Smart Buildings — the silent ‘killer app’ of IoT

The trifecta of IoT, Cloud and Analytics have been transforming many aspects of our lives and business. Cities, healthcare, transportation, farming, fitness, home, manufacturing and utilities have been the key beneficiaries of this fast-emerging paradigm.

While consumer devices like Fitbit and Amazon Alexa get lot of attention from the media, the commercial buildings have been quietly turning into Software Defined Buildings (SDB). By doing so they are not only lowering the operational cost of the building, but also foster smarter cities, better safety, and occupant comfort. As such they have become an important market segment in the IoT space.

Before delving into the details of smart buildings, here is some context into why buildings are getting the attention of IT vendors lately.

· According to DOE there are about 4.8 million commercial buildings and 350,000 industrial facilities in the U.S., which together account for about half of the country’s total energy use.

· United Nations Environment Program estimated that buildings consume 40% of global energy, 25% of global water, 40% of global resources, and 60% of world’s electricity.

· Water and Energy report 2014 from UN report shows that investing $170 billion annually in energy efficiency worldwide could produce energy savings of up to $900billion per year and each additional $1 spent on energy efficiency in electrical equipment, appliances and buildings avoids more than $2, on average, in energy supply investments.

· Green Energy Ensemble estimated that smart buildings save 30% water, 40% energy, and reduce building operational costs up to 30%.

· World Green Building Council estimated that 90% of typical building costs are associated with staff salaries and benefits. With smart buildings, some of these costs can be reduced through automation.

Needless to say, the need to address inefficiencies and lower the operation cost of commercial buildings is not only good business sense, but also good environment sense, and good safety sense as well. Initiatives from the US Government such as the Green Button and the Better Buildings Initiative are propelling public-private partnerships and helping to fillip the adoption of technology to improve the efficiency profile and energy/resource foot print of the buildings. Until recently most of the efficiencies in buildings were focused on LEED certifications towards greener buildings. However with IoT, smart buildings can add much more value beyond going green. IoT driven buildings offer many more conveniences and unique high value features that current building automation/management systems do not. The following image illustrates this further.

Green versus Smart Buildings (Source: RIU)

Given the global relevance and economics of Smart Buildings, this space is quickly evolving into the ‘killer app’ of IoT.

Makings of a Smart Building

As image below depicts, in a traditional building each of the operational systems are managed separately mostly through either vendor specific protocols or through building communication protocols like BACnet. However, in a smart building the communications are managed through the common backbone of IP networking. In reality most existing commercial buildings employ a mix of old and new paradigms. Using IP networking makes it far more effective in managing and orchestrating various aspects of the building and lowers the TCO.

Unified IP Networking in Smart Buildings versus Legacy (Source: TDIndustries)

Overtime, as sophistication matures, buildings would have the ability to be highly sentient beings. Here are a few examples of building sentience.

· Maintenance — Various systems of the building, including fire, smoke, HVAC, elevators, and others need periodic checks and maintenance. IoT can help minimize the manual checks and maintenance overheads.

· Ambience Control — Capabilities such as fine-grained temperature control, auto tinting of windows for optimal lighting could help improve student and employee focus and productivity.

· Location Based — Available closest parking spots, empty cubicles and conference rooms can be found through location based services in the buildings.

· Incident Management — From security to building systems, smart buildings enable better triaging and management of various types of incidents. A subset of these incidents could be bubbled up into smart city management systems for macro analysis and effective coordination of public resources.

Based on the purpose and architecture of the building there could be thousands of these combinations that are bespoke to the building, some of them dove tailing into the smart city infrastructure and management systems.

IoT enabled Building Management Systems (Source: Navigant Research)

The Interplay of Smart Buildings & Smart Cities

Buildings with connected energy and water meters help make resources management lot more effective. Here are a few examples:

· Energy Conservation— On hot summer days the power utility could increase the ambient temperature of the building by a few degrees, thereby reducing the load on the grid. This is called Demand Response in utilities parlance. In California, the three major power companies (SDG&E, SCE and PG&E) in partnership with Honeywell, implemented Automated Demand Response (ADR) and reported 25% reduction in peak electricity usage.

· Water Conservation — Infosys reported 40% savings in water consumption by leveraging smart sustainability technologies in their campuses. Smart meters empower cities and property owners to have deeper and accurate data about water consumption.

· Emergencies — Smart buildings enable remote shut-off of gas and electricity, so that emergency first responders can get to the building safely and quickly to save lives. On the same note, buildings with electronic internal maps and layout enable first responders get to the right areas of the buildings.

· Waste Management — Smart waste bins help the cities lower the cost of waste management by optimizing pickup routes and timings, and frequency.

· Parking — Cities like San Francisco have been rolling out IoT enabled parking lots, that save people time and hassle of having to search for available parking. Smart parking mitigates traffic congestion and emissions from vehicles.

As cities and buildings adopt connected infrastructure and management systems, one could envision deeper interplay between these two ecosystems.

Technologies enabling smart buildings

Like most technological revolutions, a certain specific combinations of technologies maturing to the right level, at the right time create the tipping point. Here are a few key technological elements that are driving Smart Buildings adoption a possibility. Each of these technologies have existed for a long time. However the economics and the technological maturity have reached the Goldilocks Condition to make smart buildings happen now.

· PoE & Switches — Power over Ethernet has been around for a while, but until recently the power ratings for these were low. Therefore only devices with low power requirements (such as VOIP phones) ran on PoE. Networking vendors like Cisco now offer 60W rated PoE switches that enable much wider range of devices to be deployed. It turns out, at 60W rating it opens the flood gates for a wide range of devices to be IP connected.

· Wireless connectivity — Wireless technologies like LoRa, 4G LTE and (soon) 5G open up variety of options for the always-on connectivity. In fact it is reported that 5G will largely be focused on IoT use cases. When smart meters for utilities rolled out, wireless connectivity were limited. 4G LTE was still nascent. Therefore utilities leveraged Mesh networks to connect meters to the grid infrastructure.

· IP enabled devices and sensors — Bevy of devices and sensors for motion, temperature, light, thermal mapping, smoke, etc., have now become mainstream; and are available at reasonable price point for adoption. With PoE it is easier to connect them on a network and orchestrate intricate sense-and-actuate use cases among them.

· Cloud and Machine Learning — With the economics of cloud computing, it is now fairly feasible to perform machine learning on large data sets at scale. The widespread adoption of Machine Learning and Artificial Intelligence will continue to grow leading to deeper sentience for buildings operations, safety and resource management.


As we have established so far, there is substantial multi-dimensional value for the existence of smart buildings. However getting them up and running is easier said than done. Let’s look at some of the top challenges the early adopters have faced:

· Mechanics of building business — In the US, commercial buildings are classified as Class A, B, C and D. Secondly, there are different types of leasing arrangements between the building owners and tenants in terms of who owns the building maintenance and operational costs. Based on the specifics of the building type, age and leasing arrangements, in many instances there may not be enough motivation for the tenants or the owners to invest in converting an existing building into a smart building. I learnt from entrepreneurs in this space that the idiosyncrasies of the building leasing arrangements are a significant hurdle for selling Smart Building solutions.

· Old + New — Some of the old control systems need to be retrofitted to be able to do bidirectional communication. Standards and best practices in IoT are still evolving. Aspects like these create friction for interoperability of data and security.

· IT Skills — Until now each subsystem is managed as an autonomous unit. When all the operational subsystems are on IP network, the logistics and permutations of interplay and dependencies between various systems becomes very complex. Building managers are not used to this level of complexity (no offense!). Most commercial buildings do not have an IT staff to help manage the software stack and to maintain the algorithms that run the building operations.

· Uniqueness — Each building is very unique in design and usage. Intimate understanding of the usage patterns, incidents to anticipate, energy needs, local ordinances, among others add additional complexity. Over time though, technologies like artificial intelligence would make it easier and complexity induced by the bespoke aspects of the buildings may be a moot point!

· Vendor solution maturity — This is a nascent industry with many startups mushrooming to address various opportunities in the market. The traditional building management players are also quickly adapting and pivoting into IP based building management. As vendors are also learning and evolving, issues caused by lack of maturity in products is to be expected.

By understanding and anticipating these challenges, smart building adopters could mitigate surprises during the rollout of the solutions. As in all complex infrastructure and software upgrades, applying Systems Thinking, Design Thinking and Human Centered Interaction many of the key mishaps could be avoided.


This article is a nice story on Microsoft’s journey into smart buildings