Intelligent and Integrated Building Technologies Market Size in

Intelligent and Integrated Building Technologies Market Size in North America 2010 Ken Gallinger, Marketing Director Continental Automated Buildings Association (CABA) **

CABA Board of Directors 1. Bell Canada – Chairman Martin Cullum 2. Tridel Corporation – Vice-Chair Leo Del. Zotto 3. Honeywell International – Vice-Chair Roy Kolasa 4. Alcatel-Lucent - Lindsay Ellis 5. BAE Systems - Steve Teubner 6. Convia, A Herman Miller Company – Randy Storch 7. Direct Energy LP - David Dollihite 8. Hydro One Networks Inc. - Tom Semler 9. Ingersoll Rand - Randy Amborn 10. Institute for Research in Construction, NRC - Morad Atif

CABA Board of Directors 11. Intel Corporation – Shahram Mehraban 12. Microsoft Corporation - Jonathan Cluts 13. Monster Cable Products Inc. - Noel Lee 14. Philips - Dr. Satyen Mukherjee 15. Procter & Gamble - Orly Cocco 16. Siemens Building Technologies, Inc. – Brad Haeberle 17. Vantage/Legrand - Andrew Wale 18. Whirlpool Corporation – Joseph Lui 19. CABA - President & CEO – Ron Zimmer

CABA Vision “The knowledge-based forum for industry leaders who advance the use of technology and integrated systems in the global home and building industry. ”

Intelligent and Integrated Building Technologies Market Size in North America 2010 Research completed by Sponsors To view video: CLICK HERE (http: //companyflix. com/videos/play. php? video=v 23404)

Better Tenant and Common Area Experience High Speed Internet / Wireless Services and Technologies Ambient Music / TV Audio – Video Conf Voice Communications Visitor management Interactive media Digital signage Facilities Management Copyright ® 2007 The Fourth Utility, LLC All Rights Reserved.

Reducing Building Cost Lighting Elevator HVAC Fire Video surveillance Access Energy Copyright ® 2007

Smarter Building / Property High Speed Internet / Wireless Lighting Ambient Music / TV Elevator Audio – Video Conf 24/7 Monitor IP Telephony HVAC Fire Visitor management Video surveillance Interactive media Digital signage Access Future Applications Energy Copyright ® 2007 The Fourth Utility, LLC All Rights Reserved.

Commercial Buildings Energy Use Source: 2008 Department of Energy Buildings Energy Databook

Typical Building Cost Over A 40 Year Life Cycle

$20 Billion Systems* Market 2009 $8. 5 Billion Market for Products* (incl. cable & cabinets) 2009 * * Systems = Product + Value Add (Engineering, Commissioning, Installation) excluding maintenance Products = Hardware, Software, Cable and Cabinets at first point of distribution prices

Definition of Convergence is to bring together autonomous systems onto a common communication platform within the business enterprise and create a single unified solution Network = Ethernet Cat 5/5 e/6 and/or fiber BMS structure IT network/ backbone

Two Main Drivers of Convergence 1 Energy and building performance Ø Energy savings and efficiency 2 Security Ø Higher level of security (physical and IT security converged) Ø Efficient data sharing Ø Improve building performance (better decisions) Ø Remote access Ø Reduce maintenance costs Ø Improving storage Ø Increase the value of the building/rental revenues Ø Access cards a requirement Ø Link data sharing between departments

Who Is Driving Convergence? BMS - Large projects 90%-100% converged at management level (Ethernet) - IT convergence not perceived a benefit by many BMS suppliers IT - IT suppliers keen to drive IT convergence: - Cisco: Mediator and hardware - IBM: software, consultancy and Master SI - Oracle, HP, Plexus, etc. offer software/advice Security - Integrated in BMS offering - Driven by IT (hardware, cabling suppliers/channel) - Security SI/installers high end drive it

Who Is Driving Convergence? Energy rating schemes - Most converged buildings are in US - LEED silver/gold/platinum Political/ economic factors - International pressure to reduce CO 2 - Government funded projects - Buildings consume 70% of electricity and 40% of primary energy End-users - Pressure from society and clients to have a green profile - Reduce energy costs - Improve building performance and management A driver for convergence, but not necessarily IT convergence

Definition of Integration is to add value by joining or linking different building services products However nearly all integrated solutions are also converged at least at management level - many also at control level Service layer (IP provider) Management level (Mostly IP) Automation/control layer (IP/BACnet/LON/proprietary)

Development of Integrated Building Management Systems (IBMS) Integrate with sub-systems Integrate with other BAS Integrate with other enterprises systems Integrate with other systems Open Standards Enabling Convergence

Number of Projects How Quickly Will Integration Grow? Hurdles: • Too much customization • Lack of standard applications • Ability to demonstrate and convince the clients on ROI Time

Total System Market $20 Billion 8% converged (IT) only 34% integrated and converged BMS 21% on a separate BMS infrastructure 2% integrated only • 56% = stand-alone • 44% = integrated and/or converged IT 13% on the IT network/backbone

Stand-Alone vs. Integration/Convergence by Product Area, US$ Million, 2009 • Stand alone is high for lighting, intrusion and fire (~90%) • IT convergence only – 25% for CCTV, 6% access • Integration and convergence high for BMS (54%) and access (45%)

Forecast 2009 – 2013 % Split by Stand-Alone vs. Integrated and Converged

Key Market Drivers and Trends • • • Energy saving applications Open system Integration and IT convergence Increase in energy retrofit Consolidation will continue Compete in the knowledge in buildings and BAS applications • Controls contractors migrate to system integrators

Key Market Drivers and Trends Current drivers: 1. Energy management – More function to reduce energy consumption – Data visualization software and enterprise dashboards – Integrate smart meters – Energy monitoring, reporting and analysis service 2. LEED and Energy Star Label 3. Energy Legislation and codes 4. Government stimulus Long term driver: 5. Smart grid development – Monitor consumption and track min. and peaks – Automatic demand response and demand modeling

Smart Grid - Definition • An intelligent electricity system that connects all supply grid (utilities) and demand elements (end-users) through an intelligent communication system

IBC Markets Will Rebound • • Depressed economy, lack of credit, increasing building vacancies Fall in new construction, delayed refurbishment and retrofit However, IBC* markets have outperformed Economic stimulus will help boost demand – particularly public sector IBC* markets expected to return to growth late 2010/early 2011 * Intelligent Building Controls USA US$ Bn. • Source: Economist/ US Census Bureau Canada Source: Stat. Can

Key Findings Environmental (HVAC) Building Controls • The market will compete in applying BAS to tackle climate change issues • Companies need to obtain and disseminate both controls and IT knowledge Lighting Controls • Huge savings and market potential • Consolidation to provide total lighting solutions and more integration • LED lighting is a growing market but controls required for better efficiency Security Systems • CCTV / Video surveillance setting the pace, followed by access control • Strong movement towards IP systems and integration of security systems Fire Detection and Alarm • Robust, growing market, driven (and constrained) by codes and regulations • Demand for better evacuation solutions will drive integration of nascent mass notification / voice evacuation market

End-User Sectors § Top vertical markets: - Education 13% - Offices 12% - Central / Local Government 11% - Health 9%

Intelligent Buildings

YOUR INFORMATION SOURCE FOR HOME & BUILDING AUTOMATION Continental Automated Buildings Association 1173 Cyrville Road Suite 210 Ottawa ON Canada K 1 J 7 S 6 caba@caba. org www. caba. org Phone: 613. 686. 1814 Fax: 613. 744. 7833