Navigant Research Blog

Managed Services Spearhead Smart Building Technology

— December 3, 2012

Integrating new IT platforms like building energy management systems (BEMS) poses a challenge for many corporations and organizations with large building footprints. Although firms may see the potential benefit in using these systems to reduce energy costs and increase operational visibility, many lack the internal resources and capacity to make use of them.

Some firms have staff skilled in enterprise IT and facility management, but busy schedules may prevent them from being able to take the time to log into and use a BEMS. Other firms may have deeply entrenched ways of monitoring operations and managing facilities that discourage them from considering new technology. The responsibilities for managing energy, operations, and facility management are often split across many job functions, business units, and control systems, making it difficult to pinpoint who would use (and pay for) an integrated energy management system.

Given this pervasive reality, many BEMS vendors are beginning to offer managed services platforms for customers that do not have the time or resources to operate a BEMS. In essence, these software developers “loan” energy and operations managers to their customers. These managers gain access to a company’s energy-related data (utility bills, building management systems, and so on) and either make decisions autonomously or offer recommendations to key decision-makers within the company.

From a software vendor perspective, offering smart building managed services may require a considerably different approach from selling software licenses. There are three main components in a smart building managed service offering:

  • Cloud-based software-as-a-service (SaaS)
  • Network operations center (NOC)
  • Installation and facility maintenance services

Of these, the one that departs most dramatically from the traditional software model is the network operations center. In establishing an NOC, software firms will need to hire new employees who can both operate the software and interact with the client. These energy consultants need to have skills beyond basic software customer service; they must play a proactive role in analyzing customer energy data and communicating energy/cost savings opportunities to the customer.

Another important component of the smart building managed service equation is facility maintenance services. Many smart building managed services offer fault detection and diagnostics (FDD), which can identify performance anomalies and inefficiencies and pinpoint the cause (malfunctioning equipment, etc.). Fixing these faults, however, may involve truck-based maintenance services, which managed service providers often offer in tandem with local contractors.

Some of the leading providers in this arena are Ecova, SCIenergy, and Pacific Controls.  In fact, leading commercial real estate manager Jones Lang LaSalle offers Pacific Controls’ software as its own white-labeled managed service, IntelliCommand. AtSite, an award-winning company based in Washington, D.C., provides a comprehensive smart building managed service offering by connecting many of the missing links in building optimization – BMS integration, engineering services, remote energy management – and goes to market with other BEMS vendors such as SkyFoundry.

Smart Building Managed Services Revenue by Service Type, Global Markets, 2012-2020


(Source: Pike Research)

The market for smart building managed services stands at $290 million worldwide today and will grow to over $1 billion by 2020, (described in Pike Research’s report, Smart Building Managed Services) as the concept is proven and a greater number of firms develop interest in outsourcing their energy management needs.


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