- Smart buildings are the perfect place to apply AI
- AI can help turn a sea of IoT-generated information into actionable insights
- Telcos are in prime position to capitalize on this opportunity providing connectivity and managed services
AI is a data hungry beast. And what better to feed it than IoT data. More specifically, the mountains of data created everyday by smart buildings.
Smart buildings are nothing new – the Internet of Things led to a proliferation of sensors in every nook and cranny. Estimates around exactly how many smart buildings there are vary, but suffice to say it’s a lot. That’s very good news for telcos.
According to Juniper Research, there were 31 million smart buildings in China and 16 million in the U.S. alone last year, with Europe home to another 18.9 million. Parks Associates, which tracks tech adoption in residential multi-family dwelling units (or MDUs, aka apartments and condos), pinned the U.S. figure at 34.4 million smart MDUs as of year-end 2024 and tipped that number to rise to 35.4 million by the end of 2025.
“Over the past five years, the smart MDU market has experienced rapid evolution, moving from being primarily a luxury amenity at select few communities and into wider adoption,” Elizabeth Parks, president and CMO at Parks Associates, told Fierce. Though the smart MDU market has slowed alongside new housing construction recently, Parks said retrofits of existing buildings are expected to continue to drive market growth.
Why it matters
Honeywell VP and Chief Solutions Engineering Officer Greg Turner told Fierce that with the influx of smart building data, customers began to experience “dashboard fatigue.” That is, they ended up with too much information about the building and its problems and not enough information about what to do to solve those problems.
Enter AI. Turner said the tech offers a way to pivot from information to action. And he’s not alone in thinking so.
As Tom Rule, segment head of Digital Buildings for Siemens Smart Infrastructure, wrote in a blog, AI can help make sense of the vast treasure troves of smart building data in a way humans can’t alone.
“Smart buildings create tons of data. Every second, temperatures, pressures, on/off statuses, and more come rolling into the system. The problem is that data is a rich ore, not a finished product,” Rule explained. “What machines can do that people cannot is process that data quickly enough to get results in a timely manner.”
The telco play
What does any of this have to do with telcos? Well, as Turner explained, connectivity is key for smart buildings and even more so for autonomous ones. And connectivity can be expensive for those trying to take a DIY approach.
“One of the biggest barriers to connecting the things in the building together today is the non-value added cost of adding wired cable. To connect a $30 temperature sensor, you can frequently spend $1,000 in installation costs,” he said. “The role of the telecoms, particularly as they move to providing public and private 5G network infrastructure, is they eliminate that cost and they make it possible to be really, really agile.”
But beyond connectivity, Parks said telcos also have an opportunity to provide value-added and managed services for commercial and residential buildings alike. Think things like using AI for energy management and optimization, capital planning, security and access control, space management, predictive maintenance and more on the commercial side. And for consumers, think climate control, entertainment options, security and more.
“Smart amenities have considerable room to grow in the commercial, SMB, and residential building environments,” Parks said, noting these will be based on a foundation of in-building connectivity.
“Telcos sit in a great position to build value beyond the pipe; this will require employing new technology platforms to offer new services and systems,” she continued. “The value will show up in many ways as an extension of the broadband network – it could be around safety and security, communications, remote control of lighting and HVAC systems, notifications of air quality, energy savings for the building, remote access, cyber and network services, and more.”
Telcos have been chasing the add-on services opportunity for a while, particularly home security and things like parental controls for entertainment. Could AI be the key that unlocks the flood gates to new revenue? We’ll be watching closely.