Building as a Service: Why the Smart Office Is Becoming a Competitive Advantage

Companies are forced to create conditions that can compete with the comfort of remote work, offering a high level of service, convenience, and uniqueness of the office environment. This level of comfort is provided by “smart” buildings. The global smart buildings market reached $103 billion in 2024 and continues to grow. The global Smart Buildings market is showing steady growth and is developing actively under the influence of technological innovation, increasing attention to energy efficiency, security, and sustainable development.

The market is segmented by type of use: residential, which accounts for about 27.2% of the global market (due to the growing importance of residents’ comfort and safety), and commercial, whose share is approximately 51.7% of the market. This is because commercial buildings consume a significant portion of energy, and the integration of IoT sensors and building management systems makes it possible to improve energy efficiency.

From a geographic perspective, North America holds the largest share of the global market (about 38.7%). The United States is the leader in this region thanks to its developed technological infrastructure and large-scale deployment of smart building solutions. The Asia-Pacific region is the fastest-growing. Its development is driven by urbanization, economic growth, and investment in intelligent infrastructure in China, India, Singapore, and other countries.

The global smart buildings market includes both global companies and local players, as well as startups. Key companies include ABB, Intel Corporation, Microsoft Corporation, Hitachi Ltd., IBM, Honeywell, Siemens, Johnson Controls, and Huawei. Growth factors include the following: the development of Internet of Things (IoT) and artificial intelligence (AI) technologies; growing interest in sustainable construction and energy efficiency; tightening environmental standards and government initiatives to support intelligent infrastructure; the development of cloud computing and Big Data to optimize operating costs and forecast problems.

Based on the “smart home” concept, the “building as a service” model has emerged, representing a new industry standard. In today’s environment, the value of commercial real estate is determined not by square meters, but by the quality of technological infrastructure, which directly affects key business metrics: operational efficiency, compliance with ESG requirements, and the ability to attract and retain highly qualified specialists. This factor remains crucial even amid a cooling domestic economy and businesses’ efforts to optimize costs. “Building as a service” is no longer an experiment, but a new norm—a model in which a tenant gains access not merely to space, but to a suite of technological solutions. A unified system manages climate, lighting, and security across different workspaces, enables booking meeting rooms and parking spaces, collects data, and provides analytics.

The main advantage of the service approach is that users do not need to dive into technical details. To create a comfortable microclimate, it is enough to set the desired parameters, and the “smart” system will independently adjust air conditioning, heating, and humidification. For such services to work, deep integration of information and communication technologies and engineering systems is important, which, in turn, depend on the building’s architectural and structural features.

Operating “smart” buildings provides advantages both immediately and in the long term. Among the “quick” effects are reduced operating costs, a high level of comfort, and convenience in using services. Long-term effects include extending the “life” of buildings. In addition, businesses that orient their practices toward sustainable technologies inspire greater trust among customers and partners.

Investor and regulator requirements in the area of environmental, social, and governance responsibility (ESG) are becoming a mandatory element of corporate strategy. Real estate assets with strong ESG performance demonstrate increased investment attractiveness. Studies confirm that such buildings can attract 10% more investment compared to traditional assets.

Author: Doctor of Economics, Professor, Department of World Economy and World Finance, Financial University under the Government of the Russian Federation Marina Borisovna Medvedeva.