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2023

Smart Building Market

Smart Building Market Size, Share, Competitive Landscape and Trend Analysis Report by Component (Solution and Services), Solution type Building Infrastructure Management (BIM), Security & Emergency Management (SEM), Energy Management, Network Management, Workforce Management, and Waste Management), and Building Type (Residential, Commercial, and Industrial): Global Opportunity Analysis and Industry Forecast, 2023-2032

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Author's: Pramod Borasi| Rohit Bhamburkar | Vineet Kumar
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Smart Building Market Statistics: 2032

The global smart building market size was valued at $78.28 billion in 2022, and is projected to reach $247.17 billion by 2032, growing at a CAGR of 12.3% from 2023 to 2032.

The surge in the adoption of smart buildings in multiple regions is driven by the growing need for better utilization of the building (and building premises) and the need for better resource management in urban environments. In addition, the growth in the need for public safety and security is fueling the growth of the smart building market. Such applications prove to be essential in the growth of smart building solutions during the period of the COVID-19 pandemic, which is expected to grow in the coming few years. For instance, smart building solutions can monitor indoor air quality (IAQ), and inform habitants and alerts building operators about the same. Higher indoor air quality is directly associated with health and well-being of building’s habitants. According to a report published by World Economic Forum in February 2021, non-residential buildings are on average 40% more energy-intensive than residential buildings. Energy efficiency measures such as the use of smart building solutions can mitigate this increase by atleast around 20%.

Global Smart Building Market Infographic

A smart building is a structure that uses IoT and automated technologies to control building functions such as heating, ventilation, air conditioning, lighting, security, and other systems. A smart building collects and manages data using sensors, actuators, and microchips in accordance with the functions and services of an organization (or household). Such smart infrastructure solutions assists building owners, operators, and facility managers in improving asset dependability and performance, decreasing energy consumption, improving space utilization, and reducing buildings' environmental effects.

However, security concerns associated with intelligent building and lack of funding & adequate infrastructure limit the growth of this market. Where there is data, there are risks of cyber security and data privacy threats. This causes building managers and businesses to limit their plans for expanding their IoT and data analytics investments for residential and non-residential buildings, as they have to take serious consideration for users’ data and privacy. Such factors limit the growth of the smart building market.

Conversely, the emergence of artificial intelligence in smart buildings and the rise in the IoT market & its application in smart buildings are anticipated to provide numerous opportunities for the expansion of the smart and intelligent building market during the forecast period. Internet of things (IoT) is one of the most important technologies used in smart building market. It connects multiple devices through a common Internet Protocol (IP) platform to exchange and analyze information. This has led to its numerous applications in smart building market such as smart HVAC (heating, ventilation and air conditioning) and smart lighting to enhance guest and employee experience, smart restrooms which schedule cleaning crews after a set number of visitors have passed through, and smart soap and smart paper towel dispensers which digitally alert cleaning crews when their levels are running low, or even restock on their own.

Segment Review

The global smart building industry is segmented into component, solutions type, building type, and region.

Depending on component, the market is divided into solutions and services. The solution segment is estimated to have gained the largest market share in 2022, while services segment is likely to grow at the fastest rate during the forecast period. Smart building solutions use IoT technology, which enable efficient and economical use of resources, such as IoT sensors, analytics software, a user interface, and a means of connectivity. This helps create a safe and comfortable environment for end users. In addition, it uses a range of technology, such as sensors and actuators, to gather activity data on various aspects within the building, which helps analyze and utilize operation more efficiently.

Based on solutions type the market is segmented into building infrastructure management (BIM), security & emergency management (SEM), energy management, network management, workforce management, and waste management. The security & emergency management (SEM) segment dominated the smart building market share in 2022, and is expected to have among the top market shares during the forecast period owing to the growth in digital disruption in people's everyday lifestyles contributing to the growth in demand for smart infrastructure solutions, which in-turn strengthens the demand for real time security & emergency management. The demand for SEM in smart building is increasing owing to intelligent evacuation systems that combines Internet of things (IoT), fog layer, and cloud layer. The IoT technologies are used to capture environmental information and the location of occupants to track their movements and automatically count those who have reached the designated muster, or gathering point. On the other hand, the workforce management segment is expected to witness the highest growth in the upcoming years, as the demand for green and sustainable building management solutions is aiding in the growth of the market.

Smart Building Market by Solution Type

In terms of building type, the market is segmented into residential, commercial and industrial segments. The intelligent building market was led by commercial buildings in 2022 and this trend is expected to continue during the forecast period. Meanwhile, the residential segment is expected to expand at the fastest rate during the forecast period. Infact, the 3 most popular characteristics of smart residential buildings are cloud-based software, smart amenities, and property management technologies (PMS). Different cloud-based devices can be integrated such as an apartment intercom system, building directory or CRM, communication tools such as Slack. PMS can automate many tasks such as collecting rent and managing resident maintenance requests. Examples of smart amenities include smart lights, smart locks, voice-controlled appliances, and smart thermostats.

Smart Building Market by Building Type

Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The smart building market was dominated by North America in 2022 and is expected to retain its position during the forecast period, owing to the presence of a highly developed ICT sector and high spending that aid the growth of the smart building market. However, Asia-Pacific is expected to witness significant growth during the forecast period, owing to various government initiatives and digital transformation trends within the region, which is expected to fuel the intelligent building market analysis in this region.

Smart Building Market by Region

Demand for smart building solutions is increasing significantly across various countries of Asia-Pacific, as it is an emerging market and is expected to occupy a significant market share owing to the rise in Internet penetration, increase in usage of cloud-based services among small and medium-sized businesses, and government initiatives promoting digitization and smart city development. Furthermore, the advent of high-speed networking technologies has been a key driving force in the smart building industry.

Competitive Analysis

The global smart building market is dominated by key players such as ABB, Cisco Systems, Inc., Hitachi, Ltd., Honeywell International Inc., Huawei Technologies Co., Ltd., IBM Corporation, Intel Corporation, Johnson Controls, PTC, and Siemens. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.

Recent Product Launches in Market

In May 2022, Siemens deployed AI integrated data center management software at the largest and most energy efficient data center in the Baltic region. The building management software (BMS), the energy and power management software (EPMS), and the White Space Cooling Optimization (WSCO) help Greenergy Data Centers to lower energy usage, ensure thermal protection, and manage reliable operation of the critical infrastructure.

In May 2023, Siemens Smart Infrastructure launched Connect Box, an open and easy-to-use IoT solution designed to manage small to medium-sized buildings. The latest addition to the Siemens Xcelerator portfolio, Connect Box is a user-friendly approach for monitoring building performance, with the potential to optimize energy efficiency by up to 30% and to substantially improve indoor air quality in small to medium sized buildings such as schools, retail shops, apartments or small offices.

In May 2022, IBM released the latest “AI adoption for business study and society standards”. The adoption and acceptance of AI is to enhance productivity and solve challenges with greater social and environmental impact and help companies address labor and skills shortage by automating repetitive tasks.

Recent Collaborations in Market

In February 2023, Johnson Controls, the global leader for smart, healthy and sustainable buildings, and Willow, a leading provider of digital twin solutions for critical infrastructure and real estate collaborated to digitally transform buildings and facilities into healthier, safer and more sustainable environments for their customers and occupants.

In Septembr 2023, BT and Johnson Controls collaborated to help business customers in the UK and internationally benefit from smart buildings technology to digitally monitor, analyse and optimize energy use in workplaces.

In April 2023, Siemens and IBM collaborated to develop a combined software solution integrating their respective offerings for systems engineering, service lifecycle management and asset management.

Top Impacting Factors

The high rate of adoption of smart buildings is driven by the increase in need of better utilization of the building as well as the requirement to better utilize resources in urban environments. Separately, the need for public security and safety also leads to the growth of intelligent building Market market. On the other hand, data security concerns associated with smart buildings hold back the market, apart from a paucity of funding and adequate infrastructure. Meanwhile, the ability to increasingly use artificial intelligence in smart buildings and the rise in IoT applications in smart buildings are expected to provide many opportunities for expansion of market during the forecast period.

Historical Data & Information

The smart building market is fairly competitive, owing to the strong presence of existing vendors. Market vendors are expected to gain a competitive advantage over their competitors because they can cater to market demands with a wide range of products. The competitive environment in this market is expected to increase as technological innovations, product extensions, and different strategies are adopted by key vendors.

Key Benefits for Stakeholders       

  • The study provides an in-depth analysis of the global smart building market forecast along with current & future trends to explain the imminent investment pockets.
  • Information about key drivers, restraints, & opportunities and their impact analysis on global smart building trend is provided in the report.
  • Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
  • The quantitative analysis of the market from 2022 to 2032 is provided to determine the market potential.

Smart Building Market Report Highlights

Aspects Details
Smart Building Market By Component
By Component
  • Solution
  • Services
Smart Building Market By Solution Type
By Solution Type
  • Building Infrastructure Management (BIM)
  • Security & Emergency Management (SEM)
  • Energy Management
  • Network Management
  • Workforce Management
  • Waste Management
Smart Building Market By Building Type
By Building Type
  • Residential
  • Commercial
  • Industrial
Smart Building Market By Region
By Region
  • North America  (U.S., Canada)
  • Europe   (U.K., Germany, France, Italy, Spain, Rest of Europe)
  • Asia-Pacific   (China, India, Japan, South Korea, Australia, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
Smart Building Market By KEY MARKET PLAYERS
By KEY MARKET PLAYERS
  • ABB
  • Cisco Systems, Inc.,
  • Hitachi, Ltd.
  • Honeywell International Inc.
  • Huawei Technologies Co., Ltd.
  • IBM Corporation
  • Intel Corporation
  • Johnson Controls
  • PTC
  • Siemens

Analyst Review

The demand for smart buildings has grown over the past few decades as smart buildings can help provide actionable information about a building (or a specific area inside the building), allowing owners or occupants to better manage the facilities of the building. The main purpose of developing a smart building is to save operating costs, increase occupant comfort, automate energy consumption management, track the state of critical building assets, and satisfy industry worldwide standards and sustainability requirements. Such features set of the smart building is promoting the growth of the global smart building market.

Key providers in the smart building market are PTC, Huawei Technologies Co., Ltd., and Hitachi, Ltd. With the growth in demand for smart building, various companies have established partnerships to increase their smart city solutions offerings.

For instance, in April 2022, ABB announced a joint partnership with South Korean electronics manufacturer, Samsung Electronics Co., Ltd. to develop energy savings, energy management solutions, and smart Internet of Things (IoT) solutions for both, residential and commercial buildings. In November 2023, NavVis announced a collaboration with Siemens Smart Infrastructure, in which the collaboration will be used for integrating accurate as-is 3D data and an immersive 3D experience to Siemens’ latest scalable building platform Building X. Siemens has defined this platform as a scalable digital building platform to digitalize, manage, and optimize building operations, allowing for enhanced user experience, increased performance, and improved sustainability. In addition, with the surge in demand for smart buildings, various companies have expanded their current services to continue with the rise in demand for smart city solutions.

For instance, in May 2022, American multinational technology conglomerate, Cisco Systems, Inc., announced the launch of its Cisco Cloud Controls Framework (CCF) to make sure Cisco’s cloud and IoT products & services meet security and privacy requirements with a simplified, rationalized, compliance, and risk management strategy, enabling efficient utilization of resources.

Moreover, many market players have expanded their business operations and customer base by increasing their acquisitions. For instance, in January 2021, American computer software and services company, PTC Inc., announced the acquisition of software as a service (SaaS) and product life cycle management (PLM) solutions vendor, Arena solutions. With this acquisition, PTC aims to strengthen its IoT and smart solution offerings.

Author Name(s) : Pramod Borasi| Rohit Bhamburkar | Vineet Kumar
Frequently Asked Questions?

The surge in the adoption of smart buildings in multiple regions is driven by the growing need for better utilization of the building (and building premises) and the need for better resource management in urban environments. In addition, the growth in the need for public safety and security is fueling the growth of the smart building market.

Region wise, the smart building market was dominated by North America in 2021 and is expected to retain its position during the forecast period, owing to the presence of a highly developed ICT sector and high spending that aid the growth of the smart building market.

The global smart building market size was valued at $69.80 billion in 2021, and is projected to reach $201.16 billion by 2030, growing at a CAGR of 11.3% from 2022 to 2031.

The global smart building market is dominated by key players such as ABB, Cisco Systems, Inc., Hitachi, Ltd., Honeywell International Inc., Huawei Technologies Co., Ltd., IBM Corporation, Intel Corporation, Johnson Controls, PTC, and Siemens. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.

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Smart Building Market

Global Opportunity Analysis and Industry Forecast, 2023-2032