Mass implementation of IoT in commercial buildings is inevitable, but getting there will not happen over-night
In a recent article for this newsletter, I wrote about how the Internet of Things was “A Not-So-Well-Known Benefit to Building Owners”. Noting that IoT will eventually become critical to efficiently operating, monitoring and managing commercial building systems, where pennies per square foot make the difference between profit and loss. I concluded the piece by saying that IoT is a subject that should be well-understood by real estate professionals.
All this is true and sound advice, but it doesn’t address the time and effort it will take to make the potential of IoT a practical reality in the Commercial Real Estate industry. Technology changes rapidly, but not instantaneously. IoT, which in the near future, may turn out to be the single most important contributor to building efficiency, cost savings and increasing profits is not a singular technology. It is a computer controlled system, which includes device sensor hardware, wired and wireless network connectivity, local and cloud based data management and analytics, and an array of dedicated applications all protected by layers of security code. Structured “software platforms” will be needed to gather, analyze and act on the inputted data before IoT can be truly beneficial. So creating or choosing the right platform, many of which are being created today, is obviously important. All this takes time, effort, money and technically savvy people. The ROI will be significant, but the effort will not be trivial.
Although not much passed the starting gun, the IoT ball is in play. First generation IoT is now being used for monitoring and controlling in-building electro/mechanical systems and maintaining the integrity of the security infrastructure of many buildings. As an example, AT&T reports that it has connected more than 30 million IoT devices to their network.
The main drivers for the growth of the IoT market are rising energy costs, increased awareness of environmental, health, tenant safety and convenience and government imposed regulations relating to those issues.
Here are interesting facts concerning IoT enabled smart commercial buildings.
- There are currently more than 1.1 billion intelligent embedded systems deployed globally, with more than 2.6 billion expected to be in place by 2016
- Analytics will play the largest part in Building Automation with the top 3 emerging solutions as Dashboards and Data Visualization, Fault Monitoring & Detection and Building Optimization
- The Safety and Security component of smart buildings is expected to grow at a CAGR of 34.6% by 2022.
- By 2020, Smart Buildings will have 50 Billion connected devices and 19.5% of all buildings in the US will be Smart with a market opportunity for vendors at $ 75 B.
- Some of the key technologies which will dominate the market of Smart Buildings and Smart home automation would be Bluetooth, RFID, Wi-Fi, GSM, Zigbee and eventually CBRS.
- The building environment is one of the most promising sectors for M2M applications, which could become more than the $1 Trillion industry by 2020.
*Note: Source is ‘Happiest Minds’ a digital transformation IT consulting & services company focusing on Big Data, Analytics Cloud, Mobility & Security for better business.
The Internet of Things also promises to bring new and innovative capabilities to a variety of industries. Examples are smart cities using smart technology such as automatic street signs, which coordinate traffic on a city wide basis, to autonomous cars and electric grid management. According to McKinsey Global Institute analysis, “the Internet of Things has the potential to generate $4 trillion to $11 trillion in economic value by 2025.”
In some respects commercial real estate developers and building owners have little choice in implementing IoT as it will keep them competitive and create competitive advantage over those who have not seen the merits of the technology.
Most real estate development and construction companies in the U.S. have taken an interest in IoT, but it will take time, effort and careful planning in order for these new technologies to be utilized to their full potential. Once again IoT is a subject that should be well-understood by real estate professionals.