Innovations in Comfort, Efficiency, and Safety Solutions.
New Players Fight for a Stake
Building Internet of Things Market
As our recently
published report shows –
– smart, connected products offer exponentially expanding opportunities
for new and improved functionality; as they cut across traditional
product boundaries and add further capabilities.
There are a number of possible scenarios that may play out in the coming years:
We expect a combination of all 4
scenarios to play out, with different
IT players following different strategies. Should one or more IT
players go for scenario 1 and make a proper play for the buildings
market, this may help drive further raft of M&A activity as the IT
players look to gain the knowledge, skills and IP required to deliver
effective building related services.
In this scenario we would also see the poaching of sector-specific talent from building market players by IT companies as a means to build up their know-how in mechanical, electrical, physical and energy systems for buildings.
Scenario 4 involves the M&A activity happening in the reverse, with acquisitions flowing further up the value chain. In many cases the deep pockets of the major IT firms relative to most of the industry players in the buildings sphere this seems less likely. However we are already seeing some signs of the more powerful conglomerates focused on the building sector opting for the 4th scenario, with Schneider’s acquisition of Invensys allowing it to offer a much wider range of IT software solutions.
The lessons are there to be learnt, and
incumbents must adapt their
strategies to face a new interconnected reality, and flourish in a
promising growth market, or face being consigned to the pages of
history. If they can develop the right mix of skills and service
offerings, horizontal moves into adjacent markets such as smart grid,
retail or industrial sectors might also prove attractive to players in
the Building Internet of Things (BIoT) market.
Internet of Things Supply Chain Partnering
BIoT solutions make a tough sell if they
are made up of a disparate
collection of hardware, software and network products from different
vendors. Business practice, as well as improved standards and protocols
for interoperability, security, and performance will be required and
will require co-operation across the supply chain.
Some operators are attempting to develop end-to-end services internally as an offshoot of their own supply chain needs, but given the complexity and diversity of the IoT we expect most such attempts to fail. Several nascent consortia, partnerships and alliances of powerful IT industry players, telcos and semiconductor manufacturers are already emerging to serve the wider IoT market, but the dust has still to settle on which will win out. We cover these partnerships in greater detail in our research report – http://www.memoori.com/portfolio/internet-things-smart-buildings-2014-2020/
Nevertheless, such collaborations represent the best available means to develop standardized, stable, secure and seamless offerings that business can understand and trust and to deliver the benefits they are being promised.
It will be mutually beneficial to both the consortiums and the providers of building services / systems to join forces to better deliver the BIoT. For players currently operating in the vertical, it will give them the opportunity to work with leading IT firms to ensure the interconnectivity of their solutions. Whilst for the IT players it will give them greater insights into the particularities of the buildings market. We expect these emerging consortia to tempt increasing numbers of buildings players to join their ranks over the next 12 months.
The Growth in Cloud Based Offerings
Connecting smart solutions to the cloud
is becoming an increasingly
popular market model. It enables intangible service and product
suppliers to leverage previously unrealistic storage and analytical
power and hence deliver entirely new enhanced capabilities with the
product or service.
Cloud based offerings have taken many
forms to exploit this
opportunity, from IaaS (Infrastructure as a Service, PaaS (Platform as
a Service),SaaS (Software as a Service), Video Surveillance as a
Service (VSaas), and many others.
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