#5 – Smart buildings kicking in doors

Already with a foot (and fiber) in the door, many operators have turned to smart buildings and homes as a promising vertical to offer connectivity and smart services beyond their existing offerings. Despite digitalization slowly entering the building, real estate, and construction space, those companies have historically been conservative in their adoption of technology backed up by comfortable margins – until 2020 and CoVid-19. With the new age of working and an increased focus on employee health, real estate owners and commercial tenants are forced to reinvent their business models and standards. Commercial tenants are becoming more competitive in their race for hiring the best talents and are turning to complex IoT solutions to get ahead. Real estate companies in turn want to meet their tenants’ needs and are turning to holistic platform approaches for managing their digital infrastructure. Solution providers – CSPs, system integrators, OEMs and hyperscalers – are noticing this big opportunity and have started to develop the end-to-end solutions that will kick in the doors for smart buildings in 2021.

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Buildings have been becoming smarter for decades – first through modern building management systems (BMS), then through data collection on the building environment and eventually through data analytics. Advances in building smartness have been driven by both the demand for better solutions from real estate companies and commercial tenants as well as by the technological and ecosystem maturity.  

Commercial tenants, i.e., renting enterprises, have in the past been looking to provide the next level of office experience to their employees as competition for talent is becoming fiercer. This next level is an office that promotes productivity, health and wellbeingSimilarly, real estate companies have been looking to adapt to tenant needs by slowly expanding their services through specific solutions. However, the demand to provide state-of the-art solutions has not been commonplace and the ecosystem has not been particularly mature when it comes to collaboration. A better level of service and smarter buildings can only be enabled if different BMSs are able to talk to each other and this requires both the willingness to pay for those solutions (urgency) and the ecosystem maturity to collaborate and provide complex end-to-end solutions at affordable rates.  

The recent pandemic, however, has changed these dynamics. 1/3 of global employees has shifted to remote working and about half of all employees are planning to work more from home in the futureAs office spaces stand empty and are poised to be less utilized in the future, real estate companies must pivot their business model while commercial tenants need to reconsider how to design and utilize the ample space. Both types of players are hence pushing for a better understanding of the functionality of their buildings as well as of how the different building users are making use of the space and are turning to smart building technology to provide those insights. For example, Telia Finland this year deployed IoT solutions with a 5G network in the shopping mall of Tripla to measure people flow and air qualityThe insights gained from the collected data are then used to long-term improve building design and shopping experience.  

At the same time, the pandemic has put employee health and wellbeing at the center stage. Employers are looking to raise the wellbeing standard inside their buildings while making sure that employees feel comfortable and well when working at the office. The combination of different solutions that enable such a smart building today make up a landscape of different services and technologies with certain navigational challenges, e.g., how to handle the connectivity landscape, how to enable communication between building systems, and how to make sure that the data extracted from the building turns into value. 

To address these challenges, system integrators, CSPs, cloud providers and OEMs come into playDifferent players along the value chain are entering into non-conventional collaborations to provide end-to-end solutions to enterprise customers. In the wake of the pandemic Microsoft has launched its Azure Digital Twin – a feature to accelerate the visualization of physical infrastructure. In December 2020Johnson Controls announced its collaboration with Microsoft on the digital platform. Johnson, one of the biggest OEMs for building management systems, will integrate their IoT platform into Azure’s digital twin. This type of holistic integration of digital twin solutions will make it much easier for building managers to manage physical spaces digitally. 

As commercial tenants are facing increasing pressure to provide a higher standard of workplaces, real estate companies are gearing up. The traditionally siloed ecosystem has laid the groundwork in 2020 through cross-industry dialogues and will be in the starting blocks to provide complex smart buildings solutions to tenants and landlords in 2021.  

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