Intelligent and Integrated Building Technologies

Market Size in North America 2010

Ken Gallinger, Marketing Director Continental Automated Buildings Association (CABA)

**

CABA Board of Directors

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Bell Canada Chairman Martin Cullum Tridel Corporation Vice-Chair Leo DelZotto Honeywell International Vice-Chair Roy Kolasa Alcatel-Lucent - Lindsay Ellis BAE Systems - Steve Teubner Convia, A Herman Miller Company Randy Storch Direct Energy LP - David Dollihite Hydro One Networks Inc. - Tom Semler Ingersoll Rand - Randy Amborn Institute for Research in Construction, NRC - Morad Atif

CABA Board of Directors

11. 12. 13. 14. 15. 16. 17. 18. 19. Intel Corporation Shahram Mehraban Microsoft Corporation - Jonathan Cluts Monster Cable Products Inc. - Noel Lee Philips - Dr. Satyen Mukherjee Procter & Gamble - Orly Cocco Siemens Building Technologies, Inc. Brad Haeberle Vantage/Legrand - Andrew Wale Whirlpool Corporation Joseph Lui CABA - President & CEO Ron Zimmer

CABA Vision The knowledge-based forum for industry leaders who advance the use of technology and integrated systems in the global home and building industry.

Intelligent and Integrated Building Technologies Market Size in North America 2010
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Better Tenant and Common Area Experience

High Speed Internet / Wireless

Ambient Music / TV

Services and Technologies

Audio Video Conf

Voice Communications

Visitor management

Interactive media

Digital signage

Facilities Management

Copyright 2007 The Fourth Utility, LLC All Rights Reserved.

Reducing Building Cost

Lighting Elevator

Services and Technologies

24/7 Monitor

HVAC

Fire

Video surveillance

Access Energy Copyright 2007 The Fourth Utility, LLC All Rights Reserved.

Smarter Building / Property

High Speed Internet / Wireless
Lighting

Ambient Music / TV

Elevator

Audio Video Conf

24/7 Monitor

IP Telephony

HVAC

Visitor management

Fire

Interactive media

Video surveillance

Digital signage

Access

Future Applications

Energy

Copyright 2007 The Fourth Utility, LLC All Rights Reserved.

Commercial Buildings Energy Use

Other, 5.3% Office Equipment, 15.5% Space Heating, 25.0%

Refrigeration, 0.4% Cooking, 1.1%

Space Cooling, 9.4%

Ventilation, 5.3% Lighting, 28.9% Water Heating, 9.0%

Source: 2008 Department of Energy Buildings Energy Databook

Typical Building Cost Over

A 40 Year Life Cycle
Construction 11% Financing 14%

Operation 50% Alterations 25%

$20 Billion Systems* Market 2009

Intruder Alarm Lighting Control $2,053 $906 11% 5%
Access Control $2,535 13%

BMS $5,733 29%

Fire Detection & Alarm $2,751 14%

CCTV/Video $5,475 28%

$8.5 Billion Market for Products* (incl. cable & cabinets) 2009

* *

Systems = Product + Value Add (Engineering, Commissioning, Installation) excluding maintenance Products = Hardware, Software, Cable and Cabinets at first point of distribution prices

Definition of Convergence
Convergence is to bring together autonomous systems onto a common communication platform within the business enterprise and create a single unified solution
Network = Ethernet Cat 5/5e/6 and/or fiber

BMS structure

IT network/ backbone

Two Main Drivers of Convergence

1

Energy and building performance

Energy savings and efficiency

Security
Higher level of security (physical and IT security converged) Efficient data sharing

Improve building performance (better decisions)

Reduce maintenance costs

Remote access Improving storage Access cards a requirement Link data sharing between departments

Increase the value of the building/rental revenues

Who Is Driving Convergence?

BMS - Large projects 90%-100% converged at management level (Ethernet) - IT convergence not perceived a benefit by many BMS suppliers - IT suppliers keen to drive IT convergence: - Cisco: Mediator and hardware - IBM: software, consultancy and Master SI - Oracle, HP, Plexus, etc. offer software/advice

IT

Security - Integrated in BMS offering

- Driven by IT (hardware, cabling suppliers/channel) - Security SI/installers high end drive it

Who Is Driving Convergence?

Energy rating schemes - Most converged buildings are in US - LEED silver/gold/platinum

Political/ economic factors

- International pressure to reduce CO2 - Government funded projects - Buildings consume 70% of electricity and 40% of primary energy - Pressure from society and clients to have a green profile - Reduce energy costs - Improve building performance and management

End-users

A driver for convergence, but not necessarily IT convergence

Definition of Integration
However nearly all integrated solutions are also converged at least at management level
- many also at control level
IT-Networks
IT-Convergence

Integration is to add value by joining or linking different building services products

Service layer (IP provider)

Management level (Mostly IP)

Automation/control layer (IP/BACnet/LON/proprietary)

Integration Technical Infrastructures (HVAC/Lighting/Security/Fire etc.).

Automation/control layer (IP/BACnet/LON/proprietary)

Development of Integrated Building Management Systems (IBMS)

Integrate with sub-systems Integrate with other BAS

Integrate with other enterprises systems Integrate with other systems

Open Standards Enabling Convergence

How Quickly Will Integration Grow?

Hurdles:
Too much customization Lack of standard applications Ability to demonstrate and convince the clients on ROI

Number of Projects

Time

Total System Market $20 Billion

8% converged (IT) only

34% integrated and converged

2% integrated only

56% = stand-alone 44% = integrated and/or converged

BMS
21% on a separate BMS infrastructure

IT
13% on the IT network/backbone

Stand-Alone vs. Integration/Convergence by Product Area, US$ Million, 2009

7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 BMS Lighting (controls) Stand alone CCTV Access control Intrusion Fire and safety

Integration

Convergence (IT)

Convergence (BMS)

Stand alone is high for lighting, intrusion and fire (~90%) IT convergence only 25% for CCTV, 6% access Integration and convergence high for BMS (54%) and access (45%)

Forecast 2009 2013 % Split by Stand-Alone vs. Integrated and Converged

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2009 2010 - Converged BMS 2011 2012 2013 - Convergence IT Integrated only Stand alone

Key Market Drivers and Trends

Energy saving applications Open system Integration and IT convergence Increase in energy retrofit Consolidation will continue Compete in the knowledge in buildings and BAS applications Controls contractors migrate to system integrators

Key Market Drivers and Trends

Current drivers: 1. Energy management More function to reduce energy consumption Data visualization software and enterprise dashboards Integrate smart meters Energy monitoring, reporting and analysis service 2. LEED and Energy Star Label 3. Energy Legislation and codes 4. Government stimulus Long term driver: 5. Smart grid development Monitor consumption and track min. and peaks Automatic demand response and demand modeling

Smart Grid - Definition

An intelligent electricity system that connects all supply grid (utilities) and demand elements (end-users) through an intelligent communication system

IBC Markets Will Rebound

Depressed economy, lack of credit, increasing building vacancies Fall in new construction, delayed refurbishment and retrofit However, IBC* markets have outperformed Economic stimulus will help boost demand particularly public sector IBC* markets expected to return to growth late 2010/early 2011
Construction Output Growth Rate (%)

1,800,000
1,600,000 1,400,000 1,200,000 1,000,000
10% 13% 9% 6% 6% 5%

15%

USA
10%
4% 5% 5%

800,000
600,000
US$ Bn.

0%

400,000 200,000

Construction Output -7%

6.5%

Rate Source: Growth Economist/ US Census Bureau

-5%
-10% 7.0%

350,000 300,000 250,000 200,000 150,000 100,000 50,000 2009f 2010f 2011f 2012f 2013f 2014f 2015f 2016f 2017f 1.5%
Source: StatCan

6.0%

Canada
4.2% 4.2% 3.1% 2.3%

5.0% 4.0% 3.0% 2.6% 2.3% 2.0% 1.0% 0.0%

* Intelligent Building Controls

Key Findings
Environmental (HVAC) Building Controls The market will compete in applying BAS to tackle climate change issues Companies need to obtain and disseminate both controls and IT knowledge Lighting Controls Huge savings and market potential Consolidation to provide total lighting solutions and more integration LED lighting is a growing market but controls required for better efficiency Security Systems CCTV / Video surveillance setting the pace, followed by access control Strong movement towards IP systems and integration of security systems Fire Detection and Alarm Robust, growing market, driven (and constrained) by codes and regulations Demand for better evacuation solutions will drive integration of nascent mass notification / voice evacuation market

End-User Sectors

Top vertical markets:

- Education - Offices - Central / Local Government - Health

13%
12% 11%

9%

Intelligent Buildings

YOUR INFORMATION SOURCE FOR HOME & BUILDING AUTOMATION Continental Automated Buildings Association 1173 Cyrville Road Suite 210 Ottawa ON Canada K1J 7S6 caba@caba.org www.caba.org Phone: 613.686.1814 Fax: 613.744.7833