Updated Overview Potential Challenges to BACS* With the BACS* market predicted to go on growing, multiple technologies and companies are moving into this space. Johnson Controls Honeywell BuildingIQ esight Energy * Building Automation and Control Systems ** Energy Management Systems IBM Microsoft Oracle Numerous other 3 rd parties 3 rd Party Software Applications (especially with Big Data) Cloud based BACS*/EMS** Monitoring & Management. Johnson Controls Lynxspring Dalkia (Veolia Environnent) Tridium CBRE Laconicly JLL Johnson Controls Honeywell Schneider Electric/McAfee Siemens Cyber Security DX Suppliers entering regular BACS and increasing sophistication Facilities Management and Energy Services VRF BACS*/EMS** LG Samsung Hitachi Mitsubishi Daikin Connected Homes & Buildings Deutsche Telekom Swisscom ADT Comcast Schneider Electric Honeywell Founten (Watsco) Communicating Room Controllers Smart-Home Energy Mgt. Systems in Commercial ABB Busch-Jaeger Gira Siemens Hager/Berker Jung Schneider LED Luminaire- Integrated Controls Intelligent Heating Controls Alpha Innotec Buderus BT Junkers Danfoss Siemens Viessmann Philips Cooper Cree Building Information Modelling (BIM) Autodesk Archibus BuildingSMART Bentley Systems BSRIA Page 1 1
Sophistication* New Edition Threats and opportunities for BACS Impact of 3 rd Party Applications and Big Data BACS Potential of Telcos and Other Utilities Residential Systems Competing with BACS Cyber Threat to Smart Buildings BACS Solutions Moving to The Cloud Growth of VRF Solutions HVAC Solutions with Built-in Controls Smaller communicating controllers Facilities Management & Energy Services Light Applications Large Scale Applications * Sophistication relates to attributes such as range of functions supported, capacity to communicate, analyse, learn and adapt, BSRIA Page 2 2
Updated Examples of DX providers moving into BACS 2 Samsung Techwin Subsidiary of Samsung specialising in : VRF units VRF with BACS and BEMS Now has own large scale applied BACS system in partnership with Distech; currently sold by Samsung only in the Korean market How long before they start to offer this system for sale outside home market of Korea? As of June 2015 Samsung is showing interest in offering Smart Building management technology in Europe as well. Samsung is also emerging as a leading supplier of Smart Home technology. Samsung VRF with BACS and BEMS In 2013 Samsung ranked 12 th in World Airconditioning sales, with a total market share of 2.6% (source BSRIA) Samsung large scale applied BACS system BSRIA Page 3 3
Updated In what ways are HVAC systems becoming more intelligent? Daikin Toshiba Carrier Johnson Controls Trane Mitsubishi Electric Hitachi LG Gree Midea MHI Samsung Panasonic DeLonghi Climaveneta Ebara Haier Fujitsu Aermec Broad World Market Shares 2013 $0 $1,000 $2,000 $3,000 $4,000 Chillers VRF Intelligent controller. Alliance with Intel to launch intelligent rooftop devices in 2015 Jan 2015 definitive agreement to form global HVAC joint venture Already established player in BACS Positioning Factory Automation for Building Automation Moves to offer Building Automation and to sell much of non- Japanese Aircon business Offers Building Automation system in Korea Offers Building Automation system in Korea Integrated Management System Intelligent control system Offers Building Automation system via Automated Logic Corp. The majority of major manufacturers of Chillers and VRF solutions already have a strategy in the BACS market. Source BSRIA World Market Shares, 2013 BSRIA Page 4 4
3 DO VRF SYSTEMS POSE A THREAT TO BACS? $14,000 Global Sales for VRF and Chillers 2012-2017 (Million US Dollars) $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 VRF Chillers Source BSRIA 2012 2013 2014 2015 2016 2017 VRF solutions have been steadily gaining global market share, overtaking chillers in 2011. Since then the gap has continued to widen. The majority of the leading suppliers of HVAC systems include VRF solutions in their portfolios. VRF solutions pass more of the control over the air conditioning process to the actual location where the cooling is to take place. There is potential to adapt VRF controllers so that they can control other air-conditioning units. This can enable them to take on some of the functionality of a regular BACS system. BSRIA Page 5 5
New New players entering the buildings market April 2013: Honda USA launched Smart Home US, including Energy Management and direct charging of vehicles from photovoltaic power. March 2014: US Smart Home Showcase opens. January 2014: Google s Acquisition of Nest Labs marks potential new entry into Smart Homes March 2014 Apple announce Siri Smart Home application January 2015 Facebook acquires speech-recognition start-up Wit.ai BSRIA Page 6 6
BACS penetration USA only 1/5 buildings have a BACS BACS are comparatively rare in US buildings of under 100,000 sq. ft. (equivalent to c. 10,000 m 2 ) The situation is similar in Europe, and this could represent a missed opportunity. A further risk for the established BACS market is that not competing at the lower end could allow new entrants the chance to gain critical mass. Commercial buildings = 83% of all nonresidential buildings 5.4 million buildings Of building stock: Of floor space: 94.8% 50% 3.0% 14% 1.5% 14% 0.5% 11% 0.2% 11% * Source: BSRIA Research BSRIA Page 7 7
The market position of the leading global telcos Company HQ 2014 Sales (USD bn.) Building Automation Policy 1 AT&T USA 128.8 Provides Smart home automation and smart security. Acquired Xanboo in 2010. March 2013 launched AT&T Digital Life Home Security and Automation. 2 Verizon USA 120.6 Sept. 2014 it revamped its smart home offering. Using FiOS Quantum Gateway and Zigbee home automation module. Developing M2M functionality. 3 Nippon Telegraph & Tel Japan 110.7 Is developing a Smart Home model in Kumomoto City. Nov 2014 opening of Fujisawa Smart City in which they are participating. 4 China Mobile China 102.5 2012 launched Easy Home Access with features such as security warnings, home electronics remote control, video surveillance, and WiFi internet. 5 Deutsche Telekom Germany 79.8 Has partnered with EnBW, eq-3, Miele and Samsung to develop QVICON. Its goal is to drive forward home applications and develop vendor-independent solutions for customers. Concentrating on energy efficiency, security and convenience at home. Has developed cloud based apps for M2M. In July 2014 announced integration with lighting control systems. 6 Telefónica Spain 75.8 Has launched Energy Efficiency building automation service in Spain, with around 30 clients, from banks to large stores. Sept. 2014, launched a limited European trial of AT&T s Digitallife home automation. 7 Vodafone UK 65.1 Is developing M2M capability in partnership with Intel. Initially the firms will focus on delivering an M2M capability that can be used across many different market sectors. They will then develop tailored M2M capabilities for use in specific products across the automotive, smart home and connected white goods sectors. Also formed smart home alliance with IBM. 8 America Movil Mexico 61.6 In 2009 announced Home automation applications to permit customers to monitor home security from outside of the office and perform other functions, such as operating certain home appliances. 9 Softbank Japan 55.6 In 2012 acquired a majority share in US based Sprint Nextel, who had already announced cooperation with Proliphix and SmartLabs to make energy management tools available to businesses and consumers. Joined the global M2M Association in Nov. 2013. 10 Telstra Australia 24.7 April 2012 announced plans to develop smart home services and develop M2M capabilities. BSRIA Page 8 8
Updated Enterprise Software Response to Big Data: IBM & Microsoft Since acquiring Tririga in June 2011, IBM has been developing its advanced analytics for building portfolios. This provide s a comprehensive suite of functions that can cover some of the key, interrelated areas of building management: Financial Management: Controlling cost of property portfolio. Project Management: Ensuring that capital delivers within required timeframe. Facility Management: Ensuring optimal use and occupancy. Maintenance and Operations: Providing information to support efficient maintenance. In March 2015, IBM announced a major project at Carnegie Mellon University to introduce cloudbased analytics of the systems at the university campus. Partners include SkyFoundry. Microsoft s Smart Building solution is based on a response to a real, practical problem: - Microsoft s global HQ comprises 125 buildings, built over more than 25 years, to different designs, using different contractors and hardware. - Over 30,000 data points, creating the potential for a perfect data storm. - Uses analytical software to monitor buildings and predict and pre-empt problems. Software tracks heaters, air conditioners, fans, and lights collects billions of data points per week. The team now collects 500 million data transactions every 24 hours. Identifies and priorities problems with equipment, factoring cost, impact, A key concept is the analytical blanket which lies on top of the BACS and HVAC systems in different buildings The Smart Building solution is now being promoted at various locations. - In July 2013 Microsoft announced a pilot in downtown Seattle. - In March 2015 King County WA (13 th biggest county in the US) announced roll-out of Microsoft solution to its major facilities. BSRIA Page 9 9
New Edition Building cyber security building a robust process In order to assure cyber security for building systems, and to prevent buildings from becoming an easy point of entry into the wider network, it is important that building managers develop and pursue a sustained strategy. Building Cyber security -- Some key steps and procedures Rigorous password & authentication policy Ensure involvement and support of IT dept. Regular review of access rights Some of the key elements in this strategy are shown in the graphic to the right. These include: Software (e.g. firewalls, analytics) People (e.g. building managers, IT department, independent auditors) Processes (authentication, patching, auditing) Separate servers by firewalls Run analytics to look for abnormal patterns / events Regular security audits Regular and ideally automated process for applying patches BSRIA Page 10 10
Updated Predicted movement of key BACS services to the Cloud Order of Uptake Access Control CCTV Energy Monitoring Energy Management BSRIA Analysis indicates that the process of developing cloud solutions for such key aspects of BACS as Access Control, Energy Monitoring and Energy Management is already well underway. Lighting Controls Video Analytics Compliance (Europe) Compliance (US) HVAC Controls Intruder Alarms Fire Detection 2015 2017 2020 The chart shows the expectations in the order of Buidling Services moving into the Cloud. The size of the circle gives an indication of their forecast potential growth over the next five years. BSRIA Page 11 11
Towards the information-based building? Ultimately, anyone responsible for managing a building is looking for the answer to a very simple question: How can I manage my buildings to provide a safe, secure, comfortable and productive environment as cost-effectively as possible? This can involve hardware, software, human overseeing and intervention. As with other areas of technology, the trend over time has been to: automate those activities which can be made predictable or repeatable, ensuring consistency while freeing humans for other tasks. collect and analyse all available information in order to monitor, improve and optimise performance while searching for new forms of improvement. As elsewhere, previously leading-edge capabilities become progressively commoditised. The winners are likely to be those companies which can provide both this automation, intelligence and service, either as a complete package or in alliance with strategic partners. The rewards are likely to be greatest for those companies which can add the most intelligence and value to the process. BSRIA Page 12 12