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1 Smart Buildings Market Overview – Prepared for Intesa Sanpaolo Innovation Centre – December 2016
1
Smart Buildings Market Overview
– Prepared for Intesa Sanpaolo Innovation Centre –
December 2016
2
Context and headlines (1/4)
• Energy efficiency in developed markets and infrastructure roll-out in emerging markets will enable growth
in the homes and buildings industry
• Within this, Frost & Sullivan expects the connected homes market to double in size over the next five
years, with a CAGR of 18.1% in revenue terms
• Connected homes together with IoT in smart buildings and energy management services are three key
areas identified by stakeholders
• A connected home is a residential solution using advanced technologies that offers a variety of
services varying from entertainment to education but notably including, safety & security, health &
wellness and home automation
o Effective safety & security is a prerequisite to adoption of cloud-based solutions and therefore
growth in the connected home market; security also represents an opportunity from an application
point of view, with more accurate IP cameras driving the surveillance segment
o Axis Communications, a Swedish company, is the market leader here, with Panasonic and
Samsung also key global participants
o Italian end-users perceive great benefit from smart security and monitoring solutions
o Uptake of health & wellness solutions in the home is driven by a range of fundamental underlying
demand- and supply-side drivers
o Collaboration across the complex industry value chain and wider healthcare ecosystem plays a
critical role in designing new solutions; key developments over the next three years will leverage
new sensor technology and include monitoring and diagnostic products
o Europe has begun to invest in home healthcare with Italy the fourth largest market
3
Context and headlines (2/4)
o In Italy, the telehealth and telecare segments will grow at 4.7% and 3.4% CAGR (2015-20,
revenue) respectively, as continued investment in Integrated Personal Health and Social
care services offsets the absence of an established reimbursement scenario
o A home automation (HA) system is a centralised solution that controls two or more home functions
from remote locations
o The market has undergone major changes over the last couple of years driven by the introduction of
smart products and new business models; nnonetheless, a lack of device interoperability and
complex installations continue to inhibit adoption by the mass market
o Between 2014 and 2019, revenue growth of 12.2% CAGR in Europe will be fueled by new
subscribers to create a market valued at $ 495.5 million
o From a competitive perspective, the top end is concentrated and dominated by players which serve
the luxury segment ; Crestron, the US-based market leader, holds a 13.8% share, benefits from
robust brand recognition and is expanding into less exclusive markets
o Moving forward, the adoption of a common communication framework based on industry standard
technologies will allow peer devices to interconnect and manage the seamless flow of information,
irrespective of service providers
o Italy will remain the fifth largest HA market in Europe through the forecast period behind
the UK, Germany, France and Benelux
o The luxury segment, where the focus is on providing target high-end customers with
comfort and entertainment, will enjoy modest growth; the mass-market segment will benefit
from greater exposure in retail stores and online distribution channels in the next 5 years
4
Context and headlines (3/4)
o From a competitive standpoint, the Italian player Vimar holds a strong position and offers a
comprehensive solution that is capable of managing climate control, security, window
treatments and lighting
• IoT is a game-changing opportunity for buildings, enabling industry participants to provide integrated
Building Automation Systems which maximize operational efficiency, enhance innovation and offer
remote services
• A focus on the efficient performance of commercial buildings has increased demand for centralisation
and greater connectivity between ‘things’ and people; nonetheless, high initial investment costs and a
lack of investor conviction on returns acts as a continuing break to more rapid adoption
• In North America alone, Frost & Sullivan expects the IoT enabled smart buildings market to be valued
at over $44.8 billion by 2020
• For industry participants, the IoT will require a rethink of the established value chain and the adoption
of new business models
o Intel for example is the market leader and has partnerships with Accenture, Booz Allen Hamilton,
Capgemini, Dell, SAP and Tata
o Microsoft is also a leading player with a service which allows customers to improve the operational
efficiency of their buildings through asset monitoring
o Siemens and Honeywell are at earlier stages of developing their IoT solutions but are both active
members of the Open Internet Consortium alliance
• The transformation of IoT beyond 2016 will depend on innovations in data security as well as data
privacy and device interoperability
5
Context and headlines (4/4)
• The energy management market segments into home and building systems and, below this, into a
range of hardware products and software applications
• High energy prices drive the demand for EMS on the utility and end-user side with the presence of a
number of EU Directives is also key to continued adoption; nonetheless, high initial investment
hampers the penetration of EMS in small organisations
• Over the next 5 years, the combined HEMS and BEMS market is expected to reach $1,81 billion,
growing at a CAGR of 10.6% from 2014 through to 2019
• Single dwelling units drive demand on the home side whilst commercial applications dominate the
building segment
• The competitive set is quite distinct with AlertMe growing its share on the HEMS side, generating
$33.9m in 2014; competition in EMS will intensify however as facility management (FM) and utility
companies compete with energy service companies (ESCOs), building automation (BA) vendors to
offer a turnkey service business
• From a technology point of view, real-time BEM is becoming a reality due to advances in software
control and cloud solutions; this will increasingly allow smartphone-savvy and energy-conscious end
users to manage devices through mobile apps
o Frost & Sullivan considers Italy, which is leading many countries in terms of smart meter rollout, as
a high potential market for EMS
o The development of new flexible network management will attract HEMS suppliers to enter the
market which will assist growth during the forecast period and energy-efficient renovations and the
EU EPBD framework are expected to be the key drivers of expansion in the BEM segment
6
Introduction
7
Energy efficiency in developed markets and infrastructure roll-out in emerging markets
will enable growth in the homes and buildings industry
Europe
Energy efficiency is a key topic in Europe,
driven by high electricity costs and legislative
pressure. This is filtering into the buildings
space, with increased adoption of smart
thermostats and home and building energy
management systems.
Japan and South Korea
Front runners in
Asia-Pacific in homes and
buildings technology.
India
Current focus is on Smart
Cities. India will develop
100 Smart Cities and the
first 20 Smart Cities were
announced in January
2016.
China
Climate change is a hot topic in
China and this is driving the
agenda of energy efficiency in
the buildings sector.
North America
The major initiative at the moment is toward
increasing building efficiency and moving to
zero net energy. The objectives are set for
2025 and 2030; however, many companies
are now starting to take action. There is also
a focus on cyber security legislation to
protect privacy.
Latin America
The current recession
across the region has
reduced the growth
potential in the homes and
buildings sector. 2016 will
be a challenging year for
development.
Homes and Buildings Industry: Regional Trends, Global, 2015–2016
Frost & Sullivan
8
Within this, Frost & Sullivan expects the connected homes market to double in size over
the next five years, with a CAGR of 18.1% in revenue terms
0,0
5,0
10,0
15,0
20,0
25,0
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
2015 2016 2017 2018 2019 2020
Revenue 54,18 61,77 70,97 83,10 100,97 124,70
Growth Rate - 14,0 14,9 17,1 21,5 23,5
Gro
wth
Rate
%)
Re
ve
nu
e (
$ B
illi
on
)
Year
Connected Homes Market: Revenue Forecast, Global, 2015–2020
CAGR (2015–2020) = 18.1%
Frost & Sullivan
All figures are rounded. The base year is 2015
9
Connected homes together with IoT in smart buildings and energy management services
are three key growth areas identified by stakeholders
35%
17%
31%
2%
15%
Connected Home Solutions
IoT Solutions for Buildings
Energy Management Services
LED Lighting
Building Management & Control Solutions
Fastest growing market in 2016 according to industry participants Sample size = 150
Frost & Sullivan
All figures are rounded. The base year is 2015
Homes and Buildings Industry: Fastest Growing Markets, Global, 2016
10
Connected home solutions
Safety & security and Health & wellness
11
Home Automation: Remote
monitoring and centralised control of
lighting, window blinds, and home
appliances
Home Entertainment: Personalised
entertainment through open platforms
from various broadcasters and
Internet providers
Health and Wellness: Continuous
monitoring and evaluation of the general
fitness and well-being of occupants
• Smart and wearable devices (e.g.,
Logbar Ring, Google Glass, smart
lighting, and smart garments)
• Health Monitoring
• Emergency Dispatch Communication
Virtual Education: Virtual tutoring
through technology-enhanced Web-
based services and high-speed
Internet
A connected home is a residential solution using advanced technologies that offers a
variety of services varying from entertainment to education but notably including safety
& security, health & wellness and home automation
Safety and Security: Remote
surveillance of entire home
and occupants through
smartphones and tablets
• Video Surveillance
• 24/7 Monitoring Service
• Window/Door Sensors
• Motion Detection
• Smoke/CO Alarm
• Water Leak Detection
Frost & Sullivan
Connected Homes Market: Segmentation, Global, 2016
12
Effective security is a prerequisite to adoption of cloud-based solutions and therefore
growth in the connected home market
Government40.0%
Industrial35.0%
Consumer25.0%
40,0
50,0
59,5
71,0
87,0
102,0
117,0
126,0133,5
148,0155,0
0,00
20,00
40,00
60,00
80,00
100,00
120,00
140,00
160,00
180,00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Rev
en
ue (
$ B
illio
n)
Year
The global market for cybersecurity in 2015 is estimated at $102 billion. Increased investment, in particular in the
context of the connected home, means that the consumer segment will grow to account for approximately 25% of
the total in 2016.
Total Cybersecurity Market: Revenue Forecast,
Global, 2010–2020Total Cybersecurity Market: Estimated Per Cent
Sales Breakdown, Global, 2016
CAGR
14.5%
Frost & Sullivan
All figures are rounded. The base year is 2015
13
Security also represents an opportunity from an application point of view, with more
accurate and versatile IP cameras, together with video analytics solutions, driving the IP
surveillance segment
• While surveillance cameras are growing overall at a low double-digit rate, the share of legacy analog cameras as a
percentage of total market units is falling quickly. As a result, the network camera growth rate is fast outpacing the total
surveillance camera growth rate.
• IP cameras are evolving with respect to time and place of usage and the level of accuracy required in surveillance. In
addition, advanced compression standards, such as H.264, are gaining importance due to their versatility and the
presence of developed network infrastructure.
• In addition, video analytics is gaining importance and leading market participants are investing heavily in R&D to develop
advanced video analytic solutions;
Video
Analytics
Effective Security: Usage of surveillance systems involves manual verification of video streams stored in server or
live feeds, requiring human operators to analyze and identify threats and patterns. This approach is highly susceptible
to manual errors and requires continuous human monitoring. With analytics, context-aware alarming as well as
behavioural reporting scenarios can help reduce manual interventions. Video surveillance will enable end users to
anticipate threats and patterns and be vigilant.
Operational Efficiencies with Intelligent Analytics: The primary objective and usage of video surveillance is only
for security and threat prevention. However, analytics can help optimize surveillance systems for a variety of tasks
that are heavily dependent on other applications or human intervention. For example, intelligent parking systems can
help cameras guide vehicles to vacant spots and grant access automatically.
Marketing and Sales: Surveillance cameras can help observe and record consumer behaviour in and around their
spaces, and within and outside their line of sight. For example, in retail, analytics can help leverage this information in
positioning promotional displays and signage, product placement, advertisements, and the layout design of a store.
Frost & Sullivan
14
Axis Communications, a Swedish company, is the market leader here, with Panasonic
and Samsung also key global participants
Axis Communications
11,0%
Dahua10,5%
Hikvision9,0%
Panasonic8,1%
Sony7,0%
Cisco6,7%
Samsung Techwin6,5%
D Link6,3%
Honeywell6,1%
Bosch 5,7%
Pelco2,0%
Canon2,0%
*Others19.1%
Frost & Sullivan
All figures are rounded. The base year is 2015
IP Surveillance Camera Market: Market Share by Unit Shipment, Global, 2015
• Panasonic, as well as a wide range of stand-alone
products for the home, has created a Smart Home
Monitoring and Control Kit comprising a smart home
hub, door and window sensors, indoor IP camera
and smart plug. The main sales channel is through
retail, especially in specialist electronics stores.
• Panasonic also provides outdoor IP security
cameras, motion sensors and several other
solutions for the smart and connected homes.
• Samsung’s SmartThings is a complete suite of
products and services for intelligent living and smart
homes, with monitoring and security at the heart of
the offering.
• The SmartThings starter kit—based on the
Samsung home hub—brings together smart sensors
and pugs to enable the connecting and control of
multiple devices.
• The connected home value proposition is focused
on home monitoring, security, connected lighting,
home energy management and detection of home
emergencies (e.g., water leaks).
Others include Geovision, GE Security and Toshiba
15
France
(n=400)
Germany
(n=400)
Italy
(n=404)
Spain
(n=402)
UK
(n=401)
All doors and windows with intrusion
sensors
Alarm notification directly to police
Lighting vacation mode
Alarm notification through a mobile
application (e.g., SMS)
Video monitoring of entry doors
Video surveillance in each room with
motion detection against intrusion
Monitor your home to supervise your
children or pets in your absence
Overall, Italian and Spanish end-users perceive the greatest benefit from smart security
and monitoring solutions including IP surveillance
52%
47%
48%
45%
43%
37%
32%
64%
49%
58%
55%
46%
34%
30%
73%
69%
58%
65%
62%
57%
53%
67%
69%
64%
65%
63%
50%
52%
56%
50%
53%
47%
43%
40%
32%
Frost & Sullivan
Connected Security: VoC Survey—Preferences in Home Monitoring Features by
Country, Europe, 2015
Base: All respondents (n=2,007)Q.Which of the following capabilities to monitor your home would bring most value to you and your household?
16
Uptake of health & wellness solutions in the home is driven by a range of fundamental
underlying demand- and supply-side drivers
• Chronic diseases such as heart
disease, cancer, and diabetes
account for nearly 60% of all
deaths in the world, and as
much as 80% of deaths in
emerging countries.
• The cost and burden of
managing and treating chronic
diseases can be partially offset
by building a home healthcare
infrastructure.
• Home tests, home medical
devices, and telemedicine
market segments are expected
to benefit greatly.
• In almost every country, the
proportion of people over 60
years of age, is growing faster
than any other age group.
• This drastic demographic
change is viewed as the biggest
market driver for a large number
of healthcare market segments,
especially home healthcare.
• There is need for infrastructure
and services, to ensure better
quality of life and better
functional participation in the old
age.
• Costs associated with frequent
clinic visits, hospital admissions
and long-term therapies are on
the rise.
• Studies have shown that
home treatment and care cost
about one-sixth of the costs in
hospitals and nursing homes.
However, this market driver is
expected to be limited in its
impact considering the limited
reach of home healthcare.
• One of the emerging healthcare
trends is the concept of
personalized medicine or
tailoring service to suit
individuals needs.
• The concepts of telemedicine
and remote patient monitoring
are key segments that can serve
this Mega Trend. Furthermore,
home healthcare is a way of
personalizing care to patients.
Impact
Low Medium
High
Increasing Incidence of
Chronic Diseases Ageing Patient Population Rising Healthcare CostsNeed for Personalized,
Round-the-Clock Services
Short Term
(1-2 Years)
Medium Term
(3-4 Years)
Long-term
(5th Year)
Frost & Sullivan
17
Collaboration across the complex industry value chain and wider healthcare ecosystem
plays a critical role in designing new solutions
Patient
mHealth Health Information Technology (HIT)
Healthcare Ecosystem, United States, 2016
mHealth
Devices
mHealth
Apps
Tablets &
Smartphones
EMR/EHR
Vendors
HIE
PlatformsCloud
Analytics/
Big Data
Telehealth
Network
Operators
Network
Hardware
Data Transmission
WAN, Wireline, Internet
Payers
Private Government
What’s covered? Data Collection
Physicians/
ProvidersMedical
DevicesPharma
MedTech Vendors
Data Collection
What’s covered?
RegulatorsFTC HHSFDAFCC
CSGM, Frost & Sullivan
18
Key developments over the next three years will leverage new sensor technology and
include monitoring and diagnostic products
SensorsSmart
Phones
Remote monitoring lies at the interface of sensor
technology and smart phone. Robust market
growth of both these industries offers scope for
collaboration and innovation.
Sensors
BioNEMS,
Nanofluidics
Advances in enabling platforms like
nanofluidics and bio-nano-electro
mechanical systems (BioNEMS) opens
avenues for high throughput diagnosis,
portable and miniature diagnostic kits.
Enables the development of personal health
monitors that can continuously monitor vital signs.
This can also find great applications in
ambulances and other areas of care outside a
regulated professional environment.
Wireless
SensorsWireless sensors are one of the fastest growing technology
segments in the electronics industry. The non-contact nature of
these sensors present opportunities in areas of touchless vital-
signs monitoring for new-borns and patients with a propensity to be
uncooperative during monitoring. This will also be a foundational
technology platform in future hospitals and care centres.
Remote Patient Monitoring/mHealth
POC Diagnostic Kits
Contact-Free Vital Signs Monitoring
Smart Sensors
Wearable
Devices
Remote monitoring lies at the interface
of sensor technology and smart phones.
Robust market growth of both these
industries offers scope for collaboration
and innovation.
Advances in enabling platforms
such as nano-fluidics and bio-nano-
electro mechanical systems
(BioNEMS) open avenues for high
throughput diagnosis and portable
and miniature diagnostic kits.
Frost & Sullivan
Total Telehealth Market: Selected Technologies & Products, Europe, 2016-2020
19
• The home healthcare market breaks down into two main segments and refers to solutions which enable the delivery of
services (“telehealth”) or the management of conditions (“telecare”) at a distance
• Telehealth enables care providers to assess and diagnose patients remotely, recommend treatment, ePrescribe
medications, and closely monitor the patient’s medical condition from a remote location, so that changes in therapy or
medications can be suggested according to variations detected
• Telecare involves the continuous remote monitoring of patients and enables them to manage healthcare risks by tracking
lifestyle changes over time, and sending alerts to care providers about real-time emergencies
333,6324,8
165,8
76,3 62,7 59,1 61,4
412,9399,8
202,1
92,6 75,1 70,0 73,3
0
50
100
150
200
250
300
350
400
450
UK Germany France Italy Spain Scandinavia Benelux
Re
ve
nu
e (
$ M
illi
on
)Europe has begun to invest home healthcare through project trials and other research
programmes with Italy the fourth largest market
Frost & Sullivan
Total Telehealth and Telecare Market: Revenue by Country, Europe, 2015 and 2020
All figures are rounded. Base year = 2015
20
Italy snapshot
21
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
100.0
Telecare
2014
43.5
2015
44.6
2016
45.9
2017
47.3
2018
48.9
2019
50.6
2020
52.8
Telehealth 30.5 31.7 32.9 34.6 36.2 38.0 39.8
Re
ve
nu
e($
Mil
lio
n)
In Italy, the telehealth segment is valued at $31.7 million and telecare at $44.6 million
with growth rates of 4.7% and 3.4% CAGR (2015-2020) respectively
Frost & Sullivan
Year
Telehealth and Telecare Market: Revenue Forecast, Italy, 2014-2020
In Italy, many projects are in a pilot stage but successful commercial deployments are
expected over the forecast period
All figures are rounded. Base year = 2015
22
• The total market for telehealth and telecare in Italy is estimated to reach $92.6 million in 2020 from approximately $76.3 million in 2015, growing at a CAGR of 3.9% between 2015 and 2020.
• Italy has been investing in Integrated Personal Health and Social care services (IPHS) for promoting co-ordination between health and social care; this is expected to benefit the market for telehealth and telecare in the country.
• Several pilot projects are being carried out in telehealth and telecare and are funded by the national health system (Servicio Sanitario Nationale—SSN) and European Commission.
• Key pilot telecare projects that are mainstreamed and commercially available to limited users includethe Non Piu Soli project in Rome, San Ferdinando of Puglia project, Valli d’argento in Genoa district,and the E-Care project in Bologna and Ferrara.
• In telehealth, there are several pilot projects such as the Telesal project, pilot projects on telehealth within Firenze Telecare, Airtem project, Il cuore di Bari (Telecardiology project), Telecardiologia Anziani, and Orologio Assistivo ADAMO (assistive watchADAMO).
• These projects were initiated with the objective of having integrated care systems that enable care co-ordination between social care (care and support services) and healthcare services.
• TBS Group with its integrated solutions for eHealth and eGovernment has a strong market presence in Italy. In 2002, the company acquired TeSan, a specialised vendor for telemedicine and telecare solutions, thereby broadening its service offerings to telemedicine and teleassistance sectors.
• Cup2000 S.p.A, Medishare, Telecom Italia, Telbios, and Telemedware also have a significant market presence in the Italian telehealth and telecare space, especially through their association with significant pilot projects in the region.
The country has been investing in Integrated Personal Health and Social care services
for promoting co-ordination between health and social care …
Frost & Sullivan
23
Market
Maturity
• The adoption of mainstream telecare and telehealth services is steadily rising
(compared to other developed markets in Europe such as the United Kingdom and
Germany) and needs concerted effort to scale-up adoption across the country.
• In telecare, social alarms are mainstreamed to an extent, while other telecare services
are limited to experimental settings.
• In telehealth, there have been several regional pilot projects, but only a few have been
scaled into larger commercial deployments.
Market
Challenges
• The national health system of Italy—Servicio Sanitario Nationale (SSN)—is organised
at national, regional, (19 regions and 2 provinces) and local levels.
• Although public financing is carried out at the national level, there are provisions togenerate additional funding at the regional level, resulting in non-equity of servicesoffered in the country.
• In 2008, a financial law was introduced to fix the standard rates of care across the
country; however, this has not yet been implemented.
Insurance
System
• National health insurance is mandatory for all residents and covers 100% of the
population, giving little room for supplementary commercial insurance.
• As a result, private health insurance companies have a very limited role to play. Only 15% of the population have voluntarily opted for additional private insurance. About 80% of these private policies are purchased by individuals, while 20% is covered by employers.
… and the adoption of mainstream telecare and telehealth services is rising steadily
when compared to other developed markets such as Germany
Frost & Sullivan
24
Funding or
Insurance
Reimbursement
for Telehealth
and Telecare
• Long-term care in Italy receives lower public financing compared to other
countries in Europe. Patients eligible for long-term care either receive an
allowance from the National Pension Institute or the municipalities based on
their income level.
• Very few telehealth initiatives have been commercialised in the country. The
absence of an established reimbursement scenario for telehealth acts as an
impediment for the growth of these services in Italy. Most pilot projects have
been funded by SSN.
• In telecare, social alarms have high adoption rates compared to other
telecare services; however, regional adoption is fragmented due to non-
uniformity in pricing and reimbursement policies across the country.
• Social alarms cost approximately €15–€40 a month and patients are
charged or given free access based on their Indicator of Equivalent
Economic Status (ISEE) level.
• In the case of home health, only a few devices are categorised under
assisted IT solutions and are available free of charge based on the
prescription of the general practitioner; they are provided by SSN.
• However, this list of covered products is minimal and patients often need to
spend on an out-of-pocket basis, which may or may not be partially
reimbursed.
Nonetheless, challenges remain, with the absence of an established reimbursement
scenario for telehealth acting as a restraint to growth
Frost & Sullivan
25
Company Positioning Core Competencies
CUP 2000 Telecare• CUP 2000 S.p.A is a specialised provider of eHealth and remote monitoring
solutions in Italy. It was involved in an E-care project for the provision of telecare services in the province of Bologna and in the municipality of Ferrara in Italy.
MediShare Telehealth• The company is a specialised provider of teleconsultation solutions with a specific
focus on radiology and diagnostic imaging.
TBS GBTelehealth
Telecare
• It is a provider of integrated, chronic disease management services for a variety of conditions such as congestive heart failure, Chronic Obstructive Pulmonary Disease (COPD), diabetes, and asthma. The group offers telehealth and telecare services in 13 countries. It has a major market presence in Italy through the acquisition of TeSan; TBS GB now has a presence in 15 regions and a customer base of 43,000 users.
Telbios Telehealth
• Telbios is a leading provider of telemedicine in Italy and is involved in several key projects including Buongiorno CReG—a chronic disease management programme involving General Practitioners (GPs) in Bergamo, Como, and Milan. The company is also involved in several pilot and research projects in association with many municipalities and ministries including Telecardiologia Anziani, DDT, and Home Care.
Telecom Italia Telehealth
• The company is a leading telecommunications provider in Italy and focusses on eHealth and digital solutions for telemedicine through its Nuvola IT Home Doctor and Nuvola IT Digital Clinic product portfolio. The company is involved in several pilot projects for telehealth in Italy, including Telecardiologia Anziani.
Telemedware
Telehealth
Telecare
• The company is involved in the European DREAMING teleassistance-at- home project for the elderly. It has a presence in six European countries and is part of the Ambient Assisted Living (AAL) project. The company’s FacileCare platform facilitates the remote monitoring of elderly populations.
TBS Group via its integrated solutions for eHealth and eGovernment has a strong market
presence in Italy with others running pilot projects
Frost & Sullivan
Selected Italian players
26
Connected home solutions
Home automation
27
A home automation (HA) system is a centralised solution that controls two or more
home functions from remote locations
Product Definition
A home automation system is a centralised system
that controls and automates two or more home
functions from remote locations, thereby providing an
assisted and connected living environment to end
users.
Within this definition, Frost & Sullivan includes
hardware units and software applications that
intelligently control the devices (such as sensors, IP
cameras, dimmer units, etc.) that in turn automates
the home appliances (such as lamps, HVAC units,
window blinds, etc.) which are interfaced with those
devices.
The home automation eco-system is a combination of
both hardware and software products as shown in the
chart
Home Automation Products/Applications
Hardware
Home Measuring & Monitoring Devices
Home Controller Units/ Master Hubs
Plug and Play Devices
Software
Applications to Control and Automate Basic
Home Functions
Home Automation Systems Market: Definition and Segmentation, Europe, 2016
Frost & Sullivan
28
Drivers 1–2 Years 3–4 Years 5th Year
Widespread usage of wireless internet and cloud
services drives demand for IoT-enabled devices.H H H
Increasing penetration of IoT-enabled devices creates
huge business opportunities for market participants.M H H
Adoption of new business models by market participants
creates more accessibility to attract the mass-market
segment.
M H H
Easy installation and near-zero maintenance of stand-
alone devices drive demand among mass-market
customers.
M M H
Increasing growth of residential construction sector
drives demand for home automation systems.L M M
Impact Ratings: H = High, M = Medium, L = Low
The market has undergone major changes over the last couple of years driven by the
introduction of smart products and new business models
Frost & Sullivan
Home Automation Systems Market: Key Market Drivers, Europe, 2015-2019
29
Restraints 1–2 Years 2–4 Years 5th Year
High upfront cost of home automation systems poses great
challenge to distributors.H H M
Lack of interoperability of devices inhibits mass-market
adoption.H M M
Complex installation procedures for luxury home
automation systems affect customer purchase experience.M M L
Impact Ratings: H = High, M = Medium, L = Low
Nonetheless, a lack of device interoperability and complex installations continue to
inhibit adoption by the mass market
Frost & Sullivan
Home Automation Systems Market: Key Market Restraints, Europe, 2015-2019
30
0,0
50,0
100,0
150,0
200,0
250,0
0,0
100,0
200,0
300,0
400,0
500,0
600,0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue 238,7 245,3 259,8 278,2 302,6 334,1 374,9 427,5 495,5
Units 79,6 82,7 89,9 98,7 109,7 123,9 142,3 166,3 198,1
Un
its (
00
0)
Reve
nu
e (
$ M
illi
on
)
Year
Revenue CAGR, 2014-2019 = 12.2%, Unit Shipment CAGR, 2014-2019 = 14.9%
Between 2014 and 2019, revenue growth of 12.2% CAGR in Europe will be fueled by new
subscribers to create a market valued at $ 495.5 million
Frost & Sullivan
All figures are rounded. The base year is 2014
Home Automation Systems Market: Unit Shipment and Revenue Forecast,
Europe, 2011–2019
31
From a competitive perspective, the top end is concentrated and dominated by players
which serve the luxury segment
Crestron13.8%
AMX Harman
9.2%
Legrand8.0%
SchneiderElectric7.3%
Siemens 4.8%
Control44.0%
ABB3.9%
Others49.0%
Frost & Sullivan
Home Automation Systems Market: Percent
Revenue Breakdown,
Europe, 2014
All figures are rounded. The base year is 2014
• The HA market is concentrated at the top end,
which is dominated by the luxury segment
participants. The market is highly fragmented at the
bottom end, which is dominated by the mass-
market participants.
• At the top end, it is Crestron, AMX Harman,
Legrand, Schneider Electric,and Siemens which
hold 43.1% of the total market share. Important tier
2 participants include ABB, Hager, Control4, Delta
Dore, Niko, amongst others
• Currently, there are many participants operating
principally at a regional level such as Deutsche
Telekom, Fibar Group, Vimar and Visiomatic, which
are increasingly expanding to other European
countries, Such participants will have a great
opportunity in the next 5 years due to their mid-
range offerings to end users.
• Moreover, the luxury participants will adopt suitable
business models in the next couple of years to
compete with the mass-market participants for
combined growth.
32
Crestron, the US-based market leader, holds a 13.8% share, benefits from robust brand
recognition and is expanding into less exclusive markets
Company Strengths Weaknesses Opportunities Threats
Crestron Robust brand
recognition
Offers only high-end
HAS packages
Leveraging brand
name to expand in
less exclusive markets
Reduction in hardware
prices
AMX Harman Strong
technological
capability
Focuses only on
luxury homes
Partnership with other
technological
providers to promote
innovation in HAS
New and emerging
participants
Schneider
Electric
Established and
trusted brand
image
Inclined towards
enterprise buildings
Has comprehensive
offering in building
technologies which
will enhance its HAS
offering
Regular fall in prices
of HAS products
Control4 Ease of installation
with utmost
simplicity
Relatively new to the
European market
Partnership with
service providers will
help reach larger
customer base
Difficulty in
differentiating: There
are many competitors
who offer similar HAS
products
Frost & Sullivan
Home Automation Systems Market: SWOT Analysis, Europe, 2014
33
Moving forward, the adoption of a common communication framework based on
industry standard technologies will allow peer devices to interconnect and manage the
seamless flow of information, irrespective of service providers
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Basic home
automation and
control through stand-
alone devices
Interconnectivity of
home appliances and
devices through service
hubs
Cloud networking to enable
centralised services by
connecting devices to the
internet to operate
seamlessly
Connectivity of people,
data, and things through
robust technology to improve
the quality of life
2020
Frost & Sullivan
Home Automation Systems Market: Roadmap, Global, 2010–2020
Predictive diagnostics
and fault detection using
green data from homes
Usage of smart hubs
to connect devices and
communication services from
network service providers
Personalised analytics
based on consumer
behavioural patterns of
using home appliances
and other devices
Adoption of common
communication framework which
will allow peer devices to
interconnect and manage
seamless flow of information
34
Italy snapshot
35
Italy will remain the fifth largest HA market in Europe through the forecast period behind
the UK, Germany, France and Benelux
Year
The
United
Kingdom
($ Million)
Germany
($ Million)
France
($ Million)
Italy
($ Million)
Spain
($ Million)
Poland
($ Million)
Scandinavia
($ Million)
Benelux
($ Million)
Rest of
Europe
($ Million)
2011 31.2 43.8 35.0 27.7 19.0 10.8 20.4 33.9 17.0
2012 32.9 45.6 36.2 27.3 18.9 11.3 20.9 35.0 17.3
2013 35.8 49.6 38.3 27.7 19.2 12.2 21.6 37.5 17.8
2014 39.3 54.3 41.1 28.4 20.2 13.2 22.5 40.4 18.7
2015 44.2 60.2 44.8 29.4 21.6 14.5 23.9 44.1 20.0
2016 50.2 68.1 49.3 30.7 23.4 16.2 25.7 48.9 21.6
2017 58.2 78.2 54.9 32.6 25.7 18.3 28.1 55.2 23.7
2018 68.6 91.4 61.9 35.1 28.6 21.1 31.2 63.4 26.3
2019 82.4 108.2 70.8 38.3 32.2 24.7 35.1 74.1 29.6
CAGR
(%)15.9 14.8 11.5 6.2 8 13.3 9.3 12.9 9.6
Frost & Sullivan
Home Automation Systems Market: Revenue Forecast by Region, Europe, 2011–2019
All figures are rounded. The base year is 2014
36
The luxury segment, where the focus is on providing target high-end customers with
comfort and entertainment, will enjoy modest growth
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
18,0
20,0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue 12,9 12,8 13,1 13,4 13,9 14,5 15,3 16,4 17,8
Units 0,6 0,6 0,7 0,7 0,8 0,9 1,0 1,1 1,3
Un
its
(0
00
)
Reve
nu
e (
$ M
illi
on
)
Year
Revenue CAGR, 2014-2019 = 5.9%, Unit Shipment CAGR, 2014-2019 = 12.1%
Frost & Sullivan
Home Automation Systems Market: Luxury Segment: Unit Shipment and Revenue Forecast, Italy,
2011–2019
All figures are rounded. The base year is 2014
37
The mass-market segment will benefit from greater exposure in retail stores and online
distribution channels in the next 5 years
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
0,0
5,0
10,0
15,0
20,0
25,0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue 14,7 14,4 14,6 15,0 15,5 16,2 17,2 18,6 20,5
Units 6,6 6,7 7,3 7,8 8,6 9,5 10,8 12,6 14,7
Un
its
(0
00
)
Reve
nu
e (
$ M
illi
on
)
Year
Revenue CAGR, 2014-2019 = 6.4%, Unit Shipment CAGR, 2014-2019 = 13.4%
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Frost & Sullivan
Home Automation Systems Market: Mass-market Segment: Unit Shipment and Revenue Forecast,
Italy, 2011–2019
All figures are rounded. The base year is 2014
38
From a competitive standpoint, the Italian player Vimar holds a strong position and
offers a comprehensive solution that is capable of managing climate control, security,
window treatments and lighting
CompanyRevenue
($ Million)
Tier I
Vimar
Crestron
AMX
Harman
Schneider
Electric
Siemens
8.8
Tier II
ABB
Jung
Legrand
Hager
2.6
Others 2.0
Total 13.4
CompanyRevenue
($ Million)
Tier I
Vimar
Nice Group
Legrand
Schneider
Electric
Siemens
ABB
6.0
Tier II
Gira
Ilevia
Jung
Hager
5.1
Others 3.9
Total 15.0
Luxury Segment Mass-market Segment
Frost & Sullivan
Home Automation Systems Market: Percent
Revenue Breakdown,
Italy, 2014
• Tier I competitors in the luxury segment hold a
65.8% share which translates into revenue of $8.8
million. In the mass market segment, tier I
competitors hold 40.2% in the mass-market
segment with a revenue of $6.0 million
• Regional and global participants like Vimar,
Crestron, and AMX Harman hold the largest share
in the tier I category of luxury segment. Similarly,
Vimar, Nice Group, Legrand, and Schneider
Electric hold the highest share in the tier I category
of mass-market segment.
• Vimar offers a comprehensive solution that is
capable of managing climate control, security,
window treatments, and lighting. It focuses on
integration between devices that operate on KNX
international standard and allow interoperability of
functions.
• Nice Group offers simple and practical home
automation solutions like managing window blinds,
garage doors, alarm systems, and control systems.
All figures are rounded. The base year is 2014
39
IoT solutions for buildings
40
IoT is a game-changing opportunity for buildings, enabling industry participants to
provide integrated Building Automation Systems which maximize operational efficiency,
enhance innovation and offer remote services
IoT
Ecosystem
Ability to Intercommunicate Provision for Remote Control
Ability to Measure Vital
Parameters
Unique Identity for Each
Device
IoT is the interconnection of uniquely
identifiable embedded devices within the
existing Internet infrastructure to deliver
optimum solutions using information
collected from the devices or objects.
Features of an IoT Ecosystem:
• A unique digital identity is given to
each device or object so that it can
be located within the Internet and
referred to whenever necessary.
• Building Automation Systems (BAS)
are equipped with simple and
effective communication devices for
two-way interaction.
• BAS is equipped with necessary
measuring devices for seamless
monitoring.
• The user is provided with a device to
control the BAS remotely.
IoT in Smart Buildings: Features of an IoT
Ecosystem, Global, 2015
Frost & Sullivan
41
A focus on the efficient performance of commercial buildings has increased demand for
centralisation and greater connectivity between ‘things’ and people
Drivers Description
Demand for
Centralisation in
Corporate
Environments
Focus on the efficient performance of commercial buildings has increased demand for centralised
computing and global connectivity between ‘things’ and people. Centralisation provides enhanced
operational efficiency, improved data privacy, and more security compared to decentralised systems.
IoT provides companies that are planning to restructure their operations with an ideal platform to
provide greater value to both employees and customers.
Emergence of
Next-generation
IT Solutions
IoT, Big Data, data analytics, and cloud networking are next-generation technologies expected to
satisfy the technical demands of the smart ecosystem in the next 5 to 10 years. Growth of such
technologies will help the smart buildings market to increase at an accelerated pace.
Miniaturisation of
Devices
Connecting everything to the Internet requires the presence of miniaturised devices in both residential
and non-residential buildings. Revolutionary technologies such as Micro Electro Mechanical Systems
(MEMS) and nanotechnology are expected to play a vital role in developing the smart buildings
market.
Demand for
Connected Work
Environment
In the future, there will be seamless integration between enterprise communication, mobile functions,
and Web-based collaboration services to enhance operational efficiency in the work environment. By
2020, unified communications, remote working, and social networking are expected to have
accelerated growth and improve transparency, collaboration, and virtualisation in business processes.
Convergence of
ICT and BT
Industries
Global connectivity has produced convergence in the ICT and BT industries, which demands the
usage of next-generation solutions that will define and shape the future of the smart buildings market.
Frost & Sullivan
IoT in Smart Buildings: Key Drivers Explained, Global, Beyond 2015
42
Nonetheless, high initial investment costs and a lack of investor conviction on returns
acts as a continuing break to more rapid and widespread adoption
Frost & Sullivan
Drivers Description
High Investment
Costs
Initial investment is a key factor in smart ecosystems, as it involves many intelligent devices and
solutions. Scalability of hardware and low-cost value propositions are expected to play a significant
role in determining the course of the market in the next 5 to 10 years.
Data Security and
Privacy Issues
Internet security and privacy issues are important concerns of early adopters in the smart buildings
market. To manage these concerns, integrated solution providers will have to give more precedence
to security and privacy when offering cyber-physical applications to customers.
Lack of Investor
Conviction About
RoI from Smart
Buildings
Smart buildings require significant capital investment to implement key features that would bring in
large returns and value to building owners. However, investors are still unsure about potential RoI.
Therefore, it is necessary for market participants to eliminate the financial risk factor through pilot
projects that illustrate the smart buildings concept and the potential returns involved.
Complexity in
Disruptive
Technologies
Disruptive technologies in both ICT and BT industries are capable of creating complexities while
implementing smart building solutions. Hence, participants in this space are expected to offer a
simple and comprehensive solution to end users.
IoT in Smart Buildings: Key Restraints Explained, Global, Beyond 2015
43
In North America alone, Frost & Sullivan expects the IoT enabled smart buildings market
to be valued at over $44.8 billion by 2020
0
1
2
3
4
5
6
7
2015 2020
Re
ve
nu
e (
$ B
illio
n)
0
5
10
15
20
25
30
35
40
45
50
2015 2020R
eve
nu
e (
$ B
illio
n)
Smart Buildings Market,
North America, 2015IoT Enabled Smart Buildings Market,
North America, 2015
SensorsBuilding-level
controllers
Application
software
80.3% 17.2% 2.6%
$2.99 B $19.22 B
BAS Hardware
and Enablement
Hardware
Network
Communication
Services
IoT Data
Services
68.0% 17.0% 15.0%
$ 5.74B
$44.81B
CAGR
13.9%
CAGR
18.4 %
Percent Revenue Share by Product Percent Revenue Share by Product
Frost & Sullivan
All figures are rounded. The base year is 2015
44
For industry participants, the IoT will require a rethink of the established value chain and
the adoption of new business models
BEMS: Building Energy Management SystemsBAS: Building Automation SystemsIGRS: Intelligent Grouping and Resource SharingOS: Operating System
System and Device
Suppliers
Technology and Platform
Providers
Network Providers
BEMS and BAS
Cloud
Networking, Big
Data Analytics,
OS, ZigBee, Wi-
Fi, IGRS, KNX,
and Modbus
Cable Operators
and
Communication
Providers
IoT Enabled Smart Buildings Market: Value Chain,
Global, 2016
A
B
C
IoT Enabled Smart Buildings Market :
New Business Models, Global, 2016
Single-product Approach Model
Bundled Service Model
The bundled service model is a hybrid solution that
constitutes three different service providers: A, B,
and C. Having strategic technology-based
partnerships with suppliers to provide flexible,
scalable, and efficient solutions to customers will
prove beneficial in the future.
The bilateral approach is a two-way partnership
between either A and B, B and C, or A and C. This
model can offer solutions for hardware, network
services, platform-based services, and installation
and maintenance at discounted prices.
Single-product and or multi-service providers can
enhance their value proposition by adding
functionalities that support the features of smart
buildings. Furthermore, this will increase the
probability of the company getting noticed by a key
market participant seeking a bilateral partnership.
Bilateral Service Model
45
IoT Value proposition
Sm
art
an
d C
on
ne
cte
d M
ark
ets
Sm
art
Ho
me
sS
ma
rt B
uil
din
gs
Sm
art
Cit
ies
HCL
Deutsche
Telekom
Apple
Cisco
IBM
Independent Integrated
Dell
Microsoft
AT&TQualcomm
Samsung
Siemens
Honeywell
ABBBosch
Key participants list is not exhaustive
Schneider
Electric
Intel
Deutsche
Telekom
Frost & Sullivan
Intel for example is the market leader and has partnerships with Accenture, Booz Allen
Hamilton, Capgemini, Dell, SAP and Tata
Key Participants in Smart and Connected Solutions, Global, 2015
46
Microsoft is also a leading player with a service which allows customers to improve the
operational efficiency of their buildings through asset monitoring
Company Value Proposition
Microsoft, being a leader in the enterprise space, has developed Microsoft Azure IoT services, with
which customers can improve the operational efficiency of their buildings through asset monitoring
and enable innovation through the use of advanced data analytics.
Dell recently opened its first IoT lab, a collaborative facility for hardware and software developers to
build and release IoT products. It is also one of the founding members of the Open Internet
Consortium (OIC) alliance that intends to deliver a common communication framework based on
industry standard technologies.
AT&T offers its M2X solution, a cloud-based, fully managed time-series data storage service for
network-connected M2M devices and the IoT. M2X is capable of storing time-series sensor data from
connected devices, assuring security of data, managing unlimited devices, and providing shared
access to device data. AT&T’s M2X solution is used in commercial spaces, such as smart homes and
smart city applications.
Frost & Sullivan
IoT Participants’ Value Proposition, Global, 2015
Selected market participants
47
Siemens and Honeywell are at earlier stages of developing their IoT solutions but are
both active members of the Open Internet Consortium alliance
Company Value Proposition
Siemens, being a building technology leader, is in the early stage of adopting IoT in its array of
solutions in the building technology (BT) industry. It is focusing on implementing a data-centric
approach model through unified, IP/Web-based communication for the integration and control of
complex distributed systems such as smart grids. In addition to this, Siemens is also a member in the
OIC alliance, which intends to deliver a common communication framework for peer device
interconnectivity.
Honeywell, being a dynamic participant in both home automation and building automations markets,
is in the very early stage of utilizing IoT capabilities for its building solutions. However, there are some
initial activities related to IoT in Honeywell which are evident from its alliance with OIC.
Schneider Electric is working to bridge the gap between information technology and operational
technology by adopting its own IoT platform in its BT value proposition. It has also partnered with
Cisco to transfer the date of the building or home to an analytics platform over an IP network, which
is already offered by Cisco.
Frost & Sullivan
IoT Participants’ Value Proposition, Global, 2015
Selected market participants
48
The transformation of IoT beyond 2016 will depend on innovations in data security as
well as data privacy and device interoperability
Sensor-based connectivity for cloud platforms
Advanced analytics engine for real-time performance monitoring
Remote accessibility and full control of IoT devices for decision making; Integration of gateways to facilitate two-way communication with the cloud
Secured data sharing; compliance to common standards
Fog Computing to enable edge analytics in building
Support of diversified and interoperable devices
Mainstream of enabling Fog and Cloud interplay
Valu
e P
rop
osit
ion
Year of Transformation
2015 2016 2017 2018 2019 2020
Strong dependence on diffusion of
innovation in communication devices
Initial phase of IoT with strong support from
innovators and early adopters
IoT device interconnectivity and cloud interconnectivity of various business sectors
IoT Enabled Smart Buildings Market, Global, 2015-2020
Frost & Sullivan
49
Energy management systems
50
The energy management market segments into home and building systems and, below
this, into a range of hardware products and software applications
Energy Management
Systems (EMS)
Home Energy Management
Systems (HEMS)
Hardware Products
Home Energy Gateways/Con
trollers
In-house Display Units
(IHDs)
Software Applications
Energy Dashboards
Building Energy
Management Systems (BEMS)
Hardware Products
Controllers/ Gateways
Software Applications
Energy Optimization
Software
Frost & Sullivan
51
High energy prices drive the demand for EMS on the utility and end-user side
Drivers 1–2 Years 3–4 Years 5th Year
High energy prices drive the demand for EMS on the utility
and end-user sideH H H
EU directives drive the demand for installation of HEMS
and BEMS to achieve energy efficiency targets of member
states
M H H
Emergence of next-generation IT solutions helps
consumers gain insights on energy consumption data
through HEMS and BEMS devices
M H H
Financiers’ conviction on sustainable buildings has
improved the penetration of EMS into commercial marketsM M H
Growth of the energy services market drives the demand
for HEMS and BEMS products in the building technologies
sector
M M H
Demand for sophistication of EMS would improve the
analysing and controlling capability for high value buildingsL M H
Impact Ratings: H = High, M = Medium, L = Low
Frost & Sullivan
Total HEMS and BEMS Market: Key Market Drivers, Europe, 2015–2019
52
The presence of a number of EU Directives is also key to continued adoption
• Energy management standard EN 16001 defines a clear objective on targets in very systematic
processes and procedures. Features include operational controls, measuring and monitoring of energy
consumption, and regular reviews of performance. The standard helps consumers achieve the
required energy reductions by spotting the trends in energy consumption and the deviation from
baseline norms based on the information gathered from the HEMS and BEMS.
• 20-20-20 targets represent an ambitious approach by the European Union to combat climate change
and aim to ensure that Europe becomes a highly energy-efficient and low-carbon economy by 2020.
• The EU’s obligation on each member state to set an indicative national energy-efficiency target for
2020 and achieve a certain amount of final energy savings over the obligation period will drive energy
efficiency improvements in households and industries.
• The EU’s commitment towards the improvement of Nearly Zero Energy Buildings has enabled
the buildings sector to take full advantage of the scheme by focusing more on implementing energy-
efficient systems such as HEMS and BEMS.
• The EU’s Energy Performance of Buildings Directive obligation on member states to establish
minimum energy conservation measures would make them avail energy performance certificates. The
resale value of sustainable buildings is relatively higher compared to the normal buildings and,
therefore, the economic factor would urge consumers to install HEMS and BEMS in their homes and
buildings.
Frost & Sullivan
53
High initial investment hampers the penetration of EMS in small organisations
Frost & Sullivan
Total HEMS and BEMS Market: Key Market Restraints, Europe, 2015–2019
Restraints 1–2 Years 3–4 Years 5th Year
High initial investment hampers the penetration of EMS in
small organizationsH M M
Limited financial incentives affect BEMS and HEMS
market growth due to repercussions of the economic
recessionH M L
Restricted expenditure in the current business
environment has restrained consumers from investing in
HEMS and BEMS devicesM M L
Lack of knowledge about the functionality of EMS affects
the total HEMS and BEMS market due to insufficient
awareness by governmental agenciesM M L
Consumer disengagement affects the HEMS and BEMS
market due to the lack of awareness about climate changeM L L
Impact Ratings: H = High, M = Medium, L = Low
54
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
0,0
200,0
400,0
600,0
800,0
1.000,0
1.200,0
1.400,0
1.600,0
1.800,0
2.000,0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue 899,9 946,7 1.014,1 1.089,2 1.173,0 1.269,3 1.399,0 1.573,2 1.805,1
Growth Rate 5,2 7,1 7,4 7,7 8,2 10,2 12,4 14,7
Gro
wth
Ra
te (
%)
Reve
nu
e (
$ M
illi
on
)
Year
Over the next 5 years, the combined HEMS and BEMS market is expected to reach $1,81
billion, growing at a CAGR of 10.6% from 2014 through to 2019
Frost & Sullivan
Total HEMS and BEMS Market: Revenue Forecast, Europe, 2011–2019
CAGR (2014–2019) = 10.6%
All figures are rounded. The base year is 2014
55
Single dwelling units drive demand on the home side whilst commercial applications
dominate the building segment
Single Dwelling
Unit (SDU)68,0%
Multi-dwelling
Unit (MDU)32,0%
Commercial46.3%
Industries20,0%
Education16,2%
Others17.5%
HEMS Market: Per Cent Revenue Breakdown
by Application, Europe, 2014BEMS Market: Per Cent Revenue Breakdown by
Application, Europe, 2014
Frost & Sullivan
All figures are rounded. The base year is 2014
Others includes public sector buildings, healthcare, and infrastructureCommercial includes office, retail, and hospitality industries
56
The competitive set is quite distinct with AlertMe growing its share on the HEMS side,
generating $33.9m in 2014
BEMS HEMS
Company
Revenue
($ Million) Company
Revenue
($ Million)
Schneider
Electric
183.5
(20.5%)AlertMe
33.9
(17.5%)
Siemens179.7
(20.1%)
Green Wave
Reality
26.6
(13.7%)
Honeywell171.9
(19.2%)
Green Energy
Options
25.4
(13.1%)
Johnson
Controls
162.0
(18.1%)Tendril
21.7
(11.2%)
Tier II 147.0
Others 86.3
Others 51.1
Total 895.2 Total 193.9
BEMS
The top 4 companies in the BEMS market held a
combined share of 77.9% with a revenue contribution
of $697.1 million in 2014. Schneider Electric’s
SmartStruxure Lite solution for small- and medium-
sized buildings with immediate energy savings and
uncompromised comfort helped it to lead the market
in 2014 with a revenue of $183.5 million. Siemens’
cloud-based data management platform, Advantage
Navigator, enables end users to optimise the
performance of buildings. The insightful and intuitive
solution helped Siemens achieve a revenue of $179.7
million in 2014.
HEMS
The top 4 companies in the HEMS market accounted
for 55.5% of the market with a revenue contribution of
$107.6 million in 2014. AlertMe’s energy management
solution along with its cloud application and analytics
made it grow aggressively with a share of 17.5% and
revenue of $33.9 million in 2014. Green Wave Reality,
Green Energy Options, and Tendril had a share of
13.7%, 13.1%, and 11.2%, respectively.
Total HEMS and BEMS Market: Company
Market Share Analysis of Top 4 Participants,
Europe, 2014
Frost & Sullivan
All figures are rounded. The base year is 2014
57
IBMSAP
IBM Maximo
HEMS,
BEMS, and
FEMS
Asset
Management
Software
Building
AutomationData Analytics
Cloud
Services
Building
Energy
Management
Controls and
Devices
Micro-generation
& Renewable
Energy
Demand
Response
Communication
and M2M
Smart
MeteringFacility
Management/
Performance
Contracting
Competition in EMS will intensify however as facility management (FM) and utility
companies compete with energy service companies (ESCOs), building automation (BA)
vendors to offer a turnkey service business
Frost & Sullivan
58
FM/ESCO BA
Typical EMS Offerings
• Metering and BA systems
• Energy supply
Strengths
• Consulting services
• Typically large and financially strong
Weaknesses
• Distant relationships with end users
• Manufacturers have manufacturing rather than
service business model heritage
• Energy suppliers offer a biased service
Typical EMS Offerings
• Lighting services
• Heating Ventilation Air-conditioning (HVAC)
Strengths
• Large existing customer base
• Strong service business model
Weaknesses
• Lack of data management and benchmarking
capabilities
• Focus on HVAC and lighting as the main energy
saving aspects
Each participant offers a different proposition with strengths and weaknesses
Frost & Sullivan
Selected market participants
59
From a technology point of view, real-time BEM is becoming a reality due to advances in
software control and cloud solutions
• As the automation and control of building parameters forms the core of energy management in buildings,
the advent of controllers with embedded software which make intuitive decisions, combined with
information directed from hosted cloud servers (and transferred through networks or network gateways),
will enable the optimisation of real-time BEM solutions
• Parameters collected in premise (such as air purity, temperature level, humidity level and illuminance
levels) from door and window sensors, HVAC and lighting systems, will be compared with external
parameters obtained from cloud systems such as the weather forecast, day-light level, and geographic
location of buildings
• The real-time optimisation of energy management in buildings will help building personnel to make
informed decisions, analyse consumption patterns, lower their operational expenditure and help buildings’
users by assisting them with their overall building efficiency
• Schneider Electric, Siemens, Honeywell, Building IQ, and Johnson Controls are the key building
technology firms driving real-time energy management. Amazon Web Services, IBM, Microsoft, Cisco, and
AT&T are among the technology, network, and cloud-based service providers which will play a pivotal role
in the software embedded control and cloud solutions space
• Educational buildings, office buildings, and public buildings are the current key growth sectors that will
adopt software embedded control and cloud solutions. Building owners, occupants, and energy managers
will reap the benefits of this impact
• North America, Europe, and Asia-Pacific are the key regions driving this trend
60
This will increasingly allow smartphone-savvy and energy-conscious end users to
manage devices through mobile apps
• The transformational trends toward software embedded control and cloud solutions will enable building
users to control energy consuming devices in buildings through their mobile devices
• Eventually, when all energy consuming devices are controlled via apps, BEM solutions will become
tailored to users’ personal needs
• Frost & Sullivan believes that, while technology has the potential to eventually make switches redundant,
users’ preference for manual and visible switches will remain strong for many years yet
• Dynamic new entrants offering IoT solutions, data analytics-based hardware, software, and control
apps for mobile devices will shift accelerate the shift
• Tier-1 participants are also expected to respond accordingly which will further accelerate the
replacement of the BEM management layer with software apps
• Building occupants who are smartphone-savvy and energy-conscious will be the prime end users adopting
software embedded controllers and cloud solutions across all BEM solutions markets
61
Energy management systems
Italy snapshot
62
Frost & Sullivan considers Italy, which is leading many countries in terms of smart meter
rollout, as a high potential market for EMS
Year
UK
($ Million)
Germany
($ Million)
France
($ Million)
Italy
($ Million)
Spain
($ Million)
Poland
($ Million)
Scandinavia
($ Million)
Benelux
($ Million)
Rest of
Europe
($ Million)
2011 147.6 164.2 114.5 91.7 73.9 52.1 114.7 99.5 41.7
2012 156.8 172.6 120.1 96.0 77.3 54.3 121.3 104.7 43.7
2013 172.1 185.7 128.8 101.4 81.8 57.0 130.1 111.1 46.1
2014 189.9 200.2 138.4 106.1 86.4 60.1 140.9 118.4 48.8
2015 210.3 216.1 149.2 111.2 91.4 63.6 153.1 126.3 51.7
2016 234.2 234.2 161.5 117.2 97.0 67.7 167.0 135.5 55.0
2017 267.0 259.5 178.4 124.5 104.1 73.0 185.7 147.8 59.0
2018 312.0 292.3 202.8 133.4 112.9 80.8 210.5 164.5 64.0
2019 373.5 334.5 236.4 144.8 123.9 91.7 243.0 187.4 70.0
CAGR
(%)14.5 10.8 11.2 6.4 7.5 8.8 11.5 9.6 7.5
Frost & Sullivan
All figures are rounded. The base year is 2014
Total HEMS and BEMS Market: Revenue Forecast by Region, Europe, 2011–2019
63
The development of new flexible network management will attract HEMS suppliers to
enter the market which will assist growth during the forecast period
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue 17,2 18,5 19,9 21,0 22,2 23,4 25,0 26,8 29,1
Growth Rate 7,5 7,7 5,5 5,6 5,8 6,5 7,5 8,6
Gro
wth
Rate
(%
)
Reve
nu
e (
$ M
illi
on
)
Year
Frost & Sullivan
HEMS Market: Revenue Forecast, Italy, 2011–2019
CAGR (2014–2019) = 6.8%
All figures are rounded. The base year is 2014
64
Energy-efficient renovations and the EU EPBD framework are expected to be the key
drivers of expansion in the BEM segment
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue 74,6 77,5 81,5 85,2 89,1 93,7 99,5 106,6 115,7
Growth Rate 4,0 5,1 4,5 4,6 5,2 6,2 7,1 8,5
Gro
wth
Ra
te (
%)
Reve
nu
e (
$ M
illi
on
)
Year
Frost & Sullivan
All figures are rounded. The base year is 2014
BEMS Market: Revenue Forecast, Italy, 2011–2019
CAGR (2014–2019) = 6.3%
65
From a competitive standpoint, the market is concentrated with a strong presence from
the global leaders in HEMS, for example Siemens and AlertMe
BEMS
The top 4 companies in the BEMS market
accounted for a share of 75.8% with a revenue
contribution of $64.6 million in 2014. Honeywell led
marginally with its attractive cloud-based platform
Attune Advisory Services that enables Enterprise
Building Integrator. Tier-II companies and the others
category held market shares of 18.2% and 6.0%,
respectively.
HEMS
The top 4 companies in the HEMS market held a
share of 54.5% with a revenue contribution of $11.4
million. AlertMe led the competition in this market,
followed by Green Wave Reality, Green Energy
Options, and Tendril. The ‘Others’ category
companies such as Opower, ONZO, Efergy, SME
and Smappee held a majority of the market as of
2014. Their revenue contribution was estimated to
be $9.6 million in 2014. Partnership with Italy’s
largest distributor ENEL would work in favour of
HEMS suppliers, as it gives access to a huge
number of customers through a reliable partner.
BEMS HEMS
Company
Revenue
($ Million) Company
Revenue
($ Million)
Tier I
Siemens;
Schneider
Electric;
Honeywell;
Johnson
64.6
Tier I
AlertMe; Green
Energy
Options; Green
Wave Reality;
Tendril
11.4
Tier II
EnerNOC;
Elster
Energy
15.5 Others
Opoer; ONZO;
Efergy; SME;
Smappee
9.6
Others 5.1
Total 85.2 Total 21.0
Frost & Sullivan
Total HEMS and BEMS Market: Company
Market Share Analysis of Top 4 Participants,
Italy, 2014
All figures are rounded. The base year is 2014
66
Appendices
67
Principal abbreviations
B Billion HIT Health Information Technology
BA Building Automation ICT Information & Communication Technologies
BAS Building Automation System IGRS Intelligent Grouping and Resource Sharing
BEMS Building Energy Management Systems IHD In-house Display Unit
BioNEM Bio-nano-electro mechanical system IoT Internet of Things
BT Building Technologies IP Internet Protocol
CAGR Compound Average Growth Rate LED Light-emitting Diode
CO Carbonous oxide (carbon dioxide) M Million
EEG Electroencephalogram M2M Machine to Machine
EM Energy Management MDU Multi-dwelling Unit
EMS Energy Management Systems MEMS Micro Electro Mechanical Systems
EPBD Energy Performance of Buildings Directive OIC Open Internet Consortium
ESCO Energy Service Company OS Operating System
EU European Union POC Point Of Care
FM Facilities Management R&D Research & Development
HA Home Automation SDU Single-dwelling Unit
HAS Home Automation System SMS Short Message Service
HEMS Home Energy Management Systems UK United Kingdom
HVAC Heating Ventilation Air-conditioning VoC Voice of the Customer
68
Frost & Sullivan contacts
John DaviesSenior Consultant
Business & Financial Services
Tel +33 1 42 81 21 01
Livio VaninettiDirector
Italy
Tel +39 02 4851 6135
Luca RaffelliniHead
Business & Financial Services
Tel +44 20 7343 8384
69
Frost & Sullivanwww.frost.com
December 2016
