Smart building technologies — what are the spending priorities for FMs at some of the world’s largest firms?

by Brianna Crandall — February 7, 2020 — Independent research firm Verdantix released results from two global surveys in the last week that revealed corporate real estate (CRE) and facilities management (FM) professionals’ spending priorities on smart building technologies and building management software around the world.

Global Corporate Survey 2019: Smart Building Technology Budgets, Priorities & Preferences

Verdantix released its annual global survey of 304 real estate occupiers across 16 geographies and 18 industries on their firms’ real estate strategic direction, governance, budgets and priorities in relation to technology decisions. The survey revealed that 31% of interviewees expect their budget for facilities and asset management software to grow by more than 5%.

Respondents revealed these top real estate objectives for their firms:

  • Improving the comfort of occupants (28%);
  • Minimizing risk to business operations (26%); and
  • Reducing operating costs (16%).

Verdantix Principal Analyst Susan Clarke commented:

Our Smart Building Technologies global survey provides unique data on the 2020 budgets, business priorities and technology preferences of managers responsible for corporate real estate and facilities management decisions at the world’s largest firms. With the Verdantix Smart Building Technologies survey data, corporate managers can benchmark against their peer group, and tech vendors can align go-to-market plans for 2020 with customer requirements.

According to the report, the most significant factors shaping real estate strategies are:

  • Space efficiency and coworking (91%)
  • Rapidly increasing volumes of building data (90%)
  • Sustainability initiatives (89%)

The highest budget increase will be in well-proven hardware solutions such as LED lighting, with 66% of respondents anticipating growing budgets due to mature solutions facilitating an easier budget sign-off.

As part of facilities executives’ strategies to make buildings engaging for occupants, they are evaluating new investments in employee-facing technology such as workplace kiosks (22%), meeting room panels (10%) and voice-activated digital assistants (9%).

Vendors offering workplace software tools include: Accruent, Archibus, FM:Systems, IBM, iOFFICE, Office App, Planon, SmartSpace Software, SpaceIQ, THING TECHNOLOGIES and Trimble.

The majority — 73% — of firms expect their outsourced energy services budget to remain flat, apart from the UAE, where 38% of executives’ budgets will grow in 2020 as they tackle burgeoning energy consumption. Vendors capitalizing on this regional growth include ABB, EDF, Honeywell, Siemens and Veolia, who have all established energy services offerings in the UAE.

The Verdantix report, Global Corporate Survey 2019: Smart Building Technology Budgets, Priorities & Preferences, is available to Verdantix research subscription clients, as is the 2020 Benchmark for Corporate Smart Building Technology Budgets & Priorities webinar.

Smart Buildings Software: Market Size and Forecast 2018-2023 (Global)

The global market for commercial real estate and building management software will grow from $5.3 billion in 2019 to $7.0 billion in 2023 according to another new Verdantix study geared towards vendors but providing insights to end-users. The forecasted compound annual growth rate of 7% will be driven by maturing technologies and growing customer demands.

Vendors positioned to benefit from this growth include integrated workplace management system (IWMS) players such as Archibus, iOFFICE, Nuvolo and Planon, as well as specialist workplace players including Mapiq, Matrix Booking, Robin Powered and Thing-It Technologies.

Verdantix Industry Analyst Ibrahim Yate commented:

Whilst the building technology market has been in existence for over a decade, the vendor community have recently doubled down on their R&D with many new market entrants, which is boosting growth rates as customers demand more sophisticated software tools. Once again, North America will lead spending on commercial real estate investment software as investors looks to leverage software to support their efforts to capitalize on the robust state of their regional CRE market.

The total $5.3 billion of spend in 2019 is comprised of:

  • Commercial real estate investment software ($300 million)
  • Property management software ($2.1 billion)
  • Space and workplace management software ($750 million)
  • Energy management software ($530 million)
  • Maintenance management software ($1,700 million)

Between 2018 and 2023, spending is expected to increase fastest across investment and workplace management solutions, with the Asia-Pacific (APAC) region seeing the growth outlook of 14%; North America 12%; and Europe, the Middle East and Africa (EMEA) 7%. Between 2018 and 2023, total market growth will vary between 5% and 11%.

Yate continued:

Our analysis indicates a slowdown in the growth outlook for the smart buildings software market; however, some segments, such as investment and workplace management, as well as regions — such as APAC — indicate hotspots of strong growth. Vendors looking to maintain and grow their market share need to ensure they adapt their messaging and outreach efforts to meet buyer’s new concerns, and convince buyers concerned about economic uncertainty of delivering a high and speedy return on investment.

The Verdantix report, Smart Buildings Software: Market Size And Forecast 2018-2023 (Global), is available to Verdantix research subscription clients.