Bems 12-executive-summary

Tom Machinchick
Industry Analyst
Eric Bloom
Research Analyst
EXECUTIVE SUMMARY:
Building Energy Management Systems
Hardware, Software, and Services for the Intelligent
Monitoring, Management, and Control of Energy in
Commercial Buildings: Market Analysis and Forecasts
NOTE: This document is a free excerpt of a larger report.
If you are interested in purchasing the full report, please contact
Pike Research at sales@pikeresearch.com.
Published 1Q 2012

© 2012 Pike Research LLC.
All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the
express written permission of Pike Research LLC.
1
Section 1
EXECUTIVE SUMMARY
1.1 Market Overview
The building energy management systems (BEMS) market is changing rapidly. With
technological advances in building monitoring and control leading the way to provide huge
volumes of data on building energy use and efficiency, both new and existing vendors in
the BEMS market are discovering innovative ways to capitalize on this information to help
buildings operate more efficiently.
The BEMS market can be considered a nascent market even though there has been a
focus on energy efficiency in commercial buildings for quite some time. The landscape of
new entrants, new technologies, and new methodologies is expanding rapidly and even the
well-established market leaders are finding new ways to present and frame their
businesses.
1.2 Market Opportunities
Building control and automation systems are enabling access to ever increasing amounts
of data – or “big data,” as it is often called. This data is providing significant opportunities
for building owners and facilities managers as well as market participants stand to benefit
from transforming it into usable information. New entrants in the market are discovering
ways to analyze the data and identify energy efficiency opportunities in ways that require
low or no touch with regard to actual time spent in a building. This is significantly changing
the way services like energy audits are performed, thereby significantly bringing down the
cost and time spent on these activities. Big data in the building sector is also providing
large IT firms that specialize in systems integration an opportunity to enter this market with
enterprise solutions that can help optimize building performance across an organization or
building portfolio. These enterprise solutions are also enabling information to flow
throughout the organization in a coordinated and optimized fashion – from the CEO to the
building maintenance staff to the building occupants themselves.
Technological advances from other industries are also creeping into the BEMS market.
Most of the software solutions are now being offered as software-as-a-service (SaaS),
allowing access to information from any location and lowering the cost and effort of
implementation. Flexible platform solutions are making inroads as well, allowing for the
development of custom applications either internally or through the purchase of custom
applications through “app stores.” The United States Green Building Council (USGBC)
recently announced the offering of an App Lab to promote access to best practice
applications in the advancement of Leadership in Energy and Environmental Design
(LEED) building certifications and efficient building performance. Companies like Johnson
Controls, Indie Energy Network, SCIenergy, and others have developed platforms that will
allow access to huge volumes of building data through apps developed by them or others.
Some of these platforms are even moving toward the “social” aspects of the BEMS
community, offering methods for interested parties to connect and share experiences and
best practices. Johnson Controls’ newly announced Panoptix offering is one such system.
Several companies have developed strategies to focus on one aspect of a building’s
operational infrastructure and take that to a new level of performance. Aircuity and
Redwood Systems specialize in the internal environmental quality of the air and lighting

2
solutions of a building, respectively, with solutions that are affordable and efficient.
Companies such as these increasingly see themselves in the business of building
information or building data and not just the air or lighting solutions business. This
strategic standpoint opens the door for them, and companies like them, to penetrate other
vertical market segments. Identifying themselves with the informational aspects of a
building, while listening to their clients’ needs, fosters innovation and solutions to real world
problems.
1.3 Competitive Environment
Competition in the BEMS market is stiff, with a wide variety of solutions that largely offer
very similar functionality. Such similarities include continuous commissioning,
measurement and verification (M&V), actionable alerts for system maintenance, live
building energy use data, and benchmarking, to name a few. Successful companies in the
market are finding ways to penetrate and access the market through a variety of marketing
channels (e.g., utility demand side management (DSM) programs), or by specializing in a
particular market segment (e.g., retail building portfolios). For some companies, the client
can actually be the utility itself. This has proven successful for the utility, along with
increased customer interaction, the promotion of value-added services, and decreased
costs.
From the large established players in the market down to the small startups, an increased
sense of cooperation exists among competitors. Savvy purchasing managers are requiring
the best solutions at the best possible price and, many times, that means combining the
offerings of a number of different players into the final project solution. Many companies in
the market are also creating opportunities for smaller competitors to access the market on
a larger scale. For example, the advent of application platforms enables best practices
from any company in the industry to now be noticed, purchased, and utilized by a wider
audience. Companies like Cypress Envirosystems, which produces equipment that
digitizes non-digital building equipment like pneumatic thermostats, is opening the older,
non-digital building market to affordable and less disruptive building retrofits. Lastly, large
facilities management firms are changing the BEMS landscape as well. Jones Lang
LaSalle announced its IntelliCommand platform to extend its service offerings to its
worldwide clients. Other facilities management firms, as well as the specialized BEMS
market participants, will have to take note of this strategic shift.
When innovation and innovators are present in a market, the market can be considered
healthy. It can also be dangerous for those asleep at the wheel, so to speak. New
capabilities will have to be learned or acquired in order to remain competitive. Most of
these capabilities will revolve around the data, with the new capabilities ranging from
accessing, storing, managing, and transforming the data to helping the organization itself
transform the way it utilizes its internal capabilities and resources to optimize its
performance.
1.4 Overview of the Market
Globally, the world economies are recovering from several years of a recessionary
environment and slow business growth. The market for BEMS spending may still feel the
effects of the difficult economic environment in the near term, but expectations are
improving. However, today’s financial constraints also represent a key driver of the BEMS
market, as companies find that costs relating to energy can be reduced cost-effectively
through intelligent building energy management. Conversely, one of the main hurdles to
their implementation is finding the capital or financing to pay for the development as well as
initial installation of BEMS. More and more, however, companies are making room in their

3
budget for energy efficiency, sustainability, and greenhouse gas (GHG) emission reduction
projects. Increasingly, pressure from a wide variety of external sources, including
customers, employees, the general public, investors, building occupants and tenants,
governments, and others, is moving large organizations to adopt BEMS.
The largest market for BEMS spending is North America, which is forecast to remain so
during the period examined in the report. The second largest market is Western Europe,
where interest in BEMS and energy efficiency is high. This market, however, will lose
ground to the Asia Pacific market in the coming 10-year period due simply to the extremely
rapid growth of projects there, as well as the vast size of the market itself (e.g., building
stock). Pike Research forecasts that these three regions will experience double-digit
compound annual growth rates (CAGRs) in BEMS spending through 2020, although at
varying levels - with Western Europe being the lowest, and Asia Pacific being the highest.
Other regions of the world examined in this report include Eastern Europe, Latin America,
the Middle East, and Africa. All of these regions will experience single-digit growth over
the period and modest levels of overall spending. This can be due to a variety of reasons
specific to each particular region, but mainly it relates to low levels of building stock and/or
the low priority of intelligent building technologies in each region.
Pike Research projects that, in 2011, the global market for BEMS solutions reached
approximately $1.9 billion. Growth in the early years of the forecast period will be relatively
modest due mainly to the fact that businesses are slowly recovering from several years of
a difficult business environment as well as the early stage of many BEMS technologies. In
the mid to latter years of the forecast period, growth in BEMS spending will accelerate and
the market will end the period in 2020 with a global market size of close to $6 billion, and a
CAGR over the forecast period of 13.59%.
Chart 1.1 Building Energy Management Systems Market Revenue, World Markets: 2011-2020
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
($Millions)
(Source: Pike Research)

77
Section 8
TABLE OF CONTENTS
Section 1 ......................................................................................................................................................1
Executive Summary....................................................................................................................................1
1.1 Market Overview ...........................................................................................................................1
1.2 Market Opportunities.....................................................................................................................1
1.3 Competitive Environment..............................................................................................................2
1.4 Overview of the Market .................................................................................................................2
Section 2 ......................................................................................................................................................4
Market Issues ..............................................................................................................................................4
2.1 Market Overview ...........................................................................................................................4
2.2 Definition of a Building Energy Management System...................................................................4
2.3 Geographic Segmentation ............................................................................................................5
2.4 Commercial Building Types ..........................................................................................................5
2.5 Global Building Stock....................................................................................................................5
2.6 Current Trends in the BEMS Market.............................................................................................9
2.6.1 Big Data.................................................................................................................................10
2.6.2 Convergence of IT and BEMS...............................................................................................10
2.6.3 Co-opetition ...........................................................................................................................11
2.6.4 Enabling Technologies Fostering Competition......................................................................12
2.6.5 Outside Influences and Algorithmic Modeling.......................................................................13
2.6.6 Older Buildings - an Untapped Market..................................................................................13
2.6.7 Utilities and Utility DSM Programs ........................................................................................14
2.6.8 Platforms and Apps...............................................................................................................17
2.6.9 Cloud-Based Computing .......................................................................................................18
2.6.10 Energy Kiosks ...................................................................................................................18
2.6.11 Commercial Real Estate Management Firms’ BEMS Offerings .......................................19
2.6.12 Wireless Connectivity of Building Automation and Control Systems................................19
2.6.13 Increased Need for Training, Consulting, and Organizational Development....................20
2.7 Market Drivers.............................................................................................................................20
2.7.1 The Benefits of Cost Reduction.............................................................................................21
2.7.2 Enhanced Brand or Public Image..........................................................................................21
2.7.3 Green Building Incentives .....................................................................................................22
2.7.4 National Energy Security.......................................................................................................23
2.7.5 Global Regulatory Landscape...............................................................................................23
2.7.6 New Product Offerings and Ease of Implementation ............................................................27
2.8 Market Hurdles............................................................................................................................28
2.8.1 Split Incentives ......................................................................................................................28
2.8.2 Limited Budgets and Financial Solutions ..............................................................................29
2.8.3 ROI and Project Payback......................................................................................................29
2.8.4 Uncertainty about the Amount of Savings.............................................................................29
2.8.5 Limited Expertise...................................................................................................................30
2.8.6 Value of Implementing a BEMS Solution ..............................................................................32
Section 3 ....................................................................................................................................................33
Technology Issues....................................................................................................................................33
3.1 Components of a Building Energy Management System ...........................................................33
3.1.1 Hardware...............................................................................................................................33
3.1.2 Software ................................................................................................................................33
3.1.3 Services.................................................................................................................................34

78
3.1.4 Demand Response................................................................................................................34
3.1.5 Key Trends and Commonality of BEMS Features ................................................................35
Section 4 ....................................................................................................................................................39
Key Industry Players.................................................................................................................................39
4.1 Vendor Profiles............................................................................................................................39
4.2 Aircuity.........................................................................................................................................39
4.3 AMEE ..........................................................................................................................................40
4.4 C3................................................................................................................................................40
4.5 Cimetrics .....................................................................................................................................41
4.6 Cypress Envirosystems...............................................................................................................42
4.7 Eaton Corporation .......................................................................................................................42
4.8 EnerNOC.....................................................................................................................................43
4.9 FirstFuel ......................................................................................................................................44
4.10 Gridium........................................................................................................................................44
4.11 Hewlett Packard ..........................................................................................................................45
4.12 Indie Energy Network..................................................................................................................46
4.13 Invensys plc.................................................................................................................................47
4.14 Johnson Controls, Inc. ................................................................................................................47
4.15 Jones Lang LaSalle.....................................................................................................................48
4.16 Noesis Energy (formerly Brazos Software).................................................................................49
4.17 Prenova.......................................................................................................................................49
4.18 Redwood Systems ......................................................................................................................50
4.19 Retroficiency................................................................................................................................51
4.20 Schneider Electric .......................................................................................................................52
4.21 Siemens Building Technologies..................................................................................................52
4.22 SkyFoundry .................................................................................................................................53
4.23 Trane...........................................................................................................................................53
Section 5 ....................................................................................................................................................55
Market Forecasts.......................................................................................................................................55
5.1 Forecast Introduction ..................................................................................................................55
5.2 Market Conditions for Global BEMS Solutions ...........................................................................55
5.3 Forecast Methodology.................................................................................................................55
5.4 Assumptions Determining the Forecast Numbers ......................................................................56
5.5 Regional Market Forecast Overview...........................................................................................57
5.6 Global Market Forecasts.............................................................................................................58
5.7 North America .............................................................................................................................61
5.8 Western Europe ..........................................................................................................................64
5.9 Asia Pacific..................................................................................................................................66
5.10 Other Regions .............................................................................................................................69
Section 6 ....................................................................................................................................................72
Company Directory...................................................................................................................................72
Section 7 ....................................................................................................................................................74
Acronym and Abbreviation List...............................................................................................................74
Section 8 ....................................................................................................................................................77
Table of Contents......................................................................................................................................77
Section 9 ....................................................................................................................................................79
Table of Charts and Figures.....................................................................................................................79
Section 10 ..................................................................................................................................................80
Scope of Study..........................................................................................................................................80
Sources and Methodology .......................................................................................................................82
Notes ..........................................................................................................................................................82

79
Section 9
TABLE OF CHARTS AND FIGURES
Chart 1.1 Building Energy Management Systems Market Revenue, World Markets: 2011-2020..........3
Chart 2.1 Commercial Building Stock, World Markets: 2011-2020.........................................................6
Chart 2.2 Commercial Building Stock by Building Type, Percent of World Markets: 2011.....................7
Chart 2.3 Commercial Building Stock by Building Type, World Markets: 2011 and 2020......................8
Chart 2.4 Commercial Building Stock by Building Type Floor Space Growth,
World Markets: 2011-2020....................................................................................................9
Chart 2.5 Utility DSM Program Budgets, United States: 2007-2010.....................................................15
Chart 2.6 Utility Demand Side Management Programs by Segment, United States: 2010..................16
Chart 2.7 Building Energy Management Tools in Use, United States: 2010 ........................................31
Chart 5.1 Building Energy Management Systems Market Revenue, World Markets: 2011-2020........58
Chart 5.2 BEMS Market Revenue by Component, World Markets: 2011-2020....................................60
Chart 5.3 BEMS Market Share by Region, World Markets: 2011 and 2020.........................................61
Chart 5.4 BEMS Market Revenue by Component, North America: 2011-2020....................................63
Chart 5.5 BEMS Market Revenue by Building Type, North America: 2011-2020.................................64
Chart 5.6 BEMS Market Revenue by Component, Western Europe: 2011-2020.................................65
Chart 5.7 BEMS Market Revenue by Building Type, Western Europe: 2011-2020..............................66
Chart 5.8 BEMS Market Revenue by Component, Asia Pacific: 2011-2020 ........................................68
Chart 5.9 BEMS Market Revenue by Building Type, Asia Pacific: 2011-2020.....................................69
Chart 5.10 BEMS Market Revenue, Other Regions: 2011 and 2020 .....................................................71
Figure 2.1 Diagram of Split Incentive Market Hurdle, World Markets: 2011 ..........................................28
Table 2.1 Utility DSM Programs by Type and Percent of Adoption, United States: 2010 ....................17
Table 2.2 Types and Participation Rates of Local Incentives, United States: 2007 .............................22
Table 5.1 Building Energy Management Systems Market Revenue, World Markets, 2011-2020........58
Table 5.2 Building Management Spending by Segment, World Markets: 2011-2010 ..........................59
Table 5.3 BEMS Market Revenue by Component, North America: 2011-2020....................................62
Table 5.4 BEMS Market Revenue by Component, Western Europe: 2011-2020.................................65
Table 5.5 BEMS Market Revenue by Component, Asia Pacific: 2011-2020 ........................................67
Table 5.6 BEMS Market Revenue by Component, Other Regions: 2011-2020....................................70

80
Section 10
SCOPE OF STUDY
This report examines the building energy management systems sector from a global perspective.
Pike Research presents a 10-year worldwide forecast and market sizing for seven major regions,
including:
 North America
 Western Europe
 Asia Pacific
 Latin America
 Eastern Europe
 Middle East
 Africa
In addition to a global view of the BEMS market, Pike Research provides separate market sizing
and forecasts for the hardware, software and services markets. Note that Pike Research looks at
the entire BEMS market, including services that are provided as “standalone” (discrete or BEMS
specific services) offerings and those that are embedded in other types of service offerings. Some
services vendors primarily offer BEMS-related services as part of another services engagement,
such as in an energy audit, benchmarking, or an enterprise level consulting project.
This study also examines the BEMS hardware, software and services competitive landscape to
identify and analyze the key players in this market. Pike Research interviewed a mix of software
and services vendors and subsequently produced a profile of a selection of those companies.
Data Collection
The forecasts provided in this study represent Pike Research’s best estimates and projections for
2011 through 2020, where the base year is 2011. It is based on primary and secondary
information obtained in 4Q 2011. During these months, interviews were conducted with more than
25 BEMS vendors of various sorts.
Secondary research information was collected from a wide range of sources, such as industry
publications, governmental agencies, national and international laboratory research reports,
standards organizations, press releases, and industry peer interviews and discussions.
Defining Service Offerings
Pike Research refers to four major service segments in the use of the term “service offerings” or
just “services”:
 Consulting
 Implementation
 Outsourcing
 Software support/maintenance and training

81
Consulting
Consulting services typically consist of:
 Business strategy advice
 Process improvement
 Business process reengineering (an approach to restructure a business process in a
significant way)
 Operations assessment (an assessment of how effectively an organization uses
resources and how well operating units perform)
 Benchmarking
 Needs assessment
 Energy Audits
 Report and review of energy related functions within a building (energy audits etc.)
 Change management (includes a communication plan)
 IT strategy advice
 IT design
 Capacity and maintenance planning (future support requirements for IT)
 Supplier analysis
Implementation
Implementation services focus on executing the business vision or strategy that has been set
forth with respect to carbon management. It often entails the following:
 Installing and configuring the software
 Building custom-specific applications and models
 Creating the data extract, transform, clean, and load data
 Preparing and automating custom reports
 Documenting the whole software setup and environment
 Systems Integration with other building software and Building Automation Components
 Installation and configuration of software specific hardware components
Outsourcing
IT and business process outsourcing represent a very large segment in the overall services
market. When providing these services, a vendor manages the IT infrastructure and applications
and/or a particular process within an organization.

82
SOURCES AND METHODOLOGY
Pike Research’s industry analysts utilize a variety of research sources in preparing Research
Reports. The key component of Pike Research’s analysis is primary research gained from phone
and in-person interviews with industry leaders including executives, engineers, and marketing
professionals. Analysts are diligent in ensuring that they speak with representatives from every
part of the value chain, including but not limited to technology companies, utilities and other
service providers, industry associations, government agencies, and the investment community.
Additional analysis includes secondary research conducted by Pike Research’s analysts and the
firm’s staff of research assistants. Where applicable, all secondary research sources are
appropriately cited within this report.
These primary and secondary research sources, combined with the analyst’s industry expertise,
are synthesized into the qualitative and quantitative analysis presented in Pike Research’s
reports. Great care is taken in making sure that all analysis is well-supported by facts, but where
the facts are unknown and assumptions must be made, analysts document their assumptions and
are prepared to explain their methodology, both within the body of a report and in direct
conversations with clients.
Pike Research is an independent market research firm whose goal is to present an objective,
unbiased view of market opportunities within its coverage areas. The firm is not beholden to any
special interests and is thus able to offer clear, actionable advice to help clients succeed in the
industry, unfettered by technology hype, political agendas, or emotional factors that are inherent
in cleantech markets.
NOTES
CAGR refers to compound average annual growth rate, using the formula:
CAGR = (End Year Value ÷ Start Year Value) (1/steps)
– 1.
CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer
years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter
timeframes may be given as well.
Figures are based on the best estimates available at the time of calculation. Annual revenues,
shipments, and sales are based on end-of-year figures unless otherwise noted. All values are
expressed in year 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100
due to rounding.

83
Published 1Q 2012
© 2012 Pike Research LLC
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Boulder, CO 80302 USA
Tel: +1 303.997.7609
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This publication is provided by Pike Research LLC (“Pike”). This publication may be used only as expressly
permitted by license from Pike and may not otherwise be reproduced, recorded, photocopied, distributed,
displayed, modified, extracted, accessed or used without the express written permission of Pike.
Notwithstanding the foregoing, Pike makes no claim to any Government data and other data obtained from
public sources found in this publication (whether or not the owners of such data are noted in this
publication). If you do not have a license from Pike covering this publication, please refrain from accessing
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