Navigant Research Blog

Diving Deeper into IoT for Small and Medium Buildings

— October 31, 2016

HVAC RoofOn October 27, I joined Sunita Shenoy from Intel, Doug Harp from CANDI Controls, and Vladi Shunturov from Lucid for a roundtable discussion on the role of the Internet of Things (IoT) in developing intelligent small and medium buildings (SMBs). We wanted to tackle the big question of how technology—and specifically IoT—can transform smaller buildings for efficiency, cost savings, and broad business improvement.

For years, SMB owners disregarded opportunities to invest in intelligent building solutions because the ROI based on energy efficiency alone just did not pencil out. Today, the low-cost controllers, gateways, and sensors that make up an IoT platform solution deliver the kind of actionable insight that garners customer investment. Customers can utilize cloud-based software to translate a new array of data into impactful information regarding equipment operations, occupancy, and energy to help make strategic decisions around building operations costs. (You can hear our discussion around this important industry evolution by accessing the archived webinar on demand.) We received many great questions from the audience during the webinar—so many in fact that we could not address all of them in the allotted time. Below is one great question that we did not get to that highlights some additional important aspects of the market development for IoT in SMBs.

“To many SMBs, the whole concept of IoT and BEMS [building energy management systems] may be foreign. While the simplicity, affordability, security, easy install, etc. may have appeal, how do you make a concrete business case that makes the concept appear favorable to the non-tech-savvy SMB user who sees such tech as complex, an unwanted intrusion into their daily tasks, and are unsure of the ROI?”

Day-to-Day Results

As we saw with our research around another tech-focused trend, big data, customers don’t care about the jargon or buzz words. What resonates is the impact the technology will have on their day-to-day jobs and possible corporate objectives. The customer point of view is certainly not one-dimensional, and one of the challenges for market development is framing the business case in terms that speak to the variety of potential buyers. Our research suggests that the following aspects of IoT-enabled intelligent building solutions resonate with SMB customers:

  • Wireless solutions that can be installed in less than a day, without business disruption
  • Dashboards and reports that quantify the impact of operational inefficiencies in terms of energy, costs, and clear/prioritized action items
  • Business-specific insights such as space utilization for offices or occupancy data to inform product placement in retail

You can find additional detail about this trend in Navigant Research’s recent Building Energy Management Systems for the Midmarket report.

 

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