Press Release - Growth in the Intelligent Buildings M2M sector will be driven by building security and demands for energy efficiency

31 December 2013

Machina Research has issued its annual Sector Report on the Intelligent Buildings sector. The sector will generate almost USD300 billion in revenue, with security the largest application today. Home automation is growing fastest and represents a huge long-term opportunity.

Machina Research, the world’s leading advisors on M2M today published its most recent report, Machine-to-Machine (M2M) Communication in the Intelligent Buildings sector 2012-22. It provides a detailed analysis of the market opportunity associated with the connected homes and business premises. The key findings are:

  • Intelligent Buildings is the second largest sector for M2M revenue, second only to Consumer Electronics. The market will grow at a CAGR of 16% between 2012 and 2022, from USD69 billion in 2012 to USD297 billion in 2022.
  • Security is the largest application group within the sector, generating 47% of total revenue by 2022. The security market is already well-established and will benefit significantly from M2M connectivity as alarms, CCTVs and access control systems increasingly become connected. Over the forecast period, there will be a trend towards mobile connectivity as a back-up to fixed network connectivity in cases where the fixed line is compromised. There will also be a large number of pure mobile solutions, particularly in the residential sector. Hence, this application group will present the largest opportunity for mobile network operators. The business security market comprises a number of well-known, specialist providers in each market, some of which are already purchasers of M2M services. Mobile operators therefore are in a prime position to partner with security companies and the commercial opportunity is significant although sophisticated procurement processes keep margins down. Residential security combines a large market in terms of revenue and high margins. The fact that the market is well-established and subject to relatively less intense competition means that margins are significant and remote monitoring is generally a premium service.
  • Home automation is set for substantial growth as it enables reductions in energy usage. According to the International Energy Association (IEA), buildings account for around one-third of global final energy use, and one-sixth of end-use direct CO2 emissions. Concerns about climate change are making energy efficiency a priority and some reports suggest that up to 50% of this energy is wasted. It is evident therefore that there is a huge incentive for commercial building owners and facility managers to increase efficiencies and reduce energy spend. Likewise, in the face of rising energy costs, home owners are pursuing the same goals, giving both group strong incentives to deploy M2M. M2M monitoring and control, coupled with increased automation, has the potential to reduce power consumption significantly, particularly in HVAC and lighting systems. M2M remote monitoring, and the potential to raise alarms directly with security services can also add huge value to security systems. It is only when relevant standards emerge (and towards the end of our forecast period) that the market for domestic home automation is really likely to take off, when domestic appliances and heating controls are supplied ready to plug-and-play. We see the market for home automation maturing in something approaching a decade from now, and only approaching its full potential within another decade. The fastest growing application group in terms of revenue is The Building Automation application group is the fastest growing over the forecast period, with a CAGR of 37%, to reach USD135 billion.
  • The market for network infrastructure is more-or-less flat, while microgeneration is small but growing fast. There are two other application groups considered in the report. Network Infrastructure generates around USD16 billion although this market is fairly mature and remains relatively flat over the forecast period with market expansion in terms of device count being offset by unit price erosion. Microgeneration is niche but not insignificant, generating almost USD8 billion by 2022.

About the Report

The report Machine-to-Machine (M2M) Communication in the Intelligent Buildings sector 2012-22 analyses and sizes the M2M opportunities in the Intelligent Buildings sector. We have identified 4 core groups of services and applications (Security, Building Automation, Microgeneration and Network Infrastructure) which will benefit from M2M connectivity. Each of these is divided into several sub groups of applications.

The forecast Data Sheet includes very granular 10 year market forecasts for 6 regions (country level forecasts are available through the Machina Research Forecast Database). The forecast covers numbers of connections, traffic and revenue for each of the identified automotive application groups with splits by technology (Short range, MAN, Fixed WAN, Satellite, 2G, 3G and 4G) and a detailed break-out of the revenue opportunity.

The report is available as part of the Machina Research Advisory Service.



For more information about this report, to discuss the findings, understand more about the Forecast Database, or just to find out more about Machina Research, please contact us.

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