Smart Building Market Set to Skyrocket to USD 277.92 Billion by 2034

• North America led the market in 2024, capturing a dominant revenue share of 35%.
• The safety & security management solution segment generated the highest revenue share in 2024.
• The energy solution segment is projected to experience the highest growth rate (CAGR) during the forecast period.
• The implementation service segment accounted for the largest revenue share in 2024.
• The support and maintenance service segment is expected to grow at the fastest CAGR moving forward.
• In terms of end-use, the commercial segment held the largest revenue share in 2024.
• The residential end-use segment is anticipated to grow at the highest CAGR throughout the forecast period.

The smart building market is growing rapidly with the help of innovations in IoT, energy efficiency, and automation. Such buildings have incorporated advanced systems for lighting, HVAC, security, and more, which enhance operational efficiency and sustainability. The surge in urbanization, green building initiatives, and the need for cost-effective solutions are further driving market expansion. The market is expected to grow with segmentation by solution type and region, supported by ongoing technological advancements and government support for smart infrastructure.

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Market Landscape

Core Factors

Smart buildings play a vital role in the evolution of smart cities, although they progress on their own track. By utilizing integrated sensor networks, these buildings can monitor electricity and water usage, assess sustainability metrics, and connect seamlessly with broader smart city systems. As smart city adoption accelerates, it becomes a driving force behind the rapid growth of the global smart building market.

Potentials

• IoT Integration Surge: The rising use of IoT devices is driving advanced building automation and enabling real-time monitoring.
• Demand for Sustainable Buildings: The growing emphasis on eco-friendly construction and energy-efficient solutions offers significant growth opportunities.
• Smart City Growth: The expansion of smart city projects fuels the need for interconnected, intelligent building systems.
• Technological Progress: Breakthroughs in AI, machine learning, and cloud computing pave the way for smarter, more predictive building management systems.
• Government Backing: Policies and incentives that promote energy efficiency and digital infrastructure are fueling market growth.

Obstacles

High Upfront Costs: The high upfront costs of smart building technologies, including sensors, automation systems, and infrastructure, are a significant barrier for most organizations.
Complex Integration: Integrating new smart technologies with existing systems or outdated infrastructure can be both challenging and expensive.
Data Privacy and Security: The wider deployment of connected devices and sensors means security threats and potential breaches in sensitive data.
Technology compatibility issues: Different smart technologies and platforms can create a lack of system integration, and thus hinder the performance of smart building solutions.
Shortage of Skilled Talent: The demand for professionals skilled in smart building technologies, IoT, and automation systems is more than the available workforce, which is limiting growth in certain regions.

Regional Insights

In 2024, North America took the lead in the smart building market, capturing 35% of the revenue share. The energy solution segment is poised for the highest growth, with the implementation service segment driving the market. The support and maintenance service segment is expected to experience the fastest expansion. The commercial sector dominated the revenue share, while the residential segment is forecasted to grow at the highest rate throughout the forecast period.

Industry Leaders

• Delta Controls
• Building IQ
• Johnson Controls
• Honeywell International Inc.
• Legrand
• Hitachi Ltd.
• Thales Group
• Accenture
• Emerson Electric Company

Recent News

• In April 2024, Johnson Controls, a global leader in smart, healthy, and sustainable buildings, was recognized as the top performer for its smart building management platform in the Smart Building Management Platforms competitive assessment by ABI Research, a leading global technology intelligence firm.
• In March 2024, as part of India’s commitment to decarbonizing its growing building infrastructure, Mahindra Group, a major Indian industrial enterprise, partnered with Johnson Controls to launch the Net Zero Buildings Initiative. This groundbreaking collaboration aims to drive the decarbonization of India’s commercial, residential, and public buildings, providing easy access to critical data and resources to support organizations on their journey toward achieving net-zero buildings.

Market Segmentation

By Component

• Solutions
  • Safety and security management
    • Access control system
    • Video surveillance system
    • Fire and life safety system
  • Energy management
    • HVAC control system
    • Lighting management system
  • Building infrastructure management
    • Parking management system
    • Smart water management system
    • Elevator and escalator management system
  • Network management
    • Wired technology
    • Wireless technology
  • IWMS
    • Operations and services management
    • Real estate management
    • Environment and energy management
    • Facility management
    • Capital project management
• Services
  • Consulting
  • Implementation
  • Support and maintenance

By System

• Parking Management System
• Physical Security System
• BEMS
• Others

By Technology

• Wireless Technology
• Bus Technology
• Others

By Application

• Commercial
  • Retail
  • Hotel
  • Healthcare
  • Others
• Residential
• Industrial

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