Digitalization and servicification of the building industry

3E brought a clear message to REALTY and the EHPA’s DecarbHeat Forum: The digitalization of the building industry will rapidly cause a servicification of the entire sector, both for technology providers as well as real estate developers.

In the past, main economic revolutions often occurred when new energy regimes coincided with new ways of communication. The oil-powered combustion engine was accompanied by the telephone as a communication platform, the steam engine allowed automated printing technology to create a literate workforce, and even the agricultural revolution only occurred because at the same time in history people developed speech to transfer their knowledge.

Today, the development of new energy systems, and specifically in buildings colliding with a rapid digitalization of products might bring a similar model shift in the building sector: the transition from a product-based siloed sector to an integrated service-based building industry.

The impact of this transition cannot be underestimated. “Real estate is evolving from a typically capex driven sector towards an industry where “comfort as a service” might become the crucial value driver. In this respect, there is a future for concepts like total cost of ownership (TCO) and performance based services. Internet of Things together with new standards like the WELL-standard are clear enablers of this evolution”, stated 3E’s senior strategy expert Antoon Soete.

At the same time, “Connecting the digitalization of HVAC processes to the service approach in different related energy sectors may result in the ultimate integrated service” stated Ruben Baetens, 3E expert, invited to present the closing note of the DecarbHeat Forum. “Heat is probably the cheapest source of flexibility for the electricity grid and will become the driver in a ‘platform revolution’. While today we see components like heat pumps in a B2C product market, the digitalization of heat could result in a B2B service market where the provision of a healthy indoor environment as a service is directed by the energy sector as part of their operational optimization.

If you are interested in a more detailed discussion on what this servicification of the building industry might mean for your own business, feel free to contact us through the contact form below.