Editor's Note: The following is a guest post from Casey Talon, a research director at Navigant Research.
The Internet of Things (IoT) has become a buzz in the mainstream media, and the banner of innovation for technology providers. The ongoing investigation into the Facebook data breach, however, highlights the real risk of consumer backlash as we wade through the realities of data-driven, technology-enabled convenience. The confusion and frustration for consumer goods is one thing, but what do these risks mean as IoT permeates the commercial buildings segment?
In the commercial space, IoT is a new lens on the maturing intelligent buildings market. IoT characterizes the deployment networked sensors, controllers, and communications infrastructure dedicated to delivering data to increasingly sophisticated analytics that direct operational improvements for broad business benefits.
We have moved beyond the stage of innovation framed around energy management systems and into the IoT era for more comprehensive business insight to deliver bottom line benefits, and harder to quantify improvements in operational efficiency, productivity, experience, and even brand. The most sophisticated intelligent buildings are defined by integration of building management systems with business intelligence tools. Vendors are driving toward deeper customer engagements supported by data analytics and services that make IoT impactful on day-to-day operational and long-term business strategy.
Understanding the risks
Increased connectivity of building systems brings about a new set of challenges to building owners and property managers regarding cybersecurity. Cloud-hosted SaaS offerings, remote access to automation and controls, and data-sharing across business and building systems bring fundamental changes to the close-looped nature of traditional building operations. The challenges are multi-dimensional:
- Common network security best practices can be overlooked because facilities management has historically focused on siloed systems, and rely on personnel with deep mechanical or electrical expertise, but limited information technology tool kits. Best practices can help reduce cyber risks such as deployment on dedicated networks, utilizing firewalls, directing access control, and even basic employee education and rules around passwords and system use.
- On the supply side, secure devices and systems are table stakes, but certification and standardization is fragmented. One approach is to build solutions that comply with broader industry security standards such as the Payment Card Information Data Security Standard (PCI), Health Insurance Portability and Accountability Act (HIPPA), and Federal Information Processing Standards (FIPS), as well as relevant International Organization for Standardization (ISO) standards.
Weighing the benefits
The bottom line is that cheaper, more effective devices can be deployed in nearly any building to give decision makers better information specific to their business goals. The digital transformation of commercial facilities is beneficial because the comprehensive dataset can be translated into the diverse economic and business metrics that are most important to the increasing sphere of influencers and decision-makers.
Intelligent building technologies can help achieve intangible business benefits around brand such as sustainability, culture or innovation. At the same time, these investments help customers overcome significant and sector-specific business challenges that are threatening traditional business models. Consider the following:
- Commercial office: Workplace changes are placing new demands on office building owners. Worker demands for flexibility are leading to a complete reset in space planning, resource use and technology demand. The intelligent building enables more dynamic resource management and proactive engagement with occupants because of real time data on space use and even predictive analytics to optimize equipment performance to refine the office experience.
- Education: In higher education, alternative education options such as online programs are becoming more prevalent shifting the expectations of full-time student attendance. This trend can put new pressures on the facilities and energy management teams managing campuses with either fewer students in total or more variability in classroom use. Furthermore, many colleges and universities remain on the cutting edge of climate and sustainability commitments to support their mission and attract and retain employee and students. IoT deployments can give these schools the data they need to redefine their facility operations.
- Retail: Online shopping options have created new risk for brick-and-mortar businesses that now struggle to bring customers through their front doors. Intelligent building solutions can dramatically shift the shopping experience – indoor positioning, wayfinding, mobile applications can create a new personalized shopping experience and even create a seamless omni channel interface – research online, pick-up in real time.
Each of these examples illustrate business-specific challenges that intelligent building solutions can help tackle. The digital infrastructure, analytics and advisory services of an intelligent building can help owners optimize operations for comfort, productivity, and other customer/occupant demands to differentiate their facility against their competition.
Bringing new solutions to market that align with customer demand
Customers are looking for solutions that translate a complete data profile of their facilities, systems and operations into business metrics around cost, experience and sustainability. The result is an evolving technology landscape.
Flexibility and scalability are key characteristics of successful intelligent building technology providers. Customers are grappling with how to choose the right analytics solution and partner considering their unique and specific business challenges. Vendors are taking note and repositioning their solutions to address this more complex and variable set of expectations. The result is a rapidly growing intelligent buildings market, which is projected to grow by 18% over the next decade reaching over $67 billion.
In the commercial sector, the benefits of IoT and connectivity translate to billions in new revenue. Technical expertise from advancement markets and evolving incumbents can overcome the biggest gaps in cyber security risks if they effectively engage their customer base. The intelligent buildings market is well positioned to demonstrate the benefits of IoT for other industries as deep customer-solution provider benefits take hold.