Smart Buildings: Overview, Trends, and Examples

A smart building is any structure that utilizes automated procedures to regulate building operations and improve building sustainability. These operations can include heating, ventilation, and air conditioning (HVAC), lighting, access control and security, elevators, fire safety, air and water quality, digital signage, and energy management.

A smart building exists primarily to:

1. Lower building maintenance and/or sustainability costs.
2. Decrease energy consumption and CO₂ emissions.
3. Guarantee continuous functioning of critical equipment.
4. Ensure healthy indoor air and reduce the risk of disease transmission, especially via airborne infections like COVID-19.
5. Enable lifetime inspection regimens, helping maintain voluntary or mandatory certifications (as applicable).
6. Function as a critical building block in furtherance of “smart city” initiatives.¹

With millions of commercial buildings in the US, the opportunity to replace or retrofit non-smart facilities is enormous, especially as the effects of climate change render an overall reduction in energy usage essential. “Buildings account for up to 70 percent of energy consumption in major cities – and 30 percent of greenhouse emissions globally.”²

Honeywell estimates that residential and commercial buildings consume:

• 40 percent of global resources
• 60 percent of global energy
• 25 percent of global water

Forbes reports that “smart buildings not only save money but are also worth more than comparable non-connected buildings because they run better.”³

Impeding the creation of smart buildings are concerns over:

1. Capital costs
2. Realization of return on investment
3. Cybersecurity, where enabled by the Internet of Things (IoT), whole building facilities could become potentially hackable

Smart Building Design

A smart building – also referred to as an automated building or green building (for its energy-saving characteristics) – represents the integration of computer and human intelligence with mechanical systems.

A smart building is typically “run” by a “building automation system or solution” (BAS) – also known as an “automated building system” (ABS) or “building management system” (BMS).

Designing a smart building automation solution, which can consist of multiple elements, is similar to designing a software application.

Step One for building engineers is to identify client requirements. Analyst Glenn Wintrich explains the concept using a hotel as an example. “Is it a higher priority to reduce energy costs or create a five-star customer experience in terms of water pressure, ambient noise, and air temperature control?  Energy cost reduction and customer experience may not be fully compatible unless the right strategy is in place.”⁴ The combination of upfront costs and projected savings usually determines which features are vital and which features are nice-to-have.

Step Two is to formulate a series of projects which when completed will produce an effective and efficient building automation solution, integrating some or all of the components shown on the left side of the figure below.⁵

Prospective Smart Building Components Including IT
Source: Pinterest

The right side illustrates the present – but ever-expanding – range of IT devices, systems, and services that may be invoked to enable communications with (and among) such disparate entities as HVAC units, elevators, and fire detection and suppression equipment. Ideally, the building automation solution will manage all components individually and collectively through the analysis of shared data.

Step Three is to adopt a “reference architecture” which addresses the interests of building stakeholders, operational processes, maintenance, technology, and sustainability. The reference architecture allows for the introduction of new or enhanced technology or processes with minimal disruption and expense.⁶

Smart building design and development usually involves the selection and integration of multiple hardware and software systems and platforms from multiple sources. As such, building officials should seek the services of a seasoned systems integrator to coordinate the overall effort, particularly functional, performance, and capacity testing.

Leveraging the Internet of Things

The principal enabling technology of smart buildings is the Internet of Things (IoT), which consists of sensors, software, and online connectivity capabilities. A smart building’s IoT elements enable:

• Granular data monitoring
• Advanced analytics

According to analyst Marc Sanchez, “Analytics tools usually involve statistical algorithms, and, more recently, machine-learning capabilities. These sophisticated technologies can drill into the details of your building’s characteristics and energy use, and even integrate various data streams (from both inside and outside your building, like [weather and utility information]) to formulate the best approach to achieving your goals.”⁷

Scoring a Smart Building Design

As a measure of building intelligence, the Honeywell Smart Building Score provides “a universal framework for quick, comprehensive, and easy assessment of any building.” The Score rates 15 technological assets, as itemized in Table 1.

Examples of Smart Building Design

Perhaps the best method of assimilating smart building design concepts is to study existing smart buildings. To that end, the Continental Automated Buildings Association (CABA) has identified several “key examples,” including:

Oakland City Center, which “is notable for its advanced variable air volume (VAV) system … [that] collects temperature and humidity data and learns how the system responds to changes in demand.”

Frasers Tower in Singapore, with “[its] 179 Bluetooth Beacons and 900 lighting, air quality, and temperature sensors [that] gather data in real-time, enabling operators to optimize building spaces for maximum efficiency and productivity.”

Fulton East in Chicago (see below), “the first commercial building to be designed and constructed for a post-COVID-19 environment.” Features include “an airPHX purification system that eliminates bacteria, viruses, and other harmful organisms found on surfaces and in the air; microbicidal interior latex paint on washroom walls to kill pathogens; and contactless features like the Toe-To-Go elevator call button and touch-free thermal scanning in the lobby.”⁸

Fulton East Smart Building
Source: fulton-east.com

Smart Building Market

Market Growth

As predicted by Grand View Research (GVR), the global smart building market, valued at $87.01 billion in 2023, is projected to reach $450.53 billion in 2030, realizing a remarkable compound annual growth rate (CAGR) of 26.5 percent over the forecast period.

GVR asserts that “The growing adoption of Business Information Modeling (BIM), Artificial Intelligence (AI), Internet-of-Things (IoT), Virtual Reality (VR), cloud computing, and data analytics is driving the growth of the market.

“Further, the growing popularity of home automation and rising preference towards working from home is … propelling the market growth. 

“[Finally], the growing use of technologies to recycle and reuse through waste management solutions and increasing demand for commercial buildings featuring smart features, such as intelligent glass, smart thermostats, and smart elevators is expected to create a positive outlook for the market in the forecast period.”⁹

Major Providers

Prominent players in the smart building space include:

• ABB
• Bosch
• Cisco
• Emerson Electric
• Hitachi
• Honeywell
• Intel
• Johnson Controls
• KMC Controls
• LG Electronics
• Legrand
• Schneider Electric
• Siemens
• Sierra Wireless
• Telit¹⁰

Smart Building Trends

Generative AI Is Finally Finding a Role

While identifying applications for generative AI in the smart building sector “has been elusive for many,” analyst Matthew Marson believes that “Applying Large Language Models (LLMs) to look for conflicts in design specifications, or to allow large unstructured data sets to come together to ask informed questions about a building (when was X fan coil unit last serviced?) seems to be some of the most valuable uses.”¹¹

Net Zero Carbon Targets Are Getting Pushed

The admittedly ambitious goal of achieving at least some net zero carbon operations by 2025 is in serious jeopardy, due largely to the disruptive effects of the COVID-19 pandemic. As analyst Marson explains, “Now that we’re already in 2024, many are faced with the prospect of missing their deadline with their big plans being unable to be executed in only a year – especially set in the context of a subdued market. This delay to achieving net zero carbon emissions has allowed many companies and their supporting designers to be able to embed low-carbon design better into their DNA.”¹²

Homeowners Remain Reluctant to Go All In

Smart homes are developing slower than smart buildings. As analyst John Hatcher recently lamented, “many households are reluctant to embrace smart technology on anything more than a piecemeal basis. There are a number of reasons for this, but one of the major barriers to a widespread rollout is the perception that smart technologies are expensive, complicated or not particularly useful. For now, the fully integrated smart home remains largely the preserve of the very rich, or the very tech-savvy.”¹³

Smart Building Information System Standards Are Emerging

The International Organization for Standardization (ISO) has issued ISO 37173:2023: “Smart community infrastructure – Guidance for the development of smart building information systems.”

The standard defines a smart building as a “building that can identify and adapt to both expected and unexpected changes by effective use of data, information and communication technology and which continually improves predictions and action in response to the various needs of building values, urban activities and urban operations.”

As described by the ISO, the standard “is intended as a reference for government and enterprises, organizations and individuals who are responsible for, or need to develop, smart building information systems. This document helps to provide an important description of the principles for the construction of smart building information systems and the interconnections of subsystems. Recommendations are proposed for the layers of information systems and data management.” 

Smart Buildings Are Evolving into Smart Cities

Smart buildings are, of course, the indispensable “building blocks” of “smart cities,” a concept that combines smart physical facilities with smart infrastructure, smart services, and, of course, smart citizens, as shown below.

In addition to smart buildings, the Biden White House is actively supporting smart city initiatives as part of the Infrastructure Investment and Jobs Act, which became law on November 15, 2021.

Smart City Concept
Source: Frost & Sullivan

Recommendations

Devise New Vs. Retrofit Strategy

As we know, constructing a smart building is cheaper than retrofitting an existing facility to render it smart. In pursuing a smart strategy, enterprise officials should probably bias their investment toward new structures while vacating older, non-smart buildings as opportunities present.

Research Smart Building Cyber Threats

Just as new threats like hacking disrupted the then nascent e-commerce market of the 1990s, IoT-oriented cyber attacks may expose smart buildings to operational failures. Regarding cybersecurity in smart buildings, Frost & Sullivan advises that:

1. “Investigating the issue of cyber threats in smart buildings is timely and pertinent.
2. “While avoidance may not be an option, the ability to minimize the impact of cyber threats needs exploring.
3. “Thought leaders and technology experts must collaborate to address various aspects of cybersecurity.
4. “Evaluating the efficacy of technology solutions pioneered by leading companies at an industry level is important.
5. “A well-rounded strategic initiative is necessary to deal with this disruptive trend.
6. “Cyber threats demand the utmost recognition and intervention of administrators and regulators to implement industry-wide changes.”¹⁴

Develop a “Dumb” Backup Plan

Since smart buildings are subject to cyber attacks, David Fisk, professor of Systems Engineering at Imperial College London, recommends a business continuity strategy that would permit a cyber-compromised facility to conduct essential services – basically, a dumb backup plan. “All cybersecurity defenses are potentially breachable; therefore, one has to plan for the worst.”

The Fisk formula, as summarized by Frost & Sullivan, includes “the development of a backup plan that involves identifying a building’s minimal level of functionality and then adding hardwired, back-up equipment with hands-on controls to provide basic service. He asserts that such a strategy may be enough of a deterrent to ward off potential aggressors before an attack is even launched.”¹⁵

Web Links

ABB: https://www.abb.com/
Bosch: https://www.bosch.com/
Cisco: https://www.cisco.com/
Emerson Electric: https://www.emerson.com/
Hitachi: https://www.hitachi.com/
Honeywell: https://www.honeywell.com/
Intel: https://www.intel.com/
International Organization for Standardization: https://www.iso.org/
Johnson Controls: https://www.johnsoncontrols.com/
KMC Controls: https://www.kmccontrols.com/
LG Electronics: https://www.lg.com/
Legrand: https://www.legrand.com/
Schneider Electric: https://www.schneiderelectric.com/
Siemens: https://www.siemens.com/
Sierra Wireless: https://www.sierrawireless.com/
Smart Building Magazine: https://www.smartbuildingsmagazine.com/
Telit: https://www.telit.com/
US National Institute of Standards and Technology: https://www.nist.gov/

References

¹ Marc Sanchez. “What Is A Smart Building? (The Ultimate Guide).” Iota Communications, Inc. October 6, 2020.

² “Smart Buildings: Forming The Foundation of Smart Cities.” Forbes. October 24, 2018.

³ Ibid.

⁴ Glenn Wintrich. “Smart Buildings Automation: The First Steps Are the Most Important.” Dell. June 2014.

⁵ Ibid.

⁶ Ibid.

⁷ Marc Sanchez. “What Is A Smart Building? (The Ultimate Guide).” Iota Communications, Inc. October 6, 2020.

⁸ “Seven Key Examples of Smart Buildings.” CABA. July 8, 2021.

⁹ “Smart Building Market Size, Share, & Trends Analysis Report By Solution (Safety & Security Management, Energy Management), By Service (Consulting, Implementation), By End Use, By Region, And Segment Forecasts, 2023 – 2030.” Grand View Research, Inc. 2024.

¹⁰ Ibid.

¹¹ Dr. Matthew Marson. “Four Predictions for 2024.” Smart Buildings Magazine. January 2, 2024.

¹² Ibid.

¹³ John Hatcher. “Changing Perceptions Around Smart Buildings.” Smart Buildings Magazine. January 4, 2024.

¹⁴ “Cybersecurity in Smart Buildings: Inaction Is Not an Option Anymore.” Frost & Sullivan. September 2015:3-4.

¹⁵ Ibid. p.21.