Smart Building Strategies Program Webcast 10 17 12

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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

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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


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

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


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’ 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.


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’ 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


The Mature Smart Building

Comprehensive
Integration
OPTIMIZATION

Real Time Adaptation

Internal Policies

External Signals


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


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


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

<$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


Investment Influencers

Smart
Building
Investments Electric
Vendors
Utilities

ROI Demand Response
Payback Opportunities:
Value Proposition - Incentives
- Rates

Building
Owners

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


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/


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)


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


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/

Differentiate Facility to Attract & Retain Tenants

 Energy Dashboard Kiosks Upcoming Smart
 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


Achieve Corporate Targets
(i.e. sustainability, CSR, GHG Reductions)

 Energy Conservation Upcoming Smart
– 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/

Compliance

 New Building Codes Upcoming Smart
 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


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


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


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


Recommendations for End Users

 Stakeholder Alignment
 Goals Assessment
 Investment Prioritization
 Awareness of Financial Incentives
 Exploration of Opportunities with Utilities


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


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


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


APPENDIX


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’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’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’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


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.


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