building intelligent to take insights from the information and react automatically. The cloud infrastructure connects the sensors and actuators to exchange information among themselves and improve the working conditions. This technology enables the expansion of automated systems by simply connecting more devices to existing infrastructure. BIoT allows the integration of handheld devices such as mobile phones and tablets with building control to handle the process remotely. The analytical reports help managers to optimize energy efficiency and the working environment further. Vendors are also making continuous efforts to integrate smart buildings with cyber security and connected buildings technology. Therefore, the increasing adoption of BIoT in smart building solutions will boost the growth of the smart building market in focus during the forecast period.
The high switching and installation cost is a major challenge impeding the smart buildings market growth. Building automation provides enhanced visibility of energy utilization in a building at the sub-meter level, paving the way for more efficient facility management. Thus, vendors are developing advanced features, better functionalities, compatible features, and innovative technology to improve operational functionalities, which, in turn, increases the overall price of building automation solutions. Moreover, the effective installation of these systems could make it necessary to carry out several alterations to the entire wiring of a building. The high costs associated with these installations, in combination with the cost of the products and software, make the solution extremely expensive and have restricted the acceptance of smart solutions to large commercial enterprises. Additionally, the integration of buildings automation with business systems and cybersecurity further increases the cost of installation multifold, which hampers smart buildings adoption rate in a few sectors.
Higher switching cost is also a major challenge that negatively influences the adoption of smart buildings. Several cost-driven enterprises find it difficult to transform from their traditional building systems to an intelligent system approach because of the high switching costs. Smart building software installation involves higher costs compared with those associated with conventional smart building software. The implementation process also takes time, which delays mission-critical events, prohibiting end-users from adopting the integrated approach. However, it is expected that such challenges will ease during the forecast period as many new and existing buildings implement cost and energy-saving smart building solutions.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Smart Buildings Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the smart building market.
ABB Ltd. - The company operates under multiple segments including electrification and industrial automation among others, with a high focus on electrification. The company under this segment?manufactures and sells electrical products and solutions which are designed to provide safe, smart, and sustainable electrical flow from the substation to the socket. The company's key offerings include?smart buildings.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The smart building market share growth by the software segment will be significant during the forecast period. Smart buildings depend on software as each component needs an insightful solution connected to analytical tools and all other control systems. A building is smart when all the devices can understand the environment, take action, and generate an analytical report, which is achieved through software.
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The software segments show a gradual increase in the market share of USD 27,952.08 million in 2017 and continued until 2021. Software plays an important role in smart buildings through integrated building management systems. In such management systems, the software helps in collecting all the information generated by different subsystems, processors, storage devices, cameras, and sensors. The information collected is then processed and used to analyze and arrive at the best course of action, which is then circulated to the appropriate sub-system or device for further corrective or preventive action. Increasing commercialization in growing economies has led to growth in new buildings, and rising energy consumption has created an urge to save energy. Governments worldwide are largely focusing on converting new construction into smart buildings to balance the trade-off. Therefore, the software market is predicted to show high growth during the forecast period.
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APAC is projected to hold a share of 31% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the smart building market during the forecast period.
APAC is a rapidly growing region in terms of smart buildings due to increasing commercialization and industrial development activities in growing economies countries such as India, China, Taiwan, South Korea, Singapore, and Australia. Increasing awareness regarding smart solutions among end-users and respective governments' efforts to curb emissions and save energy are the major growth drivers for the market in focus in APAC.
Rapid urbanization in emerging economies in APAC has resulted in the exponential growth of the regional construction sector. With the increase in construction activities and the introduction of the smart buildings concept, many buildings are being integrated with smart technologies to improve the lifestyle of occupants and achieve energy efficiency. Investors and construction sector players in APAC are rapidly embracing technology for next-generation buildings. This has fundamentally changed the way buildings are being designed, built, and operated in the region, which is the major driver for the regional smart buildings market.
With various government agencies in APAC lifting the lockdown restrictions imposed after the spread of the COVID-19 pandemic, the regional smart buildings market witnessed growth in H2 2020. In addition to APAC, European regions also witness growth during the same period, owing to the rapid adoption of IoT devices at home. The construction industry witnessed growth in Europe in 2021 owing to the resumption of construction activities and the initiation of large-scale vaccination drives. Also, the rising focus of governments in Europe regarding various smart city projects is expected to promote the adoption of smart buildings during the forecast period.
The smart buildings market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Smart Buildings Market Scope |
|
Report Coverage |
Details |
Page number |
187 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 9.73% |
Market growth 2023-2027 |
USD 46,123.2 million |
Market structure |
Fragmented |
YoY growth (%) |
8.96 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
APAC at 31% |
Key countries |
US, China, Japan, UK, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., Advantech Co. Ltd., BuildingIQ Inc., BuildingLogiX, Cisco Systems Inc., Delta Electronics Inc., Emerson Electric Co., Honeywell International Inc., Johnson Controls International Plc, L and T Technology Services Ltd., Legrand North America LLC, Robert Bosch GmbH, Schneider Electric SE, Siemens AG, Snap One LLC, Softdel System Pte. Ltd., Verdigris Technologies Inc., Panasonic Holdings Corp., and International Business Machines Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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