Smart Building Strategies Program Webcast 10 17 121. There will be silence
before we begin.
There is no separate dial-in number.
Audio will be transmitted over your
computer. Use headphones/earbuds
for best results.
Navigating an Industry in Transformation:
Introducing IDC Energy Insights' NEW
Smart Building Strategies Program
Casey Talon, Senior Research Analyst
October 17, 2012 at 11:00 a.m. EST
2. Logistics
Submit your questions via the chat window at any time
You can download slides using the “Download Slides” button Today’s Speaker
“Enlarge Slides” button for improved view; to return to view with chat, open that
window
Volume controls on the upper left of the console (near the time clock) and on
your computer
Web conference replay available within 24 hours (e-mail will be sent as a
reminder)
To find research reports online: Put document number into the search bar at the
top of any page of our web site, www.idc-ei.com (example: EI12345) or in the Casey Talon
“Advanced Search” Senior Research
Analyst
To participate in the survey at the end, please disable your pop-up blocker ctalon@idc.com
Email: info@idc-ei.com; web site: www.idc-ei.com
For upcoming IDC Energy Insights Web conferences:
www.idc-ei.com and click on the “events” tab (or sign up for our newsletter
from our web site’s home page and you will be notified by email automatically –
www.idc-ei.com/newsletter)
IDC Insights Community: http://idc-insights-community.com
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 2
3. Agenda
Market Context & Industry Status
IDC Energy Insights’ Smart Buildings Definition
Smart Buildings Technologies Value Proposition
What we’ve learned, and what we want to know…
Discussion of ROI
Preview of Upcoming Research
Highlights of Vendor Landscape
Recommendations
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 3
4. Market Context & Industry Status:
Dollars & Sense
Impact of Opportunity
Waste in Saving
C&I Energy Costs 10%
= $202 Billion
Efficiency
45% of Total US Improvement
GHG Footprint
= $20
30% Energy Wasted BILLION
http://www.energystar.gov/ia/business/challenge/learn_more/FastFacts.pdf?d56c-fb2e
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 4
5. Market Context & Industry Status :
Role of Energy in Facility Management
Driving Investment in
Challenges Goals Energy Efficiency:
92% looking for
operational savings
73% want to demonstrate
market differentiation
71% look for improvement
in employee satisfaction &
productivity
-- DOE “Business Case for Energy
Efficient Building Retrofit and
Renovation”
http://apps1.eere.energy.gov/buildings/publications/pdfs/alliances/b
usiness_case_for_energy_efficiency_retrofit_renovation_smr_2011.
pdf
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 5
6. Market Context & Industry Status:
Economy-Wide Challenge
3,000 Energy Star Partners
** This slide highlights a few corporate drivers for SB investment, and the logos are companies that
have joined the Better Buildings Challenge of the DOE as partners.
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 6
7. IDC Energy Insights’ Smart Buildings Definition:
From Energy Efficiency to Smart Buildings
Defining “Smart”:
Moving from check lists & weatherization to IT-enabled efficiency
A smart building is defined as a facility that utilizes
advanced automation and integration to measure,
monitor, control, and optimize building operations
and maintenance.
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 7
8. IDC Energy Insights’ Smart Buildings Definition:
Facilities Management Transformation
2 Key Themes:
Optimization & the Convergence of IT-Building Automation
Key concept is Optimization: real time adaptation to external
data and internal policies:
Changes in operations and maintenance
Changes in business processes
The nature of building management is being transformed by
the demand for new ways to achieve a range of business goals,
including reducing energy costs and attaining sustainability
objectives. New, highly integrated building automation and
information technology (IT) solutions are becoming more
widely available.
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 8
9. IDC Energy Insights’ Smart Buildings Definition :
Facility Transformation
Path to Optimization
4
Integration
3 Across Building
Adaptive Assets &
Controls Enterprise
Responding to Applications
2 New External Data
Automation & Streams
Controls for
1
Energy
Existing Efficiency
Infrastructure
Energy
Management
Upgrades
0
Energy
Auditing &
Developing
the Facility
Baseline
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 9
10. The Mature Smart Building
Comprehensive
Integration
OPTIMIZATION
Real Time Adaptation
Internal Policies
External Signals
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 10
11. IDC Energy Insights’ Smart Buildings Definition :
Maturity Model
Technology ecosystem:
– Six segments:
HVAC
Lighting
Plug Loads
Fire & Security
Distributed Energy
Resources
Analytics & Data
Management
– Focus on Convergence of
IT & Building Automation
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 11
12. IT-Building Automation Convergence
Smarter equipment,
smarter control systems
lead to holistic energy Analytics & Data Control
management IT is now Management Software
increasingly involved as
systems run over
networks, support
Network
middleware, IT
infrastructure, storage,
policies & security
Controllers
Focus on building Sensors
equipment (chillers,
boilers, lighting, etc.) – not
process equipment
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 12
13. IDC Energy Insights’ Smart Buildings Definition:
Technology Infrastructure
Outcomes
Optimal Tenant Decreased GHG
Comfort Cost Savings
Emissions
Internal Inputs External Inputs
Tenant Polling Real-Time Mkt Prices
Smart Building
Sensor Network Integrated Control & Automation for DR Signals
Building Optimization
Sub-Meter Network Weather Forecasts
IT Architecture
Wireless Network Servers Enterprise Applications
Smart Building Systems
Lighting Control System HVAC Control System Plug Load Control Systems Enterprise Analytics & Integration
• Daylight Sensing • Temperature Sensors • Occupancy Sensors • Integrated System-Wide Analytics
• Occupancy Sensing • VSDs/VFDs • Energy Supply Controllers via • Visual Analytics (Dashboards) and
• Dimmable Ballast Control • VAV Controllers Surge Suppressors Reporting
• Full System Integration: HVAC,
Lighting, and Plug Loads
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 13
14. Market Context & Industry Status:
<$10b Market Opportunity
Global Smart Buildings Spending Forecast
12,000.00
10,000.00
8,000.00
$M
6,000.00
4,000.00
2,000.00
0.00
2010 2011 2012 2013 2014 2015
Source: IDC Energy Insights, 2011
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 14
15. Investment Influencers
Smart
Building
Investments Electric
Vendors
Utilities
ROI Demand Response
Payback Opportunities:
Value Proposition - Incentives
- Rates
Building
Owners
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 15
16. Research Lessons:
Smart Buildings – Smart Grid Future Reality
Drivers Benefits Challenges
Peak load
management under
new resource Grid reliability and Customer engagement, demand
shortages stability response program maturity and adoption
Electric Regulator-mandated Technology investment, hesitation over
utilities energy-efficiency resource management on customer side
improvement Regulatory compliance of the meter
Competitive market
pressure for Expansion of market
customer share (in competitive Balancing revenue from energy sales and
acquisition/retention markets) conservation benefits to consumers
Rising uncertain Energy cost Building infrastructure limitations,
energy costs containment technology familiarity/benefit awareness
Business process
Building Inefficient, scheduled improvement: Proactive Change management — business
owners O&M O&M procedures process transformation
Intangible business
benefits CSR, New technology investment capital
Stakeholder/sharehol sustainability, GHG constraints, limited perspective on
der pressures reduction investment benefit calculations
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 16
17. Building-Grid Interface
Early
Opportunities
with Demand
Response
Value of Smart
Building
technologies
Mutually
Beneficial to
Utilities,
Vendors & End
Users Source: OpenADR Alliance: http://www.openadr.org/
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 17
18. Smart Buildings Technologies Value Proposition:
Addressing End User Pain Points
• Manage & reduce energy costs
• Streamline Operations & Maintenance for cost savings (e.g.
catch equipment, settings, scheduling errors)
• Differentiate facility to attract and retain tenants/employees
• Achieve Corporate Social Responsibility (CSR), Sustainability,
and Greenhouse Gas (GHG) Reduction Goals
• Comply with new regulations and codes (i.e. municipal building
codes, state energy efficiency resources standards)
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 18
19. Manage & Reduce Energy Costs
GSA Lighting Study:
Upcoming Smart
Building Strategies
Research:
Analytics & Data
Management for
Smart Buildings
IDC MarketScape:
Smart Building
Analytics
Plug Load Solutions
for Smart Buildings
3 Control Strategies Deployed:
• Institutional tuning and scheduling
• Occupancy sensing
• Personal control
Source: GSA Lighting Study http://www.gsa.gov/graphics/pbs/OccupantResponsiveLighting_508c.pdf
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 19
20. Streamline O&M for Cost Savings
“You Can’t Fix What You Don’t Measure”
Heighten visibility into equipment operations Upcoming Smart
Buildings Strategies
– Fault detection & alarms Research
– Ongoing Commissioning Analytics & Data
Management for Smart
– Preventive Maintenance
Buildings
Defer Capital Expenditures on new equipment Cloud Services for
Smart Buildings
Reduce truck rolls Global Smart Buildings
Technology Spending
“We know from our research and experience that the Forecast
marketplace already has the necessary technology and Energy Services Model
skill sets to reduce energy and operational costs in for Smart Buildings
new ways. Our research and others have shown that
information technology could help accomplish these
goals.” – Rick Diamond, Lawrence Berkeley National Labs
http://gsablogs.gsa.gov/gsablog/2012/05/18/gsa%E2%80%99s-smart-buildings-here%E2%80%99s-what-the-
industry-is-saying/
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 20
21. Differentiate Facility to Attract & Retain Tenants
Energy Dashboard Kiosks Upcoming Smart
Buildings Strategies
Highly Visible Lighting Retrofits Research
Occupant workstation dashboards Role of Social Media in
Developing Smart
Buildings
Plug Load Controls
Smart Building Plug
Load Solutions
Smart Building Solutions
for Commercial Real
Estate
Impact of Wireless
Networks on Developing
Smart Buildings
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 21
22. Achieve Corporate Targets
(i.e. sustainability, CSR, GHG Reductions)
Energy Conservation Upcoming Smart
Buildings Strategies
– Reduced kWh or BTU = CO2e Research
The Role of Social
Space Utilization Media in Developing
Smart Buildings
LEED Certification
Smart Building
Energy Star Ratings Solutions for
Hospitality
Voluntary Reporting Smart Building
Solutions for
Commercial Real
“LEED recognizes the importance of continual Estate
improvement in operational performance and the
foundational role of information, communication
systems, and analytics in reducing operating costs and
the broader impacts of excess energy consumption.”
– Roger Platt, US Green Building Council
http://gsablogs.gsa.gov/gsablog/2012/05/18/gsa%E2%80%99s-smart-buildings-here%E2%80%99s-what-the-
industry-is-saying/
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 22
23. Compliance
New Building Codes Upcoming Smart
Buildings Strategies
Retrofit requirements Research
Lighting efficiency mandates Analytics & Data
Management for
State Energy Efficiency Resource Smart Buildings
Standards Smart Buildings –
Smart Cities
Federal Government leadership in Smart Water
sustainability – EO13514 & EISA 2007 Solutions for Smart
Cities
impact on buildings GSA Smart
Buildings Initiative
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 23
24. Research Focus:
Return on Investment
“Not only does this
Limitations in upfront capital assessment
demonstrate that
responsive lighting
Variance in payback threshold delivers deep energy
savings across the
Shifting role for energy financing – role of board, it also helps
energy services providers GSA understand
where deployment of
this technology
Challenge of budgets and benefits – maximizes payback.”
impact of efficiency improvements on - General Services
Administration
future budgets in the public sector
Split incentives in non-owner occupied
spaces – role leasing contract
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 24
25. Upcoming Research
Update: Global Smart Buildings
New IDC MarketScape: Technology Spending Forecast
Smart Building Analytics
3) Collaborative Research - IDC 4 Pillars - Future of ICT
Social Big Data &
Business Analytics
Mobility Cloud
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 25
26. Vendor Landscape
• Engineering • Legacy • Innovation in
Building Efficiency
Information Technology
Niche Energy Management
Expertise : analytics energy
Automation & expertise management
Control
Experience • Integration • Open
capabilities architecture,
• Existing integration
Services across
Relationships building
systems
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 26
27. Recommendations for End Users
Stakeholder Alignment
Goals Assessment
Investment Prioritization
Awareness of Financial Incentives
Exploration of Opportunities with Utilities
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 27
28. Recommendations for Vendors
Understand End User Pain Points
Clear Value Proposition
Communication of ROI
Identify Partnership Opportunities
Become Familiar with Utility Incentives to Support Upfront
Capital Costs
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 28
29. Recommendations for Utilities
Build relationships with C&I customers outside largest 1-2%
Use Demand Response as entry point
Become familiar with new Smart Building technologies and
where incentives to replace older energy efficiency incentives
make sense
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 29
30. Questions & Answers
Have you joined our IDC online community?
http://idc-insights-community.com/energy
Features Include:
– Analyst blogs and videos
– Discussion forums
– Resource library/complimentary research
– Networking – invite, find and interact with analysts Twitter: @CaseyTalon_IDC
and other members Direct: (303) 385-0327
– Events calendar Email: ctalon@idc.com
Sign-up for our free monthly newsletter: www.idc-ei.com/newsletter
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 30
31. APPENDIX
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 31
32. IDC Overview
IDC (International Data Corporation) is the premier
independent global market intelligence, events, and
advisory firm for information technology, telecom-
munications, and consumer technology markets
More than 1,000 IDC analysts provide global, regional,
and local expertise on technology and industry
opportunities and trends in over 50 countries
We have been delivering IT intelligence, industry
analysis, market data, and strategic guidance since
1964
Our multilingual, multicultural workforce surveys over
250,000 technology users and decision makers
annually, delivering unrivaled coverage
IDC is a subsidiary of IDG, the world's leading
technology media, research, and events company
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 32
33. IDC’s Global Network of Country Offices
1000+ analysts providing a global information network
Coverage of 50+ countries around the world
More than 40+ years experience analyzing IT and
Communications markets
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 33
34. IDC’s Family of Industry Lines of Business:
Insights: Industry-Specific Advisory Services
Insights is a series of industry-focused
lines of business within IDC
Each Insights focuses on technology-
enabled business innovation within a
single industry
Insights leverages 40+ years of IDC
research methodologies and processes
An agile start up with a global footprint
IDC Energy Insights covers: Utilities and Oil &
Gas, including clean energy, smart grid, and
intelligent oil and gas
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 34
35. IDC’s New IT Executive Programs
IDC’s IT Executive Programs consists of a family of research programs intended to
help today’s time-constrained IT executives make more effective technology
decisions. The goal of the program is to offer accurate and timely research that will
assist IT executives in mitigating technology risks, maximizing the effectiveness of IT
investments, identifying and capitalizing on new opportunities, and bringing forth
solutions that are aligned with the organization’s business objectives.
Our flagship offering in the series, the Executive Technology
Advantage Program, includes a strategic partnership with
IDG’s CIO Executive Council, a global peer advisory
community of 750 global enterprises and more than 1,400 IT
leaders. Through this new partnership, IT executives will have
exclusive access to IDC’s team of 1,000+ global analysts, IDC
Insights industry specific research, and the CIO Executive
Council’s member CIOs, offering a global resource to help
accelerate the decision-making process. The new offering
brings together two of the most powerful brands in the IT
industry.
Our IT Executive Programs offer a range of services that align with the needs
of IT executives - from very personalized guidance with a CIO advisor to
specific research to assist with critical decision making.
For complete details visit www.idc.com/iep
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 35
36. Terms of Use
Except as otherwise noted, the information enclosed is the intellectual
property of IDC Energy Insights, copyright 2012. Reproduction is
forbidden unless authorized; contact permissions@idc.com for
information. All rights reserved.
© IDC Energy Insights. Reproduction is forbidden unless authorized. All rights reserved. Page 36