August 2007

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HVAC Control Systems Market
to Reach $12.7 Billion

Jared Malarsky

Jared Malarsky
Research Analyst

ARC Advisory Group

Dedham, Massachusetts; July 19, 2007: The worldwide HVAC controls market continues to grow at a steady rate in mature and emerging markets. The worldwide market for HVAC control systems is expected to continue growing at a compounded annual growth rate (CAGR) of nearly 4% over the next five years. The market exceeded $10 billion in 2006 and is forecasted to approach $13 billion in 2011, according to a new ARC Advisory Group study.

New Products
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In sharp contrast to traditional HVAC solutions, new requirements include providing facilities managers the tools to perform the same sophisticated business intelligence analysis typically reserved for business applications. “The goal is to develop intelligent HVAC solutions capable of providing facilities managers the ability to base operational decisions on real time performance data and uncover hidden costs,” according to ARC Research Analyst Jared Malarsky (, the principal author of ARC’s HVAC Control Systems Worldwide Outlook (

Reducing Long Term Energy Costs through Efficiency

Key factors contributing to growth include the drive to upgrade and efficiently operate the aging facilities in mature markets. Building owners and operators are focusing on the long term lifecycle costs of owning and operating existing buildings, one of the largest expenses facing companies today.

Enterprise integration is bringing transparency to this process, enabling strategic and efficient management of existing building assets. HVAC suppliers have continued to develop new solutions that feature more efficient hardware, integrated control systems, and management services. This is resulting in increased productivity and lowered costs, with minimal operational upsets. In addition, many smaller buildings that were not likely candidates for expensive, complex HVAC control systems in the past are now benefiting from lower cost, simplified control systems.

IT-based Solutions Enable Integration Across Buildings and Corporate Departments

There is a growing trend toward enterprise integration across departments and buildings via web services. IT-based solutions lay at the very heart of the direction the market is taking, and leading suppliers have spent the last two years developing these solutions. While offering web-based control will be less of a strategic differentiator going forward, there are still many related areas in which companies can distinguish themselves and improve their competitive advantage over peers. ARC expects HVAC controls to expand in functionality, convenience, scalability, and accessibility. They will be employed to support a broader range of applications, from the largest enterprises to more focused solutions that can grow in functionality as companies increase investments.

Emerging Markets Offer Opportunities for Advanced Controls

Corporations in Asia, the Middle East, and Latin America continue embarking on new construction projects to meet the needs of their expanding operations. From hotels in China to shopping malls in Dubai, these clean slate projects offer opportunities to implement advanced HVAC and related BAS solutions. Multinational corporations often prefer modern web-based control systems that give them real time access to information about overseas facilities.

For more information on this study, go to:

[an error occurred while processing this directive] About ARC: Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. No matter how complex your business issues, our analysts have the expert industry knowledge and first hand experience to help you find the best answer. We focus on simple yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and shareholder value. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax 781-471-1100, E-mail, Web

About the Author:  Jared Malarsky, Research Analyst, Jared is part of ARC's market research team. His focus area is Building Automation Systems (BAS). His regional focus is developments in manufacturing in the Far East, specifically China.

Prior to joining ARC, Jared lived in Beijing, China for six years. Most recently, he was involved in the light aircraft segment of China's growing aerospace industry. At PTE Systems, the authorized sales and service partner for Cessna Aircraft and Robinson Helicopter, Jared consulted with clients on aviation related maintenance, operations, and training. Prior to this, Jared worked at Topeak International Education, where he was involved in promoting a language testing and training system.

Jared graduated from Cornell University with a BA in Government Studies and a concentration in International Relations. He studied the manufacturing based economic growth of Japan, S. Korea, and China, in addition to learning about the cultural and political features of these areas.


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