The North American building automation systems market generated revenue of $535.3 million in 2011, up 0.7 percent over the previous year, and should reach $615.4 million by 2015, Frost & Sullivan reports.
The analyst firm’s most recent Analysis of the North American Building Automation Systems Market says the market will experience a compound annual growth rate of 2.8 percent from 2011 through 2016. This growth will be fueled in part by the recovery in the economy, overall, and the construction industry, in particular.
Legislation such as the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 are inciting North American building owners and facility managers to install building automation systems to meet the more stringent requirements, according to the analysts.
Conversely, factors limiting revenue growth in building automation are the perception of high initial cost and lack of common protocols. The economic downturn and slowdown in construction activity are also anticipated to restrict growth in the short term.
Educating customers about the lifecycle cost benefits of installing a building automation system and highlighting the energy savings that are achievable with it will also be crucial for success in the market. Other key findings include:
- The application software segment is declining as controllers are being increasingly embedded with software.
- As software applications move to the cloud, this segment is likely to witness a further decline toward the end of the forecast period. The current sales model is also expected to gradually shift to a licensing model.
- Integration of building automation systems with information technology systems is expected to continue throughout the forecast period.
- Another major market trend is the use of wireless technology. Wireless building level controllers are expected to gain traction due to their added flexibility and easier installation.
- Although modest growth is expected in all verticals, the healthcare, government, and education verticals are expected to witness the highest growth during the forecast period.
- The largest distribution channel in this market is the direct channel. In fact, about 40 percent of building automation systems are distributed through this channel.
- The role and influence of system integrators are expected to strengthen, given the trend toward technology convergence in the market.