Market Insight- Global Building Automation Systems Market
A building automation system (BAS) is an intelligent system comprised of software and hardware, connecting heating, lighting security, venting and air conditioning system (HVAC), and other systems to communicate on a single platform. Building automation systems are interlinked, centralized networks that can monitor and control the environment in commercial, industrial, and institutional facilities. The primary aim is to create an intelligent and efficient building and reduce energy and maintenance cost of the facility. Generally, a building controlled by BAS is referred to as an intelligent building or smart building or a smart home. When combined with sensors and other automation technologies, BAS can eliminate the requirement for human interference or control over various systems.
The global building automation systems market was valued US$ 69.64 Bn in 2019 and expected to reach US$ 153.43 Bn by 2027.
Market Dynamics- Drivers
- Increasing demand for building automation system solutions, in order to reduce energy consumption is expected to drive growth of the global building automation systems market during the forecast period
According to the United Nations Environment Programme (UNEP), buildings such as residential, government, commercial, and others utilize around 40% of energy generated worldwide, while commercial and residential buildings utilize around 60% of the global electricity and uncontrolled building operations resulting unnecessary energy wastage of between 10% and 25%. In such cases, BAS help in reducing these numbers, which in turn, is expected to support the market growth. Furthermore, building automation systems offer improved monitoring and control over numerous applications, thereby providing cost saving and optimization of energy consumption. According to the U.S. Department of Energy report, Building Automation Systems (BAS) can aid in annual energy savings ranging between 2% and 26%, with a median saving of 15%. In terms of cost, BAS solutions can aid with a median saving of US$ 0.12 /sq. ft. annually.
- Increasing security threat and growing demand for integrated security solutions are expected to propel the global building automation systems market growth over the forecast period
Increasing security concerns and rising demand for integrated security and monitoring solutions are expected to boost the global building automation systems market growth over the forecast period. Among all the segments, security & access controls holds the majority revenue share in the global building automation market. These solutions are safety-critical (e.g. fire or social alarm systems) and security-critical (e.g. intrusion alarm or access control systems) services.
North America region dominated the global building automation systems market in 2019, accounting for 42.0% share in terms of value, followed by Europe and Asia Pacific, Middle East and Latin America respectively.
Source: Coherent Market Insights
Market Dynamics- Restraints
- High initial cost and complications involved in implementation is expected to restrain growth of the global building automation systems market over the forecast period
Initial investment required for installation of building automation system combined with a long cost recovery periods are major factors hampering adoption of BAS solutions. The initial cost of installation is very high and may not be feasible for small-size buildings and stores. Moreover, implementation involves interoperability between software, hardware, networking devices, databases and others, which is quite a complex and resource consuming process. Hence, these factors are expected to restrain the global building automation market growth in the near future.
- Lack of skilled labors is expected to hinder the global automation system market growth during the forecast period
Installation, monitoring, and management of building automation system requires skilled professional, which are very rare to find. Moreover, there are uncertainties regarding long-term returns from system among users, which in turn, is expected to the demand for BAS. Moreover, challenges such as management of a number of devices and applications providing various functionalities have resulted in ambiguity about supervisions of different functions. Therefore, these factors are expected to hamper the market growth in the near future.
- Increasing adoption of building automation system hotels is expected to present significant growth opportunities
Hospitality sector has witness increasing adoption of building automation systems, especially those establishments that are seeking to differentiate themselves from competitors and focusing on building higher international, best-of-class hotels. Many vendors are offering wireless technologies to address vital issues of increasing energy costs in the hospitality sector. Although adoption of BAS in hospitality sector is in nascent stage, it is expected to gain traction with increasing awareness and regulations adopted by respective governments to mandate implementation of these solutions.
- Suitable government initiatives and incentives are expected to provide lucrative business opportunities
Governments of various countries are offering lucrative incentives to industries for adopting business automation systems. Since business automation system saves cost and reduces energy consumption, the government is encouraging various industries to adopt these system. Moreover, proactive initiatives by government agencies to promote the adoption of BAS solutions are expected to provide major growth opportunities for market players during the forecast period.
Source: Coherent Market Insights
- Integration of security monitoring solutions with other building automation modules to provide single-point control systems
Previously, security monitoring solutions used function independently on a separate network, which was not cost-effective and efficient model to operate a building. However, security monitoring solutions are now being integrated with traditional building automation systems. Furthermore, integration of security solutions will offer additional benefits such as sophisticated management, cost reduction, enhanced communication among building management modules, and reduction in incident response time. This trend is expected to continue during the forecast period.
- Technological advancements in HVAC segment expected to introduce advanced energy saving solutions for building automation systems
According to the U.S. Department of Energy, HVAC consumes 35% of the total building energy, which is why companies providing energy consumption solutions needs to focus on HVAC segment offering products including ACs, heat pumps, chilled water systems, heat pumps, building pressure systems etc. Furthermore, in the near future, companies offering HVAC are expected to focus on full open network communications between controllers, distributed high intelligence of all components, and technological advancement in energy optimization.
In global building automation systems market, by Application, the commercial, sub-segment dominated the global market in 2019, accounting for 46.5% share in terms of value, followed by residential, government and others respectively.
Value Chain Analysis
Key players operating in the global building automation systems market are Johnson Controls, Inc., United Technologies Corporation, Cisco Systems Inc., Honeywell International Inc., Legrand SA, Siemens AG, Schneider Electric SE, Ingersoll-Rand plc, Bosch Security Systems, Philips Lighting Holding B.V., General Electric Company, Lennox International Inc., and Rheem Manufacturing Company.
- Key companies in the market are focused on product launches, in order to gain competitive edge in the market. For instance, in November 2017, Johnson Controls, Inc. introduced BCPro, the smart building automation system (BAS) designed for conventional commercial buildings.
- Major players in the market are involved in capacity expansion, in order to enhance their market presence. For instance, in April 2018, United Technologies Corporation inaugurated new UTC Center for Intelligent Buildings, which is a state-of-the-art innovation and technology experience center.