The smart building market surpassed US$ 49.35 billion in 2020 and is predicted to hit around US$ 127.09 Bn by 2027, growing at a CAGR of 12.5% from 2020 to 2027.
Rising adoption of Internet of Things (IoT) devices in building management system expected to propel the market growth. Increasing cost of energy and rising environmental concern such as carbon emission & pollution are forcing builder to move towards smart building infrastructure that provides better security and cost saving wherever required. Smart buildings leverage cloud technology, sensors, and IoT connectivity that facilitates the user to remotely manage and control the lighting, air conditioning, security, and other house functioning. Smart buildings are more sustainable and energy efficient. However, lack of skilled professionals and coupled with increasing concern regarding IoT devices security may hinder the market growth.
Solutions segment dominated the global smart building market in the year 2019 and projected to continue its dominance during the forecast period. The augmented share of the solutions segment is mainly due to the rising demand for smart infrastructure across the public. Moreover, the rising trend along with increasing awareness among the public for the reliable and energy saving home appliances and features analyzed to open up new opportunities for the market players.
Solutions segment is further sub-segmented into building infrastructure management, security & emergency management, and energy management. Building infrastructure management held the largest revenue share in 2019 owing to rising need for a platform to optimize and control the large building infrastructure.
Building infrastructure management is further bifurcated into elevators & escalators system, smart water management system, parking management system, and others. Out of them, elevators & escalators system expected to flourish rapidly in the market owing to its increasing application in malls, residential societies, shopping centers, and large showrooms.
Commercial segment dominated the global smart building market in 2019 owing to rising concern of energy consumption along with several government regulations for the real estate sector to increase their focus on reducing energy consumption. Hotels, healthcare centers, and other commercial sectors are increasingly focused towards reducing IoT-enabled devices to reduce energy consumption. For instance, in September 2019, Marriott International partnered with Samsung and Legrand to convert their guest rooms into smart rooms where all devices were voice activated. The partnership aimed to uplift the global sustainability efforts of the hotel by elevating the gest experience.
On the other hand, residential segment expected to witness the fastest growth over the forecast period due to rising trend of smart home devices along with increasing security concerns in the building. Additionally, sensors, voice & mobile control devices facilitate users to have the access of major home appliances and areas under continuous surveillance and control.
North America captured the major revenue share in the global smart building market in 2019 and analyzed to augment the market during the forecast period. This is majorly attributed to rapid adoption of advanced technologies in the region such as IoT, big data, cloud computing, deep learning, data analytics, and artificial intelligence. In addition, the organizations in U.S. are significantly investing on smart infrastructure to reduce the energy consumption. As per a report published by Memoori in 2019, total funding rounds for smart building was 184 in 2018, out of which North America accounted for nearly half of the total funding rounds.
On the contrary, the Asia Pacific registered fastest growth during the forecast period. Rising initiatives for shopping malls, localities, and commercial offices with smart technologies projected to offer lucrative opportunities for the smart building market growth. In addition, the players in the Asia Pacific region are working towards enhancing the smart building services by developing the IoT-enabled building management systems across the region.
Key Companies & Market Share Insights
The global smart building market is fragmented and highly competitive owing to presence of significant number of players in the market. Some well-established market players are highly focused towards strengthening their market position by new development and investments in the market. For instance, IBM Corporation is actively providing smart building solutions and analytics for various types of commercial, residential, and industrial infrastructures. In June 2018, IBM Corp. announced that several new clients have deployed cutting-edge smart building solutions build on cloud using IoT technology. New clients such as Karantis, Sodexo, HUF Haus, and R +V Versicherung have signed an agreement with IBM Corp. to provide smart building solutions. In spite of growth prospects in the market, not all technology sectors experience the equivalent rate of adoption. Hence, utmost prospect subsists for industrialists by differentiating among segments and shine in those sections bestowing the highest growth probable, and commercialize different market-ready solutions.
Some of the prominent players in the smart building market include:
Segments Covered in the Report
This research report analyzes and predicts growth of market size at global, regional, and country levels. It also offers comprehensive study of the up-to-date industry developments in all of the sub-segments from 2016 to 2027. In order to study thoroughly this research study classified global smart building market depending upon different parameters such as component, application and region:
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