Marketplace for smart building sensor data set to explode
Published in: Geographics
Data generated by the sensors in smart buildings have value not only to building owners, tenants, and occupants, but also to third parties like researchers and architects. These third parties increasingly rely on the data to optimize building design, safety, efficiency, and processes. This emerging use case for sensor data from buildings has two important implications:
1. As the volume of sensors in buildings increases, the potential to benefit from the data they generate also increases.
2. Anyone in a position to gather data from the sensors inside buildings is also now in a position to share that data with third parties, potentially for profit.
With the value and quantity of smart building sensor data currently in the rapid growth stage, stakeholders on both the buy side and sell side of the market would do well to recognize themselves as potential participants in the bidding marketplace for smart building sensor data.
How prevalent are smart buildings and smart building sensors already?
Smart buildings are not some unrealistic dream. According to a June 2020 report from Information and Communications Technology researcher Mind Commerce, around 75% of new construction over the course of the next five years will involve “at least one facet of IoT and/or related smart buildings market-related technologies.”
Spurred by a variety of government initiatives such as the European Green Deal (which we wrote about in our post covering the European Commission’s Sustainable Energy Week), existing buildings are likewise increasingly being retrofitted with sensors and equipped with software and control panels to make them “smart.”
A Q2 2020 report from smart building technologies market research consultancy Memoori, projects the number of IoT connected devices in buildings to grow from 1.7 billion in 2020 to just under 3 billion by 2025, with sensors that track occupancy movement and analytics set to experience the highest uptake during the period, at 14% growth per annum.
How big is the market for smart building sensor data?
The data generated by sensors in smart buildings already has proven value to third parties. A Q4 2018 report from above mentioned Memoori, for instance, found that the global market for “Big Data in Smart Commercial Buildings” alone was $15.6 billion at the end of 2018. The marketplace for building sensor data, however, is still in its infancy and is expected to grow dramatically as use cases are fleshed out. The Big Data in Smart Commercial Buildings segment, for instance, is expected to grow at 18% CAGR to $35.8 billion by 2023 according to Memoori’s 2018 report.
Why is there a market for smart building sensor data?
Data generated from a single building’s sensors is rarely sufficient to build the accurate models needed to improve smart building systems. For many of the most useful insights and applications, large datasets are needed. Research shows that collaborative data analytics, where data from a number of similar buildings is aggregated for analysis, is the best solution in this regard. For instance, in modelling a set of 10 schools with a similar design in a large city, a 2017 paper showed that as the data generated by each schools’ sensors was aggregated, more valuable insights could be derived. The researchers demonstrated that the potential savings from reduced energy expenditures grew with the number of buildings contributing sensor data to the model, reaching 90% when data from all 10 similar buildings’ sensors was included:
Who wants to buy smart building sensor data?
Data generated by sensors in buildings is a key ingredient for generating insights that can improve building design, and a wide variety of third-party stakeholders can derive value from building sensor data. For example, an architect can use heating, ventilation, and air conditioning (HVAC) data gathered from sensors in existing buildings to design more resource efficient buildings.
Other third-party stakeholders that need large volumes of smart building sensor data include analytics solutions providers, smart building software developers, researchers, government agencies, and building engineers. The potential use cases of sensor data from buildings are equally myriad.
Which market segments have the most potential?
1. Energy and maintenance
Smart buildings can be operated at a lower cost by optimizing the use of light, heating, water, lifts, and other assets, as well as the space inside the buildings themselves. Maintenance costs can be reduced by streamlining procedures like cleaning schedules and security, as well as by leveraging predictive maintenance on essential infrastructure like air filters and heating units. All of these optimizations promise to dramatically reduce the resources consumed by buildings, which currently account for about 40% of energy consumption and CO2 emissions globally. With big data being an essential component for developing improved designs, training AIs, and conducting other research, this market segment alone has huge potential.
An example of a current player in this market is Germany-based DABBEL. The company’s “AI Technical Facility Manager,” which is trained on large datasets from building sensors, is an application that DABBEL claims can save up to 40% of the HVAC energy consumption and CO₂ emissions of the buildings it is installed in.
Another example is Phoenix Contact, the global market leader and innovator in the field of electrical engineering and automation, that also provides robust and custom-designed solutions for smart buildings. The latter includes energy monitoring and efficiency, and micro grid, as well as operations like entry systems and door automation, lighting automation, boiler management, and domestic water pumping systems. The data gathered from sensors in buildings is essential for supporting the enhancements that make buildings “smart.”
2. Productivity and retention
Smart buildings have the potential to improve the productivity of their occupants by making workspaces more comfortable, enabling fewer distractions, optimizing airflow, improving ease of access to assets and amenities, and so on. The financial incentives in this regard may outweigh all other smart building applications, particularly in the commercial sector.
Memoori’s “Towards Data-Driven Buildings” report predicts that productivity and occupant experience related investments will drive growth in the still largely untapped commercial offices market, noting “significant market spending [is] projected in relation to a variety of predictive analytics, AI, and machine learning initiatives.”
A 2018 report from real estate consultant Stok, supports a similar conclusion. The authors applied financial impact calculations to findings from over 60 research studies on the effect of high-performance buildings on productivity, retention, and wellness. The report found that for a hypothetical company with 800 employees, just 7% of the benefit of operating in a high-performance building over a 10-year span comes from utility savings and just 2% from maintenance savings. The greatest financial benefit, 43% of the total, comes from enhanced employee productivity, while 41% comes from employee retention and 7% from improved employee wellness.
An example of a business currently leveraging building sensor data to improve productivity is Bosch. The tech and engineering giant’s IoT Suite and Connected Building software generates insights from a common data lake and presents them in a graphical dashboard.
In 2019, Bosch Singapore used its sensor-data driven system to implement a variety of productivity upgrades at its Singapore campus. A system operator can, for instance, view the air quality status across the floor plan and adjust HVAC systems to increase fresh air intake or optimize temperatures accordingly. The system also uses occupancy tracking sensor data to output usage trend reports that make it, according to Bosch Singapore’s case study, “easy to identify either poorly used or frequently overcrowded areas in order to improve space management.”
While Bosch’s system currently focuses on first-party sensor data, it’s entirely conceivable that it can derive deeper and more valuable insights by integrating third-party sensor data. In fact, Bosch’s smart building solutions come with open APIs, meaning they can be easily integrated with third-party solutions and existing Building Information Models or Building Management Systems.
3. Health and safety
Sensor data from buildings can be used to improve the health and safety of occupants, with applications ranging from air quality optimization to smart evacuation, security improvements, and even communicable disease prevention.
Sensor data from buildings can be used, for example, to support research into how best to minimize the spread of viruses like COVID-19. By, for instance, overlaying HVAC data with building architecture and outbreak maps, researchers can determine how the virus spreads, take steps to minimize the chance of infections, develop best practices for building occupancy, and even design or retrofit buildings to be “outbreak resistant.”
UK-based smart building solutions provider Pressac is an example of a business that uses data from sensors in buildings to provide solutions for managing space capacity and controlling the environment. The company recently published a brochure highlighting ways its sensor-driven system can speed up the safe return to work given the COVID-19 “new normal.” For instance, it can “enable organisations to manage their offices safely by accurately monitoring desk, room and space occupancy, helping managers to plan resourcing effectively.”
The peer-to-peer building sensor data marketplace opportunity
Smart buildings have massive potential to enhance the productivity of their occupants, improve health and safety, and reduce resource consumption. The data gathered from sensors in buildings is essential for supporting the enhancements that make buildings “smart.” That data is growing both in volume and importance, and will continue to do so thanks to technological improvements, financial incentives, and support from government initiatives.As stakeholders on both sides of the marketplace realize the growing value of the data generated from sensors in buildings, they naturally look for ways to exchange that data. Unfortunately, there’s currently a lack of open marketplaces that can enable the efficient exchange of data. This is largely due to technical barriers and issues relating to security. The result is a stifling of the growth in the size of the marketplace for data and, correspondingly the utility and value of sensor data from buildings. Databroker’s marketplace for data solves the previous security challenges by deploying a decentralized architecture that is supported by blockchain and other technologies. This enables buyers and sellers of building sensor data to exchange data securely at a peer-to-peer level, even supporting real-time exchange through APIs. In this way, Databroker’s marketplace can play an important role in unlocking the enormous value and potential of smart building sensor data.
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