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The overall market for building management systems has shown good growth over the last few years to a value of £325m in 1996 at manufacturers selling prices. A significant proportion of the cost of a complete system is accounted for by design, installation and commissioning costs, with the value of the advanced control product market valued at £93m in the same year.
The market showed a decline during the early 1990's due to the marked downturn in levels of commercial and industrial new build and RMI, during the recession. Despite only a modest upturn in subsequent construction levels, the Building Management Systems (BMS) market has shown positive growth since 1993 largely driven by the growing emphasis on energy efficiency and environmental issues.
The outlook for the market is one of good growth influenced by a number of key factors including:-
However, there are a number of factors which may act to constrain market growth, chiefly a further reduction in product prices as the market continues to mature, as well as the trend towards building services products supplied with integral controls.
The structure of the BMS market is complex, resulting from the production of systems involving design, installation and commissioning, in addition to the manufacture of controls and other hardware products.
The companies who compete in the market fall into a number of broad categories including Controls Manufacturers, many of whom supply complete turnkey installations as well as advanced controls, System Integrators who buy in controls and other hardware products but carry out design, software engineering, installation and commissioning, M & E Contractors some of whom have the ability to develop as well as install and commission systems, Contract Energy Management Systems suppliers and Panel Builders.
The market is dominated by the controls manufacturers, with key companies including Honeywell, Johnson, Satchwell, Landis & Staefa and Trend, as well as TA Controls, Automatrix, York, Serck, Thorn Security and Andover. Systems Integrators have grown their influence on the market over the last few years, with several dozen companies led by MSI Group, Synchronised Systems and E-Squared.
Whilst early systems primarily controlled only Heating, Ventilation and Air Conditioning (HVAC), there has been a trend towards fully integrated building management systems which control the full range of building services including HVAC, Lighting, Fire, Security and Access, as well as data and telecommunications. This trend is likely to continue as these systems offer more efficient management and maintenance of the growing range of services installed within modern buildings.
A key issue affecting the market is the development of a standard communications protocol which would facilitate the development of fully integrated BMS, as well as reducing the complexity and cost of extending or amending systems.
Despite industry discussions over a period of some years, no agreement has been reached as to which of a number of protocols should be formally adopted, although Echelon's 'Lonworks' has become the 'de facto' industry standard. However, there may be a disadvantage to manufacturers in the introduction of a standard communications protocol as it may result in reduced feature differentiation and greater competition between manufacturers, thus placing a downward pressure on product pricing.
Another key product trend is the development of systems incorporating outstation control by means of Direct Digital Controllers (DDC's). This has produced rapid growth in sales of DDC's over the last few years, a trend which is expected to continue at least in the short to medium term, driven largely by the greater emphasis placed on local control.
The distribution of intelligent control products is highly concentrated. The most common route to market is direct to the end user from the manufacturer, with systems integrators also representing a significant distribution channel. Other distribution channels include via M & E contractors and OEM companies.
The commercial sector represents the most significant end use sector accounting for some 60 percent of sales, with key end users including offices, hotels, shops and leisure facilities. The public sector currently accounts for some 25 percent of installations but is expected to provide better future potential due to greater uptake of PFI schemes by private sector investors and an upturn in government expenditure on hospitals and schools at least in the short to medium term.
This comprehensive report represents a detailed assessment of the market, reviewing major trends, key factors influencing developments and future prospects for the sector. Analysis is both quantitative and qualitative, based on our substantial experience of the building and home improvement markets.
Text © 1997 AMA Research
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Last updated by Duncan Nottage 1st February 1999