©2015 Continental Automated Buildings Association (CABA). Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of CABA. Global Automated Buildings Summit November 26-27, 2015 Berlin, Germany DYNAMICS OF BUILDING AUTOMATION: FUTURE OPPORTUNITIES Ronald J. Zimmer CAE President & CEO Continental Automated Buildings Association LinkedIn:

Presentation Overview Section 1 Overview of CABA Section 2 Size of the Market Section 3 Big Data and Intelligent Buildings Section 4 Intelligent Buildings and Cybersecurity Section 5 The Future for Intelligent Buildings 2

OVERVIEW OF CABA

4 CABA Vision Statement “CABA accelerates growth in the connected home and intelligent buildings sectors.” CABA Board of Directors CABA Board of Directors and Vision

About CABA The Continental Automated Buildings Association (CABA) is an international not-for-profit industry association, founded in 1988, dedicated to the advancement of connected home and building technologies. The organization is supported by an international membership of over 325 organizations involved in the design, manufacture, installation and retailing of products relating to home and building automation. Public organizations, including utilities and government are also members. CABA's mandate includes providing its members with research, services and networking opportunities. CABA also encourages the development of industry standards and protocols, and leads cross-industry initiatives. CABA maintains the largest “connected home and intelligent buildings” research library in the world. 5

Source: Compass Intelligence, What is an Intelligent Building?

Convergence of IP-Based Infrastructure Source: The IET – The Institution of Engineering and Technology Building Services Accommodation Services Business Services 7

SIZE OF THE MARKET

“Intelligent Buildings Market Sizing North America” Resear ch 9 Source: CABA Intelligent Buildings Market Sizing North America 2015

Non-Residential Building Stock – North America (USA & Canada) 10 Source: Various including U.S. Energy Information Administration, National Resources Canada, US DOE, Department of Defense Base Structure Report FY 2009 Baseline (Note: Excludes 26% Department of Defense buildings Which are used for housing, or troop housing and mess facilities), and BSRIA estimates. TOTAL 6.5 Million Buildings

IT/Horizontal Convergence 11 IT convergence / horizontal convergence Source: International Association of Fire and Rescue Services, and BSRIA Stand-alone solutio ns

12 Source: International Association of Fire and Rescue Services, and BSRIA Trends and Drivers

CABA BIG DATA AND INTELLIGENT BUILDINGS RESEARCH STUDY 2015

Big data in intelligent buildings is defined as: The next generation in business and operational intelligence derived from the analysis of data integrated across multiple streams or sources for the purposes of overall system understanding, performance, and optimization The term big data encompasses both the solution architecture and associated analytics Defining Big Data in Intelligent Buildings 14 Source: CABA Intelligent Buildings and Big Data 2015

Survey respondents were primarily concerned with cost Survey Findings 15 On a scale of 1 to 5 where 1 is not important at all and 5 is extremely important, please rate how important the following factors are when making improvements to your building. (n=400) Source: CABA Intelligent Buildings and Big Data 2015 Saving money Reducing energy consumption Increasing occupant comfort

Key Take-Aways 16 Bridge the Gap Customize the Message Create Actionable Solutions Clarify the Message Create Roadmaps Build Off Smart Solutions Time to Educate Engage the Early Adopters Develop Market Awareness Start with Intelligent Solutions in the Market Today Illustrate the Process Focus on the Evolution of the Task at Hand Address Specific Customer Challenges Address Segment-Specific Pain Point Source: CABA Intelligent Buildings and Big Data 2015

Big data solutions change the paradigm for managing: Facilities Energy consumption Business operations Solutions are shifting the architecture of building systems More distributed platform with hybrid and predictive control Based on multiple inputs and outputs from multiple systems Business Case: How will Big Data Change Intelligent Buildings? 17 Clarify the Message Source: CABA Intelligent Buildings and Big Data 2015

Security and privacy are the biggest issues Survey Findings 18 On a scale of 1 to 5, where 1 is not concerned at all and 5 is extremely concerned, how concerned are you about the following issues as it relates to data collected in your building? (n=400, 1 is not important at all and 5 is extremely important) Source: CABA Intelligent Buildings and Big Data 2015

Data security is a major concern for customers, and technology providers have an opportunity to demonstrate how standards and procedures can protect businesses investing in big data solutions. Those interested in big data require transparency in the ROI of building and operational improvements. There is a lot of low-hanging fruit in building and operational improvements – many customers can still benefit from periodic reporting and analytics on existing building systems, and, as a result, many customers are not ready to adopt fully integrated big data solutions. Major Findings 19 Source: CABA Intelligent Buildings and Big Data 2015

Big data in intelligent buildings represents a pinnacle in energy and operational management Market for big data in intelligent buildings is nascent Chasm between the technology and end-user readiness for big data in intelligent buildings The majority of decision makers in the intelligent buildings market do not know how to define big data or understand the potential benefits of these new solutions. Customers prioritize investment on the economic impacts over all other benefits. 20 Source: CABA Intelligent Buildings and Big Data 2015 Major Findings

CYBERSECURITY AND INTELLIGENT BUILDINGS

22 For more information on this research project, go to: CABA Intelligent Buildings and Cybersecurity Study Source: CABA Intelligent Buildings and Cybersecurity Study 2015

23 Source: 2015 Verizon Data Breach Investigation Report North America Threat Profile for Intelligent Building and Market (2015)

24 Source: The IET – The Institution of Engineering and Technology Corporate IT Systems Loss of view Loss of Information Denial of Service Financial Integrity Building Systems (ICS) Safety and operational risk Financial and reputational risk Loss of control Impact on systems Risks Arising from Compromised Systems

25 Source: The IET – The Institution of Engineering and Technology Four Options: 1.Avoidance 2.Reduction 3.Sharing the Risks 4.Retention and Manage Consequences Typical Risk Management Cycle

26 Manage interaction between infrastructure and business systems. Need clear operating procedures and agreed “best practices”. Need to be based on recognized standards (eg., ISO 27001). Legal issues – lease/tenancy agreements covering data protection, human rights, etc. Insurance policies need to be revised and possibly updated. Source: The IET – The Institution of Engineering and Technology Cybersecurity Responsibility Paradigm

27 Source: The IET – The Institution of Engineering and Technology Case Study – IP Based Systems – Sports Stadium

28 Global Cybersecurity Expenditures, $75.8B - $160.6B Source: Compass Intelligence, 2015 Global Cybersecurity Revenues Market,

29 RegionRevenues (B) NA$33.4 Europe$17.4 APAC$15.9 MEA$5.3 LATAM$3.8 Source: Compass Intelligence, 2015 Percent of Revenue by Region for the Global Cybersecurity Market, 2015

SUMMARY AND FUTURE OF INTELLIGENT BUILDINGS

31 “Intelligent Buildings are part of an increasingly integrated built environment.” Smart Grid Smart Cities Smart Homes Intelligent Transport Intelligent Buildings Source: The IET – The Institution of Engineering and Technology Intelligent Buildings are the Future

32 Global IoT Market is Poised for Explosive Growth Source: Jabil,

33 The Internet of Everything

Concerns about energy efficiency Uptake of Building Energy Management Systems (BEMS) Impact of Automated Demand Response (ADR) Uptake of energy usage data analytics and ‘Big Data’ Connectivity and interoperability between BACS and other systems Legislative requirements (eg., Indoor Air Quality Standard) Uptake of ‘Internet of Things’ Cybersecurity and Privacy of Data Trends and Drivers 34

35 Contact CABA Continental Automated Buildings Association (CABA) 1173 Cyrville Road, Suite 210 Ottawa, ON K1J 7S Toll free: CABA (2222) Fax: