Opinion piece published in the Journal du Net on 11 September 2024.

The acceleration of the digital transformation of the real estate sector, and more specifically that of smart buildings, is prompting a myriad of IT players to position themselves in this promising market. It also raises questions about the relevance of certain business models in a context of market consolidation.

A buoyant but complex market

Only 6% of commercial buildings over 1,000 sq. m. are equipped with digital tools for efficient energy management, even though the aim is to reduce their consumption by 60% by 2050*. This figure alone testifies to the promising prospects of smart building, which is attracting service companies, software publishers, integrators, equipment manufacturers and start-ups. These digital players are joining forces with leaders in construction and multi-technical services who have considerable assets at their disposal, such as intimate knowledge of buildings and expertise in project management. While the smart building market is whetting appetites, it is still limited by a lack of clarity and structure in the offering, due to the multitude of expertise involved and the wide variety of promises and functionalities. Customers struggle to understand the added value of what professionals have to offer, fearing a counterproductive accumulation of solutions and technologies ill-suited to their needs. And there are other challenges too: a crisis in office real estate, which can put a strain on budgets allocated to digitizing work environments, to which we can add the evolution of uses, which increases the challenge of interoperability of solutions deployed over time, or the rise in cybersecurity risks linked to the intensification of hybrid working and the ever-increasing openness of companies to the Smart City. While a wave of consolidation in the tech world is already taking shape, the DSC model could well, as it did during the advent of Industry 4.0, come out on top in this race to smartize buildings.

Tailor-made solutions

One of the challenges of smart building is the lack of replicability of deployed solutions between different buildings. And yet, in smart building, software platforms must be able to respond precisely to the unique requirements of each project, or even each building within the same property portfolio. While software publishers have a strong presence in the smart building market, the standardization of the platforms they develop can pose problems of adaptation on a building-by-building basis, with a limit to their interfacing with other project systems. Remember that smart building is not just about software platforms, but also and above all about services! In reality, the editor’s model will surely be better suited to smartization projects in specific, volume-generating sectors, such as residential. And as long as there is no smart building GAFA, this same model will be less flexible to act on a case-by-case basis and thus meet the varied and unique needs of smart buildings. As for the integrator model, it presents the limitation of dependence on third-party platform roadmaps, and therefore a lack of control over project construction, especially when it comes to the services to be deployed.

Uses before technology

This brings us to the notion of services, which lies at the heart of the DSC model: making buildings intelligent means addressing customer needs in terms of usage, before addressing them in terms of technology. It’s usage that determines the type of technological solution to be chosen, and not the other way round, reflecting a notion of flexibility and scalability that is essential in the smart world: making a building smart means making a building capable of integrating new services and responding to current uses, while also being able to address future uses. For example, the integration of artificial intelligence paves the way for increasingly autonomous structures, capable of predicting needs thanks to machine learning models. DSC is thus a model of solution co-construction support, as opposed to other models where the approach is guided by technical roadmaps.

Avoiding the technological patchwork

Making a building intelligent also means adopting a holistic approach to its information system. You need to be able to deal with a wide range of subjects, from the workplace to application development, building operation, usage-based energy management and cybersecurity. This means having the potential to integrate a variety of technologies – IoT, artificial intelligence, cloud, cybersecurity – into a single, coherent platform. DSC understands that this is a prerequisite for the success of intelligent buildings, since it can provide integrated, optimized building management without the complexities associated with multiple suppliers and technologies. It’s easy to understand that other models, which call on a variety of software solutions to assemble them and attempt to exploit the whole, may seem less appropriate: the “patchwork” of solutions complicates the management and evolution of systems.

Economies of scale

Not the least of the corollaries of an integrated approach is the reduction of costs and risks, and the optimization of resources. By covering the entire spectrum of services needed to manage an intelligent building in-house, and therefore having access to the full range of diversified and specialized technical skills required, the DSC reduces the costs and risks associated with coordinating multiple suppliers. Moreover, by optimizing the technologies deployed, it can ensure greater return on investment.

DSC stands out for its ability to offer integrated, flexible and scalable solutions tailored to the specific needs of each smart project. By bringing together a wide range of technical expertise and ensuring consistent, optimized management of technologies, it is positioned as a relevant player in making buildings smarter, more autonomous and supporting companies in their smartization projects. The figures are in: Numeum forecasts +5.8% growth for the digital market in France in 2024, proving once again the structuring need for French companies to continue their transformations and investments in digital services and solutions. A resilient performance in a complicated economic climate, which will see the market reach €70 billion, with DSCs accounting for around 51% of this figure**.

* Xerfi Precepta study Le marché des smart buildings et ses nouveaux défis, November 2023

** Numeum half-yearly conference, December 2023

Pascal Zératès, CEO of Kardham Digital.