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Speaking at the Smart Buildings Show in London earlier this week, Susan Clarke, Principal Analyst at independent technology research and consulting firm Verdantix delivered her talk “Smart Buildings in 2025: What Will the Technology Ecosystem Look Like?”
Verdantix recently interviewed 45 executives across facilities management, technology, real estate, software and building technology sectors to discover the key trends that are shaping the evolution of smart buildings.
What did the interviews reveal?
The 45 senior executives agreed on the importance of technology in the future of smart buildings. It holds one of the biggest seats at the table. But respondents didn’t agree on everything. Opinions differed on how this technology will be organised, and there are two very different futures imagined. One future sees a highly integrated and highly connected smart building. The other future sees a decentralised smart building.
What’s the difference between a highly integrated and a decentralised smart building?
In short, the difference is in data connectivity: highly integrated smart buildings have a single IP network, but decentralised smart buildings have asset-specific networks.
The decentralised vision sees multiple IoT platforms existing around single assets. According to Verdantix research, we’re seeing some emergence of this with lots of companies launching IoT platforms anchored and centred around their own products. The highly integrated vision sees a single IoT integration layer.
According to Susan, both are feasible and viable, but the highly integrated model is most likely to exist in simple smart buildings where there aren’t huge variations in asset types. On the other hand, the decentralised vision works better in highly complex buildings with multiple asset types, such as airports and where the cost to bring all data on assets onto a single platform is prohibitive.
What changes have we witnessed so far in the development of smart buildings?
The design and expected performance of smart buildings have been changing. Over the past ten years, environmental sustainability has been the primary vision shaping their development. The goal was to minimise environmental impact and score highly on different green building rating systems. The focus has been so rooted in maximising energy efficiency that the term “smart buildings” has become synonymous with sustainability.
But the fight for sustainability is highly competitive.
- The Crystal in London boasts good indoor air quality and a water management system, contains solar heating and rain water harvesting. It positions itself as one of the world’s most sustainable events venue.
- Bloomberg’s new European headquarters in London also claims to be the most sustainable office building, intending to “create a cutting-edge design” and set “new standards for openness and sustainability.”
Are we seeing a shift towards user-centric design?
Smart buildings now focus on workplace engagement with the hope that this will boost worker productivity and attract talent. This new era is well described by the phrase used by MCS Solutions “It’s about making buildings work for people.”
When the food brand Yum China opened a new office in December 2017, the Chief of Operations said the intention was “to create a happy workplace that will facilitate collaboration and inspire colleagues to even more creativity in daily work.” To achieve this, the focus was placed on design, modern furniture and collaborative workspaces.
These new quotes make no reference on sustainability; the focus is on those using it.
Susan explained, “Our interviews with the 45 senior executives suggested this vision may very quickly get some type of iteration.” Yet it’s not so simple. She continued, “There still remains challenges in proving the value of user-centric design.” Understanding how engaged your occupant is “becomes very difficult to quantify, especially when compared to sustainability.” The next challenge is that it becomes very difficult to understand how building conditions contribute to worker happiness and how investments in this should be balanced with staff salaries and bonuses versus improving the building.
What we’re going to see, according to Susan, is a continued focus on the occupant, but there are challenges for the building ecosystem to overcome.
Strategic space management might be a consequence of rising costs.
For buildings that will open in 2025, we don’t need to look too far into the future. The development cycle is on average 5-7 years. Buildings that will open in 2025 may already be in the design phases.
Verdantix conducted a global survey with over three hundred real estate and facilities executives to understand the important factors shaping real estate strategies. Unsurprisingly, 90% of respondents said it was important to optimise building operations in the next 3 years – this was defined as optimising practices around energy and maintenance. Interestingly, attention to energy and maintenance has been closely followed by maximising space.
So, what is driving this focus on space? When Verdantix dug deeper, they discovered that after years of high rent increases, rents are now sky high. And after some analysis on JLL’s Premium Office Rent Tracker, Verdantix found the occupancy cost per employee in premium areas is £15,000 a year – an incredibly high over-head – naturally pushing a focus on strategic space management. Likewise, when you reduce your space, you also reduce associated costs like energy and building services.
What emerging technologies can we expect in for the future of smart buildings?
User-facing technology predictions:
- More digital signage (such as kiosks).
- Location-based services (including the ability to book a room, report a maintenance request, access local services). This reflects the wider tech trend which brings employee applications away from the desktop, reflecting that there might not always be a fixed desk.
- Emergence of personal building controllers (allowing employees to adjust local building conditions themselves, such as lighting and temperature). This is an evolution of the traditional approach to managing buildings.
- Voice-based AI assistants which respond to natural language, either written or spoken. There are already digital workplace assistants being trialled today which tackle repetitive tasks like room bookings and finding certain types of data.
Building management systems:
- Functionality of the BMS will move to the cloud, but the control and management of security and fire systems will remain local.
- Targeted application of digital twin asset models.
- Space utilization sensors (wireless and in lighting).
- Embedded intelligence. Assets will contain more embedded intelligence to monitor performance.
The bottom line.
Future technology trends tend to be forecasted by the technology giants who are promoting their own products. IBM, for example, predicts a cognitive future which supports its own technology, and Cisco’s vision for digital buildings is a vision that shows a role for its own networking products. That’s why getting to grips with the future of smart buildings can be tricky. But as an independent research and consulting firm, Verdantix offers a refreshing look at the future of smart buildings.