by James A. Bacon

The movement to squeeze more energy costs from commercial and industrial buildings in the United States has only begun to fulfill its potential. That’s the dominant impression I have so far from attending the biennial Niagara Summit here in Las Vegas.

This conference brings together scores of players, from giants like IBM, Verizon and Samsung to entrepreneurial start-ups rolling out new products, who comprise the Niagara ecosystem. The Niagara framework, created by Richmond-based Tridium, creates a platform that connects distributed devices (sensors and controllers) used in building automation systems.

Three technology trends are converging to take building automation to the next level: the proliferation of M2M (machine-to-machine) devices, the embedding of wireless technology in those devices and the rise of Big Data, the ability to store and analyze the unprecedented volume of data generated by those devices.

These trends are changing economies of scale in the building automation industry. For a long time, the market was limited mainly to organizations with large real estate holdings such as government, Fortune 500 companies, retail chains, Real Estate Investment Trusts. They utilized sensor and control technologies primarily to optimize the use of lighting and HVAC, which together account for roughly 60% of all energy expenditures in commercial buildings. The new technologies allow big users to achieve new levels of efficiency but also make it affordable to implement building automation technologies in smaller enterprises and properties.

Driving the explosion in data is the proliferation of M2M devices everywhere, which are increasingly connected to the system by wireless. There are roughly nine billion devices connected to the Internet today, according to Tridium CTO John Sublett. By 2020, the number is projected to increase to 24 billion devices. In the building arena, sensors and controllers are used not only in lighting and HVAC but facility security, water usage, fire controls, logistics, office signage and even vending machines. Data traffic on the Internet now exceeds mobile traffic, and by one estimate is expected to increase 33-fold by 2020.

Big Data is the phrase used to describe the ability to extract actionable information from the massive volumes of data being generated in the increasingly information-intensive economy. New tools are making it possible to combine data from different information silos and even to utilize “semantic” data not structured in formal databases. (Man, oh, man, I hope I’m getting these terms right.) New analytic and visualization software allow managers to troll through the massive volumes of data and spot patterns and anomalies that can be acted upon.

Most of us take buildings utterly for granted. But they are huge consumers of energy, and they are riddled with waste and inefficiency. Companies that have refined their production processes to Six Sigma levels of efficiency on the factory floor are remarkably blase about energy consumption in their office buildings. One of the great challenges of the building automation industry is to get corporate (and government) management to focus on energy efficiency beyond a few trophy LEED certified buildings.

There aren’t many new office buildings being built right now, and even getting funding for retrofits can be difficult. Corporate officers are looking for paybacks of two years, often less. The low cost of electricity in the United States, while a blessing for consumers, reduces the incentive to invest in energy conservation. Furthermore, property owners, building managers and tenants often have diverging interests. Despite all the challenges, the building automation sector is growing and innovating.

Energy conservation is an unsung success story in the American economy. While solar, wind and other alternative fuels has generated the excitement of Silicon Valley venture capitalists, Wall Street deal financiers and the U.S. Department of Energy, the building automation industry has plodded along under the radar screen. But the information technologies that are transforming so many other industries are energizing this sector, too. As the world economy evolves into a facsimile of IBM’s “smart planet,” smart buildings will play a leading role and financial gains from energy conservation will drive the change.