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The Systems of Systems

The science known as Systems Theory is the transdisciplinary study of “cohesive groups of interrelated, interdependent components that can be natural or human-made.” Every system has boundaries, is influenced by its context, defined by its structure, function, and role, and expressed through its relations with other systems. A system is “more than the sum of its parts” by expressing synergy or emergent behavior. Changing one component of a system may affect other components or the whole system. Some systems support other systems, maintaining the other system to prevent failure.

Obviously, buildings are systems. From the foundation to the roof, each element connects with other elements creating a physical system. Inside, systems like security, HVAC (heating, ventilation, and air conditioning), electrical, plumbing, and lighting are often both physical and digital, relying on digital controls and monitoring of physical status. External controls may also be present, remotely monitoring or changing status of systems and subsystems.

IoT (Internet of Things) devices are a subsystem within the major systems groups, allowing interaction among systems and creating the smart building. According to Harbor Research, however, the smart building systems market forever seems poised to be entering a new period of transformation, but it always falls short of the finish line.

Like other connected systems, several factors inhibit the evolution of smart modern buildings. Traditional BAS (building automation system)—also known as BMS (building management system)—offerings have focused on reducing energy consumption and improving operating efficiencies. But today, despite these devices being integrated and enabled with network connectivity, OEMs (original equipment manufacturers) and suppliers have largely been unable to unlock the value of smart systems—and ultimately their own devices—because they consider the opportunity too narrowly through the lens of aging business models and practices.

A few key challenges facing the evolution of the buildings space include:

These factors impact the marketplace for smart systems, a market that has growing potential. Technavio predicts the BAS and BCS (building control systems) market will grow by more than $31 billion from 2023 to 2027 and the market’s growth momentum will accelerate at a CAGR of 9%. The growth of the market will be focused on several factors including the demand for energy efficiency, the demand for comfort, foolproof security systems, and the customization of automation and building control systems.

Most of the vendors offer a variety of software, which can be customized as per the end-user requirements. For a residential building, the major requirement will be the monitoring and control of HVAC, security, and lighting systems. Commercial office buildings require the monitoring and control of more products, including lighting systems, HVAC, access controls, and security and safety systems.

Despite the initial high cost of installation, the systems are user-friendly and easy to maintain. Some of the controllers offered by the vendors are wireless, and this makes the usage and installation much easier. Technavio believes these customization features will drive the demand for automation and building control systems in the next five years.

Individual systems will also find growth. The EMS (energy management systems) market size is estimated to grow at a CAGR of 14.2% between 2022 and 2027. The market size is forecast to increase by $37.22 billion. The accelerated growth of the market is by various factors, including the growing demand for energy-efficient solutions in industries and households, the increasing concerns about greenhouse gas emissions and climate change, and the growing adoption of renewable energy sources.

Another aspect can be found in the trend to online shopping for personal assistants—Amazon Alexa, Siri, Google Assistant—which allows people to personalize their home into a “smarter” home. An increase in the use of personnel assistants in residential buildings is a significant trend enhancing the growth of the market.

Amazon and Google have introduced personnel assistant devices, which support smart home applications, thus facilitating the connection of these smart electronic devices to various appliances within the house. The devices can be accessed through the internet and receive voice commands, making them user-friendly. These devices act as a controller for lighting systems and thermostats and work as personal assistants by helping users to maintain schedules. The result: the market in the residential sector is expected to grow at a CAGR of 11.61% during the forecast period due to these trends.

However, the lack of product differentiation will hinder the building automation and control systems market growth.There are many vendors offering a variety of products with customizable options. All these products offered by the vendors have a very similar pricing strategy with less commoditization. The customization option provided by the company is limited to the building management system software alone. Such factors are expected to hinder the growth of the market during the forecast period.

Steadfastly clinging to the status quo is not exactly a recipe for success in a rapidly evolving market where digitization is redrawing the competitive landscape. Harbor Research notes, the rising intelligence of equipment and devices, and the new processes required to leverage their data, challenge existing supplier operating models and protocols. Equipment suppliers, contractors, and engineering firms are purely transactional and walk away following the completion of projects. Building industry OEMs have bundled equipment, software, and services contracts for major customers in a largely unchanged model since the early days of BAS/BMS.

Indeed, technology moves at a variable rate, sometimes faster than the speed of change. The leading edge today will quickly become the nostalgia of tomorrow. That is evident in the IoT market where millions of embedded devices depend on cellular connection—based on outdated and discontinued 2G and 3G protocols. When the shutdown of 3G networks was announced in 2022, cellphone users were offered replacement 5G phones; IoT users got little or no help in changing all those devices to run on 5G.

Consider that during the decades-long lifespan of a commercial building, several cycles of major innovation will occur in various embedded devices and equipment. Power distribution and HVAC systems have remained more or less constant, but many other sub-systems—such as LED lighting—are now designed in a modular way and can be swapped out when they become superseded. In addition, the increasingly software-controlled nature of these components is making them rapidly displace hardware-based control and communications, resulting in many of a building’s sub-systems being re-programmable and updatable.

Mastering digital transformation involves timing and delivery. Technology innovation always moves faster than the manufacture and marketing of actual products in the real world. This creates a classic disconnect between the pace of evolution in silicon and software versus the pace of change in an equipment sub-system. Part of the ecosystem story is the ability to see where, and how fast, things are evolving and thus get usable products in the hands of customers before the next technological wave makes them obsolete. It requires a holistic systems approach, one that understands the interconnection of all the systems that make up the system that is today’s building.

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