Navigant Research Blog

The Digital Transformation of Buildings: Creating Business Value, Not Just Data

— November 2, 2016

Intelligent BuildingThe ubiquity of unstructured and real-time data streams has the potential to revolutionize business. Consumers expect technology to make their homes more comfortable, their schedules more productive, and their travel more efficient. The unyielding pressure to be connected is beginning to transform expectations for how commercial buildings are operated. The challenge is now to align occupant and business expectations with real estate and facilities management realities.

Navigant Research has been tracking the development of the intelligent building industry and specific innovation through the convergence of IT with commercial building equipment and controls. Energy efficiency has been the bedrock of market development because the improvements in operations translate into reductions on utility bills—a transparent monetization of return on investment. The energy story is a critical starting point, but it is only part of the promise of intelligent building technologies. As the market continues to mature, a more comprehensive story is unfolding around the business value of digital transformation in commercial buildings.

IoT for Bigger Impact and Better Decisions

The Internet of the Things (IoT) characterizes an important shift in positioning technology for improving commercial building operations. The fundamental idea is that IoT is a platform approach to data creation, communications, aggregation, and analysis. It’s about creating data-rich environments for a more comprehensive view of what is happening inside the walls of a commercial facility to make better decisions. The ability to translate the data into information that resonates across business units and stakeholder points of view is what’s really impactful about IoT in commercial buildings. In other words, one IoT intelligent building solution can address big business pain points—energy efficiency for the head of sustainability, predictive maintenance for the head of engineering—while also generating enterprisewide key performance indicators (KPIs) for the C-suite.

There is a big-picture opportunity here. When IoT-enabled intelligent buildings are a reality, the benefits are wide-reaching. As explained in a recent Huffington Post article, “It is through a change in mindset, enabled by the Internet of Things, that buildings become smart. If we get buildings right, we get the energy system right. … Smart buildings reduce the cost of the energy transition—both upfront, as smart buildings allow fewer investments in new power capacity, and on an ongoing basis due to less energy consumption and integration of renewables such as surplus energy from other parts of the city.” Navigant Research agrees. In fact, we have been outlining the importance of buildings in our ongoing research into the energy industry transformation, or as we frame it, the development of the Energy Cloud. In our most recent Energy Cloud white paper, we discuss this very idea as Building2Grid. Watch for more on this big-picture idea for the intelligent building in the coming months.

Interested in learning more about Navigant Research’s IoT research? Check out our new IoT research service here.


Hacks Lead to Frustration, Doubt in IoT Security Schemes

— November 2, 2016

Enough with the security breaches that leverage Internet of Things (IoT) devices and home Wi-Fi routers. The latest attacks on major websites clearly shows that the current schemes for locking down these connected devices are broken.

A quick recap of what happened on October 21 illustrates the problem. A double-dip distributed denial-of-service (DDoS) attack caused outages for some of the leading Internet destinations such as Twitter, Amazon, Tumblr, Reddit, Spotify, and Netflix. The attacks were pinned on a cyber criminal, or criminals, who used the Mirai malware, the same malware that took down sites in September. This malicious botnet searches the Web for IoT devices such as CCTV video cameras, digital video recorders, or Wi-Fi routers that still have factory-default usernames and passwords in use for protection. Such vulnerable devices are then organized to send junk traffic to online websites that eventually crash from the huge volume of traffic coming from multiple devices, sometimes in the hundreds of thousands or millions.

Outages Caused by Mirai Malware on October 21, 2016

neil iot hack


This latest attack caused the US Department of Homeland Security (DHS) to hold a conference call with 18 major communication service providers to develop a new strategy for securing IoT devices. DHS officials said its National Cybersecurity and Communications Integration Center is coordinating with police, private firms, and researchers to better fend off future attacks that exploit the mushrooming number of IoT devices.

Two of the hardware manufacturers involved in the attacks have said they would take steps to reduce the risks from such attacks. Chinese firm Hangzhou Xiongmai Technology, which makes surveillance camera components, said it was recalling some of its products sold in the United States. Dahua Technology, also a Chinese company, said some of its older cameras and video recorders are vulnerable to attacks when a user has not changed default passwords. Dahua is now offering firmware updates from its website to fix the problem, and is offering a discount to customers who want to exchange their device.

These are positive, after-the-attack steps, but the damage done still leaves a cloud hanging over the IoT trend, particularly among consumers. A new survey finds 40% of respondents saying they have no confidence in the safety, security, or privacy of connected devices such as web-enabled thermostats or appliances, according to IT security firm ESET. Moreover, more than half of respondents indicate they are discouraged from buying IoT devices because of cybersecurity concerns.

Success Hinges on Promise of Security

I still count myself among the many proponents of the IoT. The world of connected devices, systems, and services promises many helpful applications and use-cases that benefit users, particularly in terms of energy efficiency and convenience. However, the constant drip of hacks and the misuse of connected devices needs to stop. The vendors involved need to do a better job of securing the devices and helping end users to do the same. Otherwise, the promise of an IoT market will not be met, and the lost opportunity could mount to millions or billions of dollars. Security needs to come front and center for all parties. If the IoT trend is of interest, Navigant Research has just launched a new IoT research service that is worth checking out.


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