BEMS: Market Intro and Overview

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Buildings are getting smarter. In this series, I’ll look at that, focusing on three key themes of technology, software and innovation. First, though, in this post I’ll examine overall market trends and needs.

For proof that buildings are becoming more intelligent, you only need to look nearby – perhaps at the buildings you’re in charge of. They may automatically adjust temperature and air exchanges per hour based on occupancy, either of individual rooms or the entire structure. Those adjustments save energy and make the school, office building or other structure more comfortable. Consequently, such buildings cost less to operate, sometimes by a significant amount. What’s more, building occupants report 27% greater satisfaction. Studies show that high performance ventilation, thermal control and lighting make building occupants more productive.

What’s making buildings smarter? Building energy management systems or BEMS, which Navigant Research defines in their recent report as “an IT-based solution that extends the capabilities of sensing, control, and automation hardware to direct automated and/or manual improvements to system operations utilizing the data from multiple data streams.”

It’s a rapidly growing market, with BEMS revenues for hardware, software and services projected to balloon from today’s $2.7 billion worldwide to $12.8 billion by 2025. That works out to a compound annual growth rate (CAGR) of 18.2%. Virtually all that revenue, more than 90% Navigant Research says, will be come from sales of software and services. That makes sense since most of the activity will be retrofitting and upgrading existing buildings and building management systems. If a building’s sensors, actuators and valves can do the job, it is better to leave them alone and change only the software.

When it comes to technology, there are a wide array of BEMS solutions, but common elements typically include

  • Integration via BACnet
  • Data collection using wireless and cellular communication
  • Cloud-based software analytics accessible over the web or mobile devices
  • Network operations center

Some providers, those that are the larger ones, deliver end-to-end solutions built using these components. Smaller companies may partner with other suppliers to produce a comprehensive solution. One challenge faced by all vendors is that the market is evolving, both in technology and use cases.

What are those uses? Naturally, they include energy management (after all, it’s the EM in BEMS). Investments here can show up in utility bill savings, an easy-to-see measure of better performance. Another use case is to streamline maintenance and repair, as well as improve asset management. The payoff can be lower operational costs and shorter downtimes.

Another use case, perhaps surprisingly, targets space utilization. Occupancy tracking data can reveal where space is wasted and could be better used. That can be particularly beneficial in commercial office and federal government settings, situations in which space is at a premium.

A final trend driving innovation in technology and software involves building occupant engagement. The millennial generation that now makes up the largest segment of the workforce is comfortable with smartphones and associated applications. They expect certain behaviors from automated systems, including a BEMS. Giving them these capabilities requires changes – such as adding more brains – to building management systems.

That, then is today’s BEMS landscape: an expanding and evolving market with core features and common drivers. Basically, buildings are getting more intelligent because it makes economic sense, both in terms of saving money and increasing productivity. In following posts, I’ll look at how this is being done through technology, software and innovation. You can access the full Navigant Research Leaderboard Report, Building Energy Management Systems,” by clicking here.

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