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INOM TEKNIKOMRÅDETEXAMENSARBETE INFORMATIONSTEKNIKOCH HUVUDOMRÅDETINDUSTRIELL EKONOMI,AVANCERAD NIVÅ, 30 HP

, STOCKHOLM SVERIGE 2017

Internet of Things architectures for the Buildings of Tomorrow

A projection on the upcoming IoT-landscape in buildings

MARKUS RENSTRÖM

KTHSKOLAN FÖR INFORMATIONS- OCH KOMMUNIKATIONSTEKNIK

Internet of Things architectures for the Buildings of Tomorrow

A forecast on the evolution of IoT in buildings

Markus Renström

Master of Science Thesis INDEK 2017:117KTH Industrial Engineering and Management

Industrial ManagementSE-100 44 STOCKHOLM

Abstract

Master of Science Thesis INDEK 2017:117

Internet of Things architectures for the Buildingsof Tomorrow

Markus Renström

Approved

2017-06-05

Examiner

Pär Blomkvist

Supervisor

Commissioner

Fortum Värme

Contact Person

Gunnar Borgström

Fabian Levihn

The rapid development of technology can be seen in almost every sector of thesociety. Normal ordinary home appliances and everyday items can be embeddedwith Internet connectivity and sensors to create better functionality and perfor-mance. The data sharing and collaborating between systems and devices is knownas the "Internet of Things" (IoT). One industry where IoT is expected to havegreat potential is the building sector, often referred to as "smart buidlings". Cur-rently there is no standard methods for communication between facility and utilitysystems. The aim of this report is to investigate if a standard for communicationbetween di�erent systems, such as heating and ventilation will be reached within�ve years. Empirical data have been gathered from qualitative interviews with rep-resentatives of market actors, ICT-companies and experts in the �eld and literature.The report provides a forecast of how IoT-architectures in buildings can develop inthe future. The study also includes areas related to theories such as dominant de-sign, forecasting, openness and inter-industry collaboration. The report shows thatmarket actors in building technology and automation expects many advantages ofsmart buildings. In addition, the study found that a reluctance exists among theconsumers to invest in IoT within buildings. There is a lack of clear economical ex-amples of functioning smart buildings and return of investments-models. The mainconclusion of this study is that no pervasive standard for interaction will exist inbuildings within �ve-years. In a longer perpective, the development trend will betowards technology agnostic platforms where systems, resources and suppliers caninteract indirectly through the platform. A forecast over the next few years is thatdi�erent inter-industry cooperation will be formed and early attempts to establishpersuasive IoT platforms will be made in the building sector.

Keywords: IoT, Internet of Things, architecture, IoT-Platform, buildings, LP-Wan.

Referat

Examensarbete INDEK 2017:117

Internet of Things architectures for the Buildingsof Tomorrow

Markus Renström

Godkänt

2017-06-05

Examinator

Pär Blomkvist

Handledare

Uppdragsgivare

Fortum Värme

Kontaktperson

Gunnar Borgström

Fabian Levihn

Den snabba utvecklingen av teknik och digitalisering kan ses i nästan alla sektorerav samhället. Vanliga hushållsmaskiner och vardagsföremål kan utrustas med in-ternetuppkoppling och sensorer för att skapa bättre funktionalitet och prestanda.Samarbetet mellan uppkopplade system och apparater benämns ofta som "Saker-

nas Internet" eller "The Internet of Things (IoT)". En bransch där den digitalautvecklingen och IoT spås ha en stor framtid är inom byggnader, ofta kallat "smarta

byggnader". I dagsläget saknas standardmetoder för kommunikation mellan drift-system i byggnader. Målet med denna raport är att undersöka om det inom enfemårsperiod kommer att ha etablerats en standardmetod för kommunikation mel-lan olika system som t.ex. värme och ventilation. Med hjälp av intervjuer medrepresentanter för marknadsaktörer, ICT-företag och experter inom området samten litteraturstudie ger rapporten en prognos om utvecklingen av IoT-arkitektureri byggnader. Studien inefattar även områden relaterade till dominant design, fore-casting och branchöverskridande sammarbete. Rapporten visar att marknadsak-törer inom byggnadsteknik och IoT-lösningar ser många fördelar med smarta byg-gnader där system kan interagera och samarbeta. Vidare fann studien att det�nns en ovilja bland köpare att investera i IoT i byggnader samt att det �nns enavsaknad av tydliga exempel på ekonomisk återbäring för investeringar i smartabyggnader. Den viktigaste slutsatsen av det här arbetet är att det inte kommer�nnas en genomgripande standard för interaktion mellan system i fastigheter inomfem år. I ett längre tidsperspektiv kommer utvecklingen gå mot teknikagnostiskaplatformar där olika system, resurser och leverantörer kan interagera med varandraindirekt. Prognossen de närmsta åren är att olika branchöverskridande sammar-beten kommer skapas samt primitiva försök till helomfattande IoT-platformar.

Nyckelord: IoT, Sakernas Internet, arkitekturer, IoT-platform, byggnader, LP-Wan.

Acknowledgement

First of all I would like to express my graditude to my supervisors, FabianLevihn and Gunnar Borgström for their guidance and continuous suportthroughout the entire project. I would also like to thank Fortum Värme forthe opportunity to conduct this research about a highly interesting topic.Finally I wish to thank and express my gratitude to all the interviewees whohave generously participated in this study with both time and knowledge.Thank you!

Markus RenströmStockholm, June 2017

Acronyms and Abbreviations

API Application Programming Interface

BAC Building Automation Controll

BMS Building Management System

HVAC Heating Ventilation and Air Condition

IoT The Internet of Things

LPWAN Low Power Wide Area Network

M2M Machine-to-Machine

PLC Programmable Logic Controller

ROI Return On Investment

ICT Information and communications technology

TSM Trusted Service Manager

TSO Trusted Service Operator

Big Data Large and complex data sets, which can be processed to gainknowledge and insights.

Embedded system A single purpose computer system.

Smart building A building equipped with IoT for the purpose of Buildingautomation.

Smart device An item or device equipped with an embedded system. TheInternet of Things are based on smart devices.

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Contents

1 Introduction 11.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Problematization . . . . . . . . . . . . . . . . . . . . . . . . . 31.3 Theoretical Contribution . . . . . . . . . . . . . . . . . . . . . 31.4 Research Statement . . . . . . . . . . . . . . . . . . . . . . . . 41.5 Fortum Värme . . . . . . . . . . . . . . . . . . . . . . . . . . 41.6 Boundaries and Limitations . . . . . . . . . . . . . . . . . . . 4

2 The market of IoT 72.1 The Internet of Things Phenomena . . . . . . . . . . . . . . . 72.2 Major actors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2.2.1 Telecommunication Operators & Internet Providers . . 122.2.2 IT & Software companies . . . . . . . . . . . . . . . . . 122.2.3 Utility management companies . . . . . . . . . . . . . 132.2.4 Network companies . . . . . . . . . . . . . . . . . . . . 13

2.3 Stakeholders and Systems Analysis . . . . . . . . . . . . . . . 14

3 Theory 183.1 Communication methods in IoT . . . . . . . . . . . . . . . . . 18

3.1.1 ZigBee and Z-wave . . . . . . . . . . . . . . . . . . . . 203.1.2 LPWAN . . . . . . . . . . . . . . . . . . . . . . . . . . 203.1.3 ICT in buildings . . . . . . . . . . . . . . . . . . . . . 213.1.4 Forecasting and Strategic Planing . . . . . . . . . . . . 23

3.2 Business Collaboration and Openness . . . . . . . . . . . . . . 243.3 Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

4 Methodology 274.1 Data gathering . . . . . . . . . . . . . . . . . . . . . . . . . . 274.2 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . 284.3 Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284.4 Forecast Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . 30

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4.5 Quality of the study . . . . . . . . . . . . . . . . . . . . . . . 334.5.1 Validity . . . . . . . . . . . . . . . . . . . . . . . . . . 344.5.2 Reliability . . . . . . . . . . . . . . . . . . . . . . . . . 344.5.3 Generalizability . . . . . . . . . . . . . . . . . . . . . . 35

4.6 Method discussion . . . . . . . . . . . . . . . . . . . . . . . . 35

5 Empirical Study 375.1 Perceived values of Smart buildings . . . . . . . . . . . . . . . 375.2 Dominant designs & Emerging technologies . . . . . . . . . . . 405.3 Impeding factors for the technology . . . . . . . . . . . . . . . 40

5.3.1 Compatibility . . . . . . . . . . . . . . . . . . . . . . . 415.3.2 Security . . . . . . . . . . . . . . . . . . . . . . . . . . 415.3.3 Complexity . . . . . . . . . . . . . . . . . . . . . . . . 425.3.4 Cautiousness & Unmotivation . . . . . . . . . . . . . . 435.3.5 Privacy & Legal . . . . . . . . . . . . . . . . . . . . . . 43

5.4 The future of IoT . . . . . . . . . . . . . . . . . . . . . . . . . 44

6 Analysis 456.1 Testing the Research Statement . . . . . . . . . . . . . . . . . 45

7 Closure 477.1 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477.2 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487.3 Future research . . . . . . . . . . . . . . . . . . . . . . . . . . 49.1

Appendix A: interview framework . . . . . . . . . . . . . . . . 56

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List of Figures

2.1 A simple abstraction of how the Internet of Things can be seenin building from an energy company's point of view. . . . . . . 8

2.2 A simple illustration of the stakeholders in this report. Notethat there's a relatively linear relationship among the di�erentstakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

3.1 A map of how the communication infrastructure might look ina modern house today, the colors represents di�erent systemsand service providers. Observe that there is a general lack ofcommunication between various systems. . . . . . . . . . . . . 19

3.2 A map presenting the relationship between bandwidth and com-munication range for some of the most common communica-tion techniques. . . . . . . . . . . . . . . . . . . . . . . . . . . 20

3.3 A graph illustrating the correlation between time and certaintywhen forecasting. Notice how the uncertainty increases as thescenario zone is adapted further away in time. . . . . . . . . . 23

4.1 A simple drawing which shows the role of a Trusted ServiceProvider (TSO) and its role to combine service providers withthe resources in a building. . . . . . . . . . . . . . . . . . . . . 32

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List of Tables

2.1 Potential actors in the IoT-market which can become majorplayers for IoT-solutions in buildings. Note that the Hardware& Embedded systems is outside of the report's scope and notcovered. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

2.2 A table describing the di�erent stakeholders which will be af-fected by smart buildings and in what way. Worth noting alsois that energy companies in Sweden are often owned munici-pally (e.g Fortum Värme is partly owned by the municipally ofStockholm). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

4.1 An overview of the respondents of this study. . . . . . . . . . 294.2 An overview of the anonymous respondents of this study. . . . 30

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1 | Introduction

The �rst chapter of this report presents the background to this study. Theproblem and the expected theoretical contibution of this paper will also bedescribed and motivated along with an explanation of the limitations anddelimitations which have been used through the thesis.

1.1 Background

The technological evolution in the Information and communications tech-nology (ICT) sector is constantly progressing [1]. Computers, smart phonesand the Internet have since its quite recent introduction evolved into be-coming a central part of our everyday lives. The digitalization trend havea�ected almost every industry and sector in our modern society, driven bythe advancements in hardware and software. The technological progressionhave made it possible for manufacturer to create electronic components withhigher performance, smaller size and lower energy consumption, often with-out increasing the cost [2].

The currently ongoing digitalization trend is in many aspects a paradigmshift in the computing industry [3]. Besides computers, smart phones andnew high-end products there's other important factors. The Internet con-nections are getting faster and the amount of connected devices are steadilyincreasing. Cloud computing have made it bene�cial to move computationsand data storage to the web. The cloud technology together with big datascience and machine learning have furthermore made it possible to handleand analyze large data sets which have made data both useful and valuablein the modern world [4].

The ability to manage data as well as improvements in hardware andsoftware have made it possible to create embedded systems with great func-tionality. Embedded systems with sensors and networking abilities can beadded to everyday items to increase functionality or performance, these areoften known as smart devices. Having a set of smart devices interacting is

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known as The Internet of Things, commonly just abbreviated IoT. The Inter-net of Things is an umbrella term without any commonly accepted de�nitionwhich restricts and regulates the systems [5, 6]. IoT involves everything fromhardware components, communication protocols to the logical solution andfunctionality. Moreover the IoT-technology spans over many di�erent disci-plines in computers science (e.g. embedded systems, distributed systems anddata-mining/machine-learning). The fact that there is no common technicallimitation is is clearly illustrated in the quote below:

"What is highly interesting with this technology trend is that it ismore de�ned by what its enables rather than the technology itself"� Fabio Campi [7]

The IoT concepts is believed to be one of the next major paradigm shiftin computer science [5, 6]. Most projections estimates that the Internet ofthings will a�ect most industries, sectors and the way we live our everydaylives [8]. Everything from aviation to entertainment is currently seing thedigitalization trend which carries the IoT-technology. The use of sensorsand actuators in smart devices along with the data exchange can reducesthe gap between the real world and the digital technology. Electronics withmore understanding of the surrounding environment and its context can bemade with higher autonomy and create a more ubiquitous, user centric ex-perience [9, 10].

One area where the IoT-technology is considered to have a lot of potentialis buildings and smart homes. A major part of our modern lives is takingplace indoors, thus even small changes can have large impacts. Smarterelectronics have the ability to make our living more comfortable and moreuser-centric [9]. Facilities and buildings also stands for a large part of theglobal carbon emissions. With a growing global population and a steadilyincrease in the number of electronics devices energy e�ciency is becomingmore important [11]. The growing concerns regarding the greenhouse e�ecthighlights the importance of delimiting waste and streamlining the energyconsumption. IoT technology and smart buildings is believed to be toolfor streamlining energy usage and improving the utility services [11, 12].Furthermore smart buildings can also play a part of the concepts smart gridsas well as smart cities [13]. For an energy and district heating company suchas Fortum Värme IoT is a potential tool for streamlining energy usage andcreating new product o�erings.

The rapid development of IoT is not without problems, the great widthof the concept and the vast amount of actors involved creates compabilityand communication issues [6]. Several standards exists for storing data, man-aging communication and establishing security. Most utility systems inside

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modern buildings are today avaliable with both Internet connectivity andwith simpli�ed user interfaces for easier interaction [12, 14, 15]. The dif-�culty is to establish interactivity and coordinated actions between severalsystem. Since the core of the Internet of Things are interactivity and datasharing, issues which limits the devices ability to communicate e�ciently areof critical importance.

Traditionally the utility systems in a building have been of modular na-ture, with a �xed functionality for each system, often completely seper-ated from eachother. The digital transformation which strives for a moreubiqutious and context-awareness future will however require more collabora-tion between di�erent utility systems and the market actors behind them [9].

1.2 Problematization

The Building sector is one sector which is believed to be highly a�ected bythe technological advancements and the Internet of Things. So called smartbuildings could potentially solve various problems and increase e�ciency inheating, energy consumtion and comfort. Having various system commu-nicating and cooperating inside buildings could lead to streamlined utilityservices and more user centric experiences. However, the Internet of Thingsis still in its infancy and there are several problems which impedes the evo-lution. The lack of standards and unity between actors when it comes tosmart buildings (building automation) makes interactivity between systemsproblematic. Investigating how various market players sees the future, theproblems and solutions can thus give an indication were the future is headed.To better suit an academical research the background have been used to cre-ate a concise problem description which have been formulated as following:

The technical progress is moving forward in the building managementsector, but there's currently a lack of common standards and solutions

which enables interactivity.

1.3 Theoretical Contribution

The Internet of Things is a term which have received a massive hype duringthe recent years and the market is expected to have a major growth in thenext couple of years [16, 17, 18]. Plentiful of academic material have beenproduced about smart buildings and IoT standards but there is little researchdone where these two areas are combined, togheter with a future perspective.This study focus on investigating how the Internet of Things will evolve in

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buildings for the next �ve year period with focus on the architectual designof the systems and dominant standards for communication. Five years iscommon time length for strategic long term planning [20] and therefore thisreport could also be used as a base or pre-study for decision making.

The purpose of this study could also be seen from two perspectives, anacademic and an industrial. From the academic perspective the study aimsto increase the knowledge about IoT in buildings and discuss how it mightevolve in the future. From the industrial perspective the study aims to actas a pre-study or underlay material for companies interested in smart homes.

1.4 Research Statement

In order to analyze and contribute to the problem the following researchstatement have been formulated and investigated:

There will be a standard method to communicate for utility and

facility systems in buildings within �ve years.

1.5 Fortum Värme

To give a more accurate view of the problematization and add �rst handinsight to the subject the study have been conducted at the local energycompany Fortum Värme in Stockholm. Fortum Värme is a producer ofelectricity, district heating and district cooling and experiences the samedigitalization transformation as most utility companies and service providersin the property market. The company is co-owned with the city of Stockholmand places high value on sustainability and renewable energy, with severalgoals and milestones ahead. The paradigm shift towards digitalization isone trend which Fortum is investigating to �nd potential bene�ts for thecompany as well as their customers. Having a company participating in thestudy is a good source of information and knowledge, furthermore it can helpthe study hold a certain degree of industrial relevance.

1.6 Boundaries and Limitations

To ensure that the results of this study are valid and reliable certain delimi-tation have been made and a scope has been de�ned. The scope of the studyis to investigate how IoT-systems will evolve in buildings in an approximately

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�ve year future. Five years is a relatively common period for strategic plan-ning and changing the time perspective can lower the value of the projectionsor increases the uncertainty [20]. The target of the scope is mainly buildingsin the Swedish market. The reason behind this delimitation is the factorof time, looking at several countries could result in a broader research andlesser academical "depth". Investigating multiple nations could also resultin national variations having to be considered and analyzed which in itselfcould become a major task. However literature and case-studies covered inthis paper isn't necessary limited to Sweden, since the studied phenomenacan be seen as a global trend and a lot of information and knowledge can befound all over the world.

Certain delimitations have been made to increase the focus of the study.IoT-architecture is a broad term which involves everything from hardwarecomponents, communication protocols to the logical solution and function-ality. As a result one delimitation in the study is to use a more abstractview on a IoT-system with more focus on the systems generall architectureand communication between smart devices. Partly because there's currentlyinteroperability issues amongst smart devices and a lack of standards [6] andpartly because of the great complexity of the entire system. Therefore othercomponents in a normal IoT-architecture is only partly covered in this study.Furthermore only the major communication protocols and techniques is cov-ered in the report to save time. The covered communication technologieshave been selected for their unique characteristics and with the help fromearly interviews, the digital development team at Fortum Värme. By savingresources it becomes easier ensure that the study can reach a deeper aca-demic focus. It might also be a di�cult and daunting task to have a broadinvestigation about how hardware and software solutions will develop in thenext �ve years. Especially since there's often a lack of de�nitions and overlapbetween components in the ICT-sector (for example, the di�erence betweencommunication protocols and techniques can be minimal).

The research have also not interviewed any end-customers (residents andusers of the facilities) since the input provided would bring little value to thestudy compared to market actors. Residents in apartment houses might nothave any contact with the utility or energy service providers and will mostlikely hold low knowledge about IoT. The study will also not look deeper intothe economical aspects of IoT in smart buildings, it would bring unwantedcomplexity to the study and the reliability of the economical results wouldbe poor.

Worth noting is the author's of this thesis academical background orig-inates from a combination of IT and industrial management. Hence, thestudy will not cover deeper analyzes regarding building or energy distribu-

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tion. Only basic information and minor examples will be presented throughthe report to minimize the risk of inaccurate information. For the samereason (and in order to save time) the report will neither look into the le-gal aspects regarding the subject or make a deeper ethical analyzis in thesubject. The fact that laws and regulation often lag behind when new inno-vations and technologies are introduced also diminish the utility of coveringthese aspects in the report [21]. Integrity and the ownership of personal datais for example one area where there's a lag.

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2 | The market of IoT

This chapter aims to describe the current state of the IoT-technology in build-ings and presents some of the major problems, actors and stakeholders in theindustry. Furthermore the chapter present a brief explanation of the driveforce and motivation for the di�erent actors. Finally the chapter will identifysome of the largest concerns which the technology faces.

2.1 The Internet of Things Phenomena

The emerging digitalization trend known as the Internet of Things is believedto a�ect almost every industry [7]. District heating and buildings are noexception were smart technology is expected to achieve many advantages andopportunities such as better energy e�ciency and comfort for the users [11].The term IoT is a rather vague de�nition and is more de�ned by what itsenables rather than the technology itself. At the heart of the concept isthe interactivity and data sharing between machines and everyday items,usually over the Internet [23]. With a large amount of small devices withsensors and acuators wich enables the the IoT-devices to sense and interactwith the environment. Having various systems with di�erent functionalityinteract can enable a more user centric and ubiquitous experience for thepeople using the building [9]. The data collected from smart devices couldin turn be used for new business opportunities or data-mined to gain moreinsights.

The lack of formal de�nitions in the IoT �eld regarding which componentsand standards that are reuired can be seen in many new IT trends. Big data,data mining and machine learning are for example other technology trendswhich lacks formally accepted de�nitions [24]. This might be a consequenceof the fast development in the ICT sector and an increasing amount of playersin the market [7]. Multiple actors often results in the development of severalstandards and parallel systems (this can be seen in Figure 3.1).

To establish a clear model of how IoT typically be implemented in build-

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ings a generalization is needed. When analyzing larger IT-system with lotsof connections and interactivity between nodes its often advisable to cre-ate simple models of the system. By creating an abstraction of the basicIoT-structure its possible to clearify problems and divide di�erent systems,standards and components for separate analysis. This is illustrated in Fig-ure 2.1 below which re�ects how IoT normally can be implemented in abuilding today from a single service providers perspective (in this case aheating company). Note that a current problem is often the communicationbetween smart devices and the lack of communication towards the building'sinternal control system. Since the purpose of this study aims to investigatefuture scenarios of the IoT-architecture and platforms as a whole the modelsused can be made with a high abstraction level. Keeping the model simpleand abstract is important to avoid unnecessary complexity and ensure thatthe research preserves resources by not going astray.

Smart Device

Smart Device

Smart Device

Smart Device

Control systemDUC Gateway

Stakeholder StakeholderStakeholder

USERS: Energy companies, Property owners and Housekeepers

Cloud Data Center/Storage

LEAVES: Every day items and sensors

HUBS: Control systems and Internet access

Figure 2.1: A simple abstraction of how the Internet of Things can be seenin building from an energy company's point of view.

The blue and red regions in Figure 2.1 are often located in the samebuilding but at di�erent places. The components in the red area is typicallylocated in utility rooms, basements or where they are shielded from unautho-rized access. The smart devices (in the blue region) can on the other handbe located almost everywhere in a building but is often placed in proximityto residents or users. Not all buildings are the same however, properties suchas size, type of building and age can all have an a�ect of how IoT should op-timally be implemented. This is an aspect not covered in this simpli�cation.

This study will investigate the communication among smart devices and

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control system (see the dotted line in Figure 2.1). Because of the greatvariation of manufacturers, communication techniques and devices existingin buildings today there is a major issue with communication [6]. Below is aquick description of the various components used in the abstraction:

• Sensors & Actuators (smart devices):The base of the Internet of things are the small embedded systems, sen-sors and actuators [6, 7]. The sensors makes it possible for the softwareto "see" the surrounding environment, for example which temperaturea room have. Having a large amount of devices or sensors communi-cating can allow the software to create a more through understandingof the real world and can interpret situations. With actuators the sys-tem might also be able to have ability to physically alter or a�ect thesurrounding environment.

• Communication:For Smart devices to be able to communicate with each other its impor-tant that they have a common communication technique (sometimescalled access technology) and a shared protocol1. Communication chan-nels exists in many forms and variants, anything from wired connectionwith the I2C -protocol to wirelesses communication with Bluetooth orWi-� [7]. Communication in itself isn't a physical component (althoughwires might exist) but its an important aspect to consider in the currentIoT-market. Various actors on the market supports di�erent communi-cation standards, sometimes with low level of interoperability [6]. Sincethe technology shift towards IoT is still in its infancy several standardsare proprietary. This have lead to several examples of system lock-in where smart devices and communication standards aren't able tocommunicate with other devices.

• Control System:Large buildings is often equipped with control systems for handlingthe variuos utility services. District heating system for example re-quires a control system (in Swedish Data Undercentral or DUC ) whichis responsible for handling and con�guring the heating. Depending onmodel and system, various functionality can be added to the system.The control system is in many aspects similar to PLCs (ProgrammableLogical Controllers) which is often used in industries, althoug wihtoutthe same real-time requirements. In short the control system for dis-trict heating collects data about the buildings environment and adjusts

1A typical anatomy of communication protocol in IT is human languages, if two persons

wants to communicate they both need to understand the same language

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the heating therafter. Modern heating controllers can have Internet ca-pabilities and can be accessed remotely to adjust settings or view data.

Large buildings with many control systems with di�erent functionalitycan also have a central building management system (BMS) (some-times refereed to as a building automation system (BAS)) which cancontrol and coordinate the entire buildings functionality. Controllingand optimizing the performance of a central BMS-system can in manyways be seen as an early steep towards a smart building.

• Gateway:In this abstraction model the gateway acts as the system's method togain access to the Internet and ultimately to send data and informa-tion to the Internet, a computer cloud or a database. The purposeof networks gateways are to let devices get access to other networks,often to share a common Internet subscription which is also the casein this abstraction. A gateway is also a natural place to insert securitymeasurements such as encryption. Potentially the control system andthe gateway be made into the same device but for simplicity they areseparated.

• The Cloud:Data gathered from the building is uploaded to the cloud for storageor processing. The data can then be used in data-mining or machinelearning to get new insights and discover potential trends or correla-tions [11]. The cloud could of course be replaced with any type ofstorage, for example a database server. Collecting and analyzing datafrom customers is a good method to �nd insights about the system andcustomers. Data can also be used to highlight ine�ciencys and discovercustomer with unoptimal setups.

• Users:The purpose and motivation of having smart properties is to achievebene�ts for the stakeholders. Property owners, house keepers and theenergy distributor can access information and use the data from thebuilding as well as invoke di�erent commands.

Note that this abstraction of an IoT-architecture is created to illustratehow IoT is typically is implemented in buildings and the limitations of thestudy (see Section 1.6). The abstraction model is fairly simple and standard-ized, its also based on a similar model used by Fortum Värme. If the studyhad chosen another focus areas or di�erent limitations the abstraction modelcould consist of other components or granularity.

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2.2 Major actors

To better understand the digitalization of buildings and the emerging IoT-technology its important to understand which actors are driving the devel-opment and for what reasons. The Internet of Things is often seen as thenext "big thing" and have received a lot of hype during the last couple ofyears. This can be seen in the IT-consultancy �rm Gartnér's annual Hypecycle where IoT and related terms have been well represented over the lastyears [16]. The new technology is believed to have a considerable a�ecton most industries and as a result plentiful actors are interested in the newemerging market. The vague de�nition of the IoT-concept is also a contribut-ing factor which makes it easier for many organizations to create their ownIoT-solutions [7]. As a result numerous companies have entered the smartbuilding market. Alongside the traditional companies already in buildingmanagement sector, IT-companies and start-ups can today be seen develop-ing digital building solutions.

Table 2.1 below presents some of the major actors and industries whichare believed to have the potential to be successful with IoT and smart build-ings. The table is a generalization with traditional companies involved withbuildings and energy management, already active in the market combinedwith ICT-actors whom have the IT-knowledge to implement IoT. The tableis designed to give a general idea on current industries and actors investing inIoT-technology. Its possible to expand and create a more detailed table withhigher granularity and more objects. Software companies could for examplebe divided into smaller categories such as cloud vendors, big data companiesor front-end developers. However, in this study the listed actors will su�cesince the task is to capture a general technology trend.

The hardware and embedded systems manufacturer are an important as-pect of the IoT evolution but outside the scope of this report . Furthermoreits unlikely that the hardware companies will a�ect the higher level of com-munication in the IoT-architecture by themself without a�ecting other actorcategories. For example, new hardware capabilities like LPWans and theupcoming 5G technology could a�ect the market to a high degree. However,the improvements in hardware will spill over and a�ect most other actorsas well (E.g. networking and telecommunication companies) and thereforehardware will not be covered separately in this report.

Table 2.1 gives a quick overview of actors currently involved in the IoT-market and their potential driving force. The table only gives a brief descrip-tion of the di�erent industries involved in IoT, for each of the mentionedindustries there's a vast amount of companies. Meaning that competition

11

exists among di�erent industries as well as within the industries. Sectors inthe table can also intersect and overlapp. Especially with larger companiessuch as Cisco,Huawei and Siemens whom can provide most kind of servicesand solutions, tailormade for speci�c customer.

The numerous companies and organization investing in the new IoT-technology have resulted in a wide spectrum of di�erent IoT solution andarchitectures. Often with interoperability problems between smart devicesand IoT products from other vendors. The lack of compatibility is believedto be one of the major impeding factors for the Internet of Things [6]. Inmany cases companies have created new standards in a combined e�ort. Forexample Google's Nest and the semiconductor company Freescale have to-gether with a handful other companies) created the communication standardThread [25]. In the same manner Intel, Atmel, Samsung, roadcom and Dellhave created the so called Open Interconnect Consortium, which is anothercompeting standard.

2.2.1 Telecommunication Operators & Internet Providers

The expected growth of the Internet of Things will result in many new de-vices connected to the Internet and a higher demand from Internet servicesproviders and operators. Enabling Internet connectivity to all smart devicesis in itself a great market opportunity. Internet service providers (ISPs) canalso be considered to have several natural bene�ts for investing in IoT andsmart buildings. The Internet access into the building is already availableand ISPs often posses capabilities and knowledge of handling larger amountsof data. Most household and companies in Sweden also have an existingagreement with Internet providers and telecommunication companies, thusan established customer base is already present.

Telecommunication operators will also experience a change in the tra�cpattern on the Internet and cellular networks due to the Internet of Things.Smart devices typically sends lower amounts of data, sometimes with longand irregular intervalls between transimision [26]. An example of how atelephone and Internet operators is investing in smart buildings is Telia,with their product Telia Zone. A broker platform which tries to interconnectdi�erent IoT system from various manufacturer [27].

2.2.2 IT & Software companies

The Internet of Things holds great opportunities for software companies,since software solution are needed to handle and analyze the generated data

12

from the smart devices. The smart devices in itself will also require soft-ware to function and to communicate. Many large IT-organizations such asGoogle,IBM and Amazon have all developed services for handling and ana-lyzing data. Currently most analytic tools and cloud services o�ered for anytype of IoT-system are provided by IT-companies.

The IT-companies have a more general interest in the Internet of Thingsand building automation is most likely only one of several large markets whichare considered to be of interest. Worth noting is that many IT-companiessuch as Google are targeting building automation from the end-users per-spective instead of the property owners with products such as the smartthermometer Nest and the smart assistant Google Home.

2.2.3 Utility management companies

Traditional utility management companies such as Siemens,Schneider Electricsand Danfoss are long time actors in building technology. The digitalizationof buildings have also a�ected the management systems in buildings. Mostmodern control system are today equipped with Internet connectivity and areprogrammable to give the opportunity to achieve a more optimized comfortor energy usage. For the energy management companies smart buildings andthe Internet of Things concept might not be seen as a radical innovation butmore of an incremental or architectual. Because many modern managementsystem are capable to become a smart if provided with an intelligent controlsystem wich utilize the rescources in a better way [31].

Management systems are an important aspect to create smarter buildingswhich can be seen in Figure 3.1 where more or less every service requiresor uses a management system to provide its services. The systems oftencontrols much of a buildings properties and can have major e�ects on forexample energy usage. Many organizations in the energy management sectorsis also large multinational actors (Siemens, Honeywell, ABB, etc.) with largecapabilities, resources and products in many �elds which are a�ected by IoT.Siemens for example have an division for building automation and one forthe Internet of Things.

2.2.4 Network companies

In similarity to the telecom companies and ISP's, the networking compa-nies business modell will bene�t from more connected devices. Actors suchas Cisco, Huawei and Ericsson o�ers products which can be used as thebackbone for the communication between all the connected devices. Net-works companies already process much of the infrastructure and know-how

13

to handle an increase in the number of connected devices. Most network-ing companies both handle hardware as well as software solutions to handlecommunication and accessibility.

2.3 Stakeholders and Systems Analysis

To establish a systematic approach and cover the technological shift froma broader perspective the essential stakeholders related to IoT in buildingsneeds to be considered. The value created by the new technology for thestakeholders acts as the driving force for actors and market players. Itsimportant to analyze and evaluate how IoT technologies and smart buildingcan a�ect stakeholders from di�erent perspectives.

To de�ne the value of smart buildings and which bene�ts that are asso-ciated for the stakeholders a short tabular have been created. Table 2.2 isa simple listing of the natural stakeholders which are believed to be a�ectedby smart buildings. The table have been created with the purpose to covera wider picture of the impact in smart buildings from many perspectives.By focusing more on covering many aspects, the tabular is made to be a bitsuper�cial and crude. I.e. by not diversifying between di�erent stakeholderswithin each category. The stakeholder categories mentioned in Table 2.2 canalso be described with linear relations, this is shown in Figure 2.2.

The natural fragmentation between the listed stakeholders can be used toact as an a system analysis model. By investigating each category separatelyits possible to get an understanding how the technology can a�ect individuals,companies and the society as a whole. Since the research is done partly froman energy company's perspective the stakeholders acts as a natural divider,otherwise its possible to use other theoretical frameworks.

Residents and Users

Implementing smart buildings will have an impact on residents and users,exactly how depends on the design of the implementation. In theory smartbuilding could increase comfort, lower energy consumption and provide amore user-centric experience [9, 14]. It could also result in less control overthe indoor environment if property manager or other stakeholders automat-ically or remotly controls HVAC-settings.

Property owners and Caretakers

Adding sensors and actuators to an estate could lead to service improve-ments [12]. Various utility system could be equipped with sensors for remote

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Users

Property owners & keepers

Energy companies

Cities, Regions, national, global…

Figure 2.2: A simple illustration of the stakeholders in this report. Note thatthere's a relatively linear relationship among the di�erent stakeholders.

monitoring and automatically alert when an error have occurred. Digitaliz-ing utility systems in a building could also be used for troubleshooting andpinpoint probable sources of the problem. Property owner could remotely geta full coverage of the property and its status and get real-time information.An owners with several buildings could thus be able to compare di�erentestates and benchmark performance.

Energy Companies

Smart buildings could be used to streamline the energy usage and create amuch more even distribution of heat and energy to the customers. Energydemand peak could be handled more e�ciently. Furthermore lowering energyconsumption in buildings may be a small part of switching to more renewablesources.

Cities, Regions and Globally

Smart cities are often mentioned as a future concept and an important tool toreduce the carbon emission and to counter the threats of global warming [13].Having environment friendly and e�cient energy sources can result in socialand economical bene�ts as well for the city as well as for the inhabitant.

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Industry Sectors Motivation

Telecommunication opera-tors & Internet Serviceproviders (ISP)

Provides the Internet service to the proper-ties and can bene�t from an increase in datatra�c. ISP's also have a broad customer baseand knowledge about data handling.

Software Companies IT-companies like Google,IBM and Amazonare all currently producing commercial andindustrial IoT products with the general goalof taking market shares. Cloud services anddata-analytics solutions are often providedby IT-companies.

Utility management compa-nies

The traditional actors when it comes to en-ergy and utility management in buildings.Many modern control system for managingbuildings already have much of the capabili-ties needed to become smart buildings. Thenew capabilities can bring new product o�er-ings and higher performing products.

Hardware & Embedded sys-tems manufacturer

Manufacturers of hardware and embeddedsystem are often the creator of smart devices.Pro�tability often depends on the number ofdevices sold and the companies often havelarge expertise in hardware solution.

Networking Companies Networking companies such as Cisco andHuawei produces networking equipment andwill bene�t from increased networking activ-ity. The lack of communication standard canalso be a motivation due to the possibility ofreaching a dominant design.

Start-ups and others The Internet of Things is a relatively newphenomena and its a market with relativelylow initial costs which enables for new andquick entrances to the market (e.g. see Rasp-berry Pi). Its also possible for actors to enterthe IoT market from other directions, such asproperty constructors.

Table 2.1: Potential actors in the IoT-market which can become major playersfor IoT-solutions in buildings. Note that the Hardware & Embedded systemsis outside of the report's scope and not covered.

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Stakeholder Impact

Residents and users More e�cient system (e.g. for heating andventilation) will lead to a more uniform tem-perature and improved performance. In caseof problems the troubleshooting can be doneremotely with faster response times for ser-vice.

Property Caretakers Sensors and smart software can aid in trou-bleshooting, act proactive and warn before aproblem becomes critical. Saving both timeand rescources for caretakers and janitorialservices.

Property Owners IoT could give an better overview and morecontrol to the owners. Owners could possiblyget access to real time data of the building.

Energy companies Smart buildings can provide the energy com-pany with more detailed information abouttemperature and the energy situation whichenables for energy optimization.

Cities An e�ective district heating system in a cityis also an energy e�cient and environmen-tal friendly method for heating. The conceptof "Smart Cities" where ICT and IoT solu-tion work together to manage the assets ofa city is highly dependent of smart buildingsfor success.

Regions & Globally Reduced energy consumption is a key factorto reduce the greenhouse e�ect. Buildingsstand for a large part of the carbon footprintand energy improvements by smart buildingsand cities may be an important aspect.

Table 2.2: A table describing the di�erent stakeholders which will be a�ectedby smart buildings and in what way. Worth noting also is that energy com-panies in Sweden are often owned municipally (e.g Fortum Värme is partlyowned by the municipally of Stockholm).

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3 | Theory

In this chapter theoretical background used in this project and the result of theliterature study will be presented. A brief explanation on how communicationis established between smart devices is given. Furthermore the industrialmanagement theories and frameworks used will be explained and motivated.

3.1 Communication methods in IoT

A cornerstone in the Internet of Things is interaction between di�erent de-vices and system. By letting various applications and systems interact, sharedata and be combined into a larger ecosystem bene�ts can be achieved [5, 9].To make communication possible between IoT-devices they must have com-patibility both in hardware and software.

For electronic devices to be able to have any communication they need tohave a common technology compatibility. The data from the sending devicemust be turned into signals and sent over a medium and the receiving deviceneed to be able to collect and interpret the signals to receive data. If datais transmitted through wires or radio-waves both devices needs to be able touse the same technology. The communication technology could be seen asthe method for communication, in a similar manner as humans can interactwith various methods (by phone, text-messages or face to face).

Smart devices also need to have a shared communication protocol whichdetermines the rules applied to the communication. A protocol determineswhat should happen if a message is lost during transmission, how data shouldbe packed, if there should be security in the transmission and so on. A simpleanalogy to communication protocols could be communication between twohuman individuals, the protocol could then be compared to the spoken lan-guage. Just as the interacting devices needs to have a compatible protocols,two individuals needs to have understanding of a shared common languageto understand each other1.

1These are only requirement for communication to be possible, noting more!

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Figure 3.1: A map of how the communication infrastructure might look ina modern house today, the colors represents di�erent systems and serviceproviders. Observe that there is a general lack of communication betweenvarious systems.

Di�erent communication alternatives varies in characteristics such as range,transmision speed and reliability which can be seen in Figure 3.2. NB-IoT(Narrowband IoT) and 3G/4G for example uses the GSM network and thushave increadible long range but depends on the device being able to accessGSM services to function [22]. To use GSM services the user needs to paya fee to the service provider, much like a normal person pays for telephoneservices to a mobile operator. Therefore its important to consider the appli-cation's purpose and speci�cations when deciding communication methods.For practical reasons not every technique is optimal to be used within build-ings. NFC only operates at a short distance (under 1 meter) which is to shortto cover an entire building. Most version of Bluetooth also operates undershort distances. Wi-Fi only supports a limited amount of channels and con-gestion can occur in buildings with many residents or users [28]. Adding annew Wi-Fi is therefore often undesirable and using an existing Wi-Fi might

19

not always be possible [50]. Furthermore the range is often to short to coverlarger buildings and the signals can be weakened by �oors and walls.

LoRa

Figure 3.2: A map presenting the relationship between bandwidth and com-munication range for some of the most common communication techniques.

3.1.1 ZigBee and Z-wave

ZigBee and Z-wave are two WPAN (Wireless Personal Area Network) proto-cols built upon the IEEE 802.15.4 standard [29]. Both protocols have supportfor building automation and o�ers a range of products for this purpose. The802.15.4 standard have a relatively good range but a low bandwidth whichcan be seen in Figure 3.2. Both ZigBee and Z-wave are developed by theZigBee alliance respectively the Z-wave alliance.

3.1.2 LPWAN

LPWAN or Low-Power Wide-Area Network is a set of wireless communica-tion technologies which is designed to allow communication over long dis-tances between devices(M2M) [30]. LPWAN's communicates trough a wire-less narrowband frequency which gives low data throughput but good energyconsumption and long transmission range. Depending on the type of LPWANits possible to have a range up to 10 km and battery time of 10 years [40]. Theusage of narrowband in LPWAN's also makes the technique strong againstinterference, meaning that the signals can pass through walls and obstacles

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easily compared to other wireless methods [28]. Looking at Figure 3.2 itseasy to see how LPWAN stands out compared to Wi-Fi (802.11) and thecellular technology (2G-5G) both in terms of range and in bandwidth.

LoRa & Narrowband IoT

LoRa is a type of LPWAN intended to handle large amounts of wirelessand battery powered "Things" in the Internet of Things concept. Originallydeveloped by the company Samtech but is now maintained by the LoRaAlliance. LoRa provides long range communication, often up to tens of kilo-meters depending on the environment with low power consumption [30]. Bat-teries are expected to last up to ten years in a LoRa-device, although batterytime is highly dependent on the device, battery manufacturer and environ-ment. LoRa is a relatively untested communication standard and no dataexists on scalability but its expected that tens of thousands devices shouldbe able to exists in the same in the same transmission range [44]. LoRacommunicates in simplex fashion, meaning that communication is only oneway. The reciever cannot establish a connection with the sender [40].

Narrowband IoT (often shortened NB-IoT) is a technology standard from3GPP (the 3rd Generation Partnership Project) which is a collaborationgroup for telecommunication companies. NB-IoT is a LPWan which resem-bles LoRa in both communication range and power consumption but it alsointegrates the cellular network.

Cellular

Cellular technologies such as 3G or 4G are today common access methods formobile devices to connect the Internet. Currently the next generation wire-less system, 5G is being developed and even though the technology isn't com-pleted many actors expects a large impact from 5G when its launched [47].

3.1.3 ICT in buildings

The Internet of Things is emerging in almost every sectors of society butthe form and technology used varies. Depending on purpose, constraintsand requirements for each particular case the design choice regarding theInternet of Things can vary. Vehicles, smart phones and home appliancesdon't have the same characteristics as facilities. There is also a large variationamong buildings when it comes to size, functionality and location. However,regardless of the di�erences among buildings there are still a lot of propertieswhich holds true for most facilities.

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To investigating the technology trends in buildings its necessary to under-stand which requirements and constraints that will a�ect the technology. Forexample buildings often have an extensive amount of walls and �oors whichmay limit the range of wireless communication. Jitter and congestions canalso exist in cetain frequency channels [28]. This can often be seen in apart-ment buildings where several adjacent Wi-� networks operates which causesthe quality of the communication channel to drop. Disturbances in the wire-less communication can result in high network losses. One method to solvethis is to use repeaters, a device which interprets a signal and re-transmitsit again with replenished signal strength. In large buildings repeaters areoften required to enable the wireless signal to reach the entire building. Be-cause buildings generally are of a large size, the communication range is animportant factor in smart buildings. With longer communication range itspossible to connect more devices directly to each other without having sig-nal repeaters or network devices in between. Avoiding or decreasing signalrepeaters, ampli�ers and networking equipment removes some possible errorsources and leads to lower costs.

Facilities is in almost every aspect a stationary unit, they don't move,seldom undergoes major changes and are connected to most utility services.Thus it might be possible to implement IoT-systems in buildings which relieson the electricity from the grid instead of battery. For the same reason itspossible to create rather stationary IoT-systems in the backbone (i.e utilityspaces) of the property.

Most buildings tends to be build to have a long life span compared tothe rapid life cycles of IT-technology which often spans over just a couple ofyears. Implementing a technology in a building therefore must be done withconsideration of the future. Having future compatibility and the possibilityto replace or update parts of the system could for example be good solutionsto reduce the risk of getting an obsolete smart building or a security risk.Another issue with the Internet of Things in buildings is the installation andreplacements of sensors, which may require residents or users to be involvedin the change. Depending on the sensor the installation might also requirespeci�c competence or certi�cation, this problem is however an aspect notcovered in this study (see Limitations in chapter 1.6).

Large buildings is often equipped with a centralized system which moni-tors and controls the environment of the facility, I.e heating, ventilation andair conditioning (shortened HVAC). Either with the aim of creating comfort,reducing cost or both [11]. These systems are often referred to as buildingmanagement system (BMS) or building automation system (BAS). The In-ternet of Things can provide much of the functionality of a BMS or BASbut with a much more distributed and more modular. E.g. It should be

22

possible to add smart devises with new functionality to a smart building aswell as replace parts of the system. Furthermore IoT-technology shouldn'tbe limited to large buildings.

3.1.4 Forecasting and Strategic Planing

Forecasting techniques are processes used to make prediction and estima-tions about the future. Forecasting is in many situations an important toolwhich can help executives and decision makers with material and informa-tion for di�cult or complex problems [32]. A great number of forecastingtechniques exists today, each with its special usage and optimal application.Its important to choose correct method for making predictions, depending onthe available information, purpose and the particular application. Di�erenttechniques vary in cost, scope and precision but some common attributes arethe same.

Essentially forecasting is an estimation and there is always a risk or un-certainty regarding how accurate the predictions are [33]. As shown in Fig-ure 3.3 the predetermined, known facts decreases and the level of uncertaintyincreases as time or complexity is added to the forecasted scenario. Higheraccuracy often comes at a higher price or sooner time period, a trade-o�which needs to be considered before deciding the scope of the projection.

Figure 3.3: A graph illustrating the correlation between time and certaintywhen forecasting. Notice how the uncertainty increases as the scenario zoneis adapted further away in time.

Basically there are three types of forecasting, qualitative, time series anal-

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ysis/projections and casual models [32]. This project uses a qualitative fore-casting approach where qualitative data is used to make projections. Be-cause the IoT-technology is an emerging trend and data is scarce, qualitativetechniques are preferred. Furthermore both time series analytic and casualmodels requires historical data to make valid projections.

The forecasting used in this study is also scenario-based were the qual-itative data is applied and categorized into one of several scenarios. Thisis done in order to decrease complexity and provide a more decisive result.Since the scenarios can be seen as a codi�cation of the data. The scenariosare described in Section 4.4.

Forecasting is often used in combination with strategic planing and man-agement which allows organizations to create plans for the future. One typeof method is scenario planning, where various plausible scenarios are createdand analyzed. Strategies and plans can be made to handle certain scenariosand di�erent indicators can be found. In this study a series of scenarios areused to guide the qualitative forecasting (see Section 4.4).

3.2 Business Collaboration and Openness

Collaboration in business is a common practise which have existed for a longtime and can take many various forms [65]. It can cover almost everythingfrom a simple codependency between two companies where the actors maynot even consider themself collaborating to major joint-ventures. In thePC industry for example new products are often enabled by the result of aseries of actions from many di�erent actors which can cause a chain reaction.For example, advancement in chip manufacturer can enable the productionof smaller transistors, which makes it possible to create higher performinghardware [1]. Higher performing hardware can support more demandingsoftware and application which in the end can lead to bene�ts for the userof the PC.

Business collaboration can further be divided into either inter- or intra-organizational collaboration. Depending on whenever the collaboration istaking place within an organization or with one or several external part-ners. Through this report collaboration will focus on inter-organizationalcollaboration where di�erent actors are directly working together to achievea common goal. This is due to the di�culty to investigate organization'sinternal collaboration and unspeci�ed collaborations. Since the Internet ofThings and buildings are two very wide and complex areas, collaboration isan important factor for successfully creating smart buildings [40]. Its notfeasible for a single market player to create an entire system for smart build-

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ings or achieve an expertise of every system and functionality present in amodern building.

Along with inter-industry collaboration, openness when it comes to dataand technology is an aspect which is considered important for the implemen-tation of IoT [7]. The ability to connect system and achieve interactivityis dependent on open standards for communication and APIs (ApplicationProgramming Interfaces). The concept of openness in software system ex-ists in many di�erent levels and perspectives, such as open communicationstandards, open data and open scource [61]. This study will mostly focus onopen communication standard and method since its required for interactionbetween system and allows for higher market penetration with more devicesconnected. Open data is an important aspect for the sucess of IoT, dataownership and privacy aspect must must be considered [4, 5]. Sharing dataand information to gain performance and functionality plays a major part inthe IoT-concept.

3.3 Sustainability

Everytime a company develops a new technology, releases a products or un-dergoes changes sustainability should be considered. There are three di�er-ent aspects of sustainability which needs to be considered, namely the social,economical and environmental [34]. This study is done in collaboration withFortum Värme, a company partly owned by the city of Stockholm and withclear sustainability directives. Both social and economical sustainability areoutside the scope of the study and will only be covered brie�y compared toenvironmental sustainability.

Social sustainability within the Internet of Things is an important aspectand needs to be considered to ensure a good relationship with users and forexample customers to Fortum Värme. The term social sustainability targetsthe individuals and involves concepts such as how a person perceives power,justice and rights [34]. A great concern when it comes to the Internet ofThings is privacy and integrity issues, since smart devices often collects dataabout the user. Consumers are not always aware or have the option to rejectthis data gathering. Providers of IoT needs to consider how their productsa�ects the consumers and the society as a whole. This particular study coverssmart buildings and it could become a risk if for example smart buildingsshifts control or information from users and habitants to other stakeholderssuch as property owners or utility service providers.

The economical sustainability perspective is important for a company tobe pro�table and for every major investment the risks needs to considered.

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Since this study focus on investigating how the technological transformationin the architectures of IoT will evolve in a near future this research willnot be able to examine the economical sustainability. Companies lookinginto the Internet of Things technologies should consider possible risks andeconomical bene�ts before entering the market. Economical sustainabilityshould be considered in every investment decision.

Environmental sustainability focus on decreasing the greenhouse e�ect,reducing the carbon footprints and generally limiting the negative impacton the environment. In everyday language the term sustainability is oftenused as a synonym to environmental sustainability [34]. Smart buildingsand IoT is a technology which has a lot of potential of streamlining energyconsumption and reduce waste. For example by steering the district heatingmore e�ciently and avoid heating properties which already holds a su�cienttemperature level. Better control of the district heating system may also openup for a more even distribution of the energy distribution and smooth downthe energy consumption peaks. Using IoT as a tool for energy utilization willhowever most likely lead to a paradox. Since the ICT-technology is estimatedto have a larger energy demand globally in the future its possible that allbene�ts will be erased by the increased in ICT-devices [7, 11].

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4 | Methodology

This chapter presents, motivates and explains the di�erent methods used toconduct this study. The research design and data gathering methods will beshown and analyzed. Finally the quality of the study will be discussed interms of validity, reliability and generalizatiability.

4.1 Data gathering

To execute this research di�erent data gathering methods have been used.An extensive literature study have been conducted to cover the width andcomplexity of the studied �eld. The literature acts as secondary sourcesin this research and is used to create the right condition for the empiricaldata gathering. The literature is used to create a theoretical base which theproject then will use to determine where empirical data is needed. The Em-pirical data is gathered to gain more speci�c, in-depth knowledge based onthe primary sources. Due to the complexity of the problem the interviewswill strive to collect qualitative data which is often rich on information. Qual-itative data have potential to give answer to complex situations and generatenew concepts [35]. Since the aim for this research is to investigate how IoTwill evolve in the next �ve years qualitative data is more desirable thanquantitative.

The interviews have been conducted with major actors in the IoT-market(see Section 2.2) and companies providing di�erent functionalities or solutionin facilities (e.g. ventilation solutions). The study also exercises snowball (orchain-referral) sampling when collecting data which means respondents areasked to recommend new respondents or companies of interest to the study.Snowball sampeling is a good method to reach "hidden" or hard-to-reachpopulations and quickly pinpoint where more valuable data exists [36]. Itsimportant to be aware of the disadvantages of snowballing, e.g. the samplingis non-random, biases can exists and suggested respondents can be of lowvalue to the study. The study will also to some extent visit property owners,

27

housekeepers and technological suppliers as well as technicians working inthe �eld.

4.2 Literature Review

An extensive literature study was made in the research, to be able to coverboth IoT and basic information about district heating in buildings. Thestudy includes material in form of scienti�c articles, reports and books fromlarge technical organizations such as IEEE, ISOC and developer communitieslike Eclipse community. Material have also been found by using tools suchas KTH Library service Primo and Google Scholar. Key-words searched forare for example: IoT, Internet of things, smart buildings, IoT-architectures,home automation and communication protocol standards. The literaturestudy in this thesis aims to go hand in hand with the empirical research,highlighting interesting areas and providing theoretical frameworks neededto make sound conclusions.

To the extent possible literature which have been peer reviewed have beenchosen to ensure a high quality from the secondary sources. However this donot apply to every examples and the cases used in the report, since the mainlyare used to illustrate or highlight certain aspects. The technological articlesand reports used in this study have also been �ltered by the publishing years.Since the technological advancements quite rapidly can make technologiesobsolete.

4.3 Interviews

The interviews in the study have been semi-structured and targeted towardsrespondents with experience, knowledge or vital positions in the current IoT-market. Care have been taken to involve di�erent actors and stakeholdersinto the research to capture a wider part of the market and to get in touchwith respondents working with buildings and various utility functions. Theinterviewed respondents are listed below with name, position and date forthe interview (see Tabular 4.1).

Most interview have largely been adapted to the interviewee's expertiseand accessibility, thus not a single interview framework have been used, al-though some of the interview subjects are listed in Appendix A. The tele-phone interviews lasted for 25 min - 50 min each, and the the face-to-facemeetings normally lasted one to two hours in most cases. All interviews wereheld in Swedish and notes were taken during the interviews and the interviews

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were summarized after completion, to contain as much of the qualitative dataas possible.

Name Position Interview method and

time of the interview

Bengt Eliasson Spokesperson Commerce atIBM

Telephone, 2017-03-20

Zandra Nilsson IoT-responsible at IBM Meeting, 2017-03-27Erik Andersson Business Developer at Fläkt

WoodsTelephone, 2017-03-31

David Bergstedt Marketing Director IoT atTele2

Meeting, 2017-03-31

Ingrid Thylin Head of Social Developmentat Skellefteå Municipality


Magnus Nygren Technical expert at FläktWoods


Patrik Sundberg IoT responsible at Skebo Telephone, 2017-04-24Claus Popp Larsen Head of Urban Life at

ACREO RiseMeeting, 2017-05-02

Anders Johansson Area Sales Manager atCisco

Meeting, 2017-05-08

Mario Ingemann IT Service Manager atCOOR

Meeting, 2017-05-10

Michael Asplund CIO at COOR Meeting, 2017-05-10Per Bjälnes BIM-Strategic at Tyréns Telephone, 2017-05-18Ulf Wretskog CEO at Yanzi Networks Meeting, 2017-05-24Joakim Eriksson Ph Lic, Senior Researcher at

Rise SICSMeeting, 2017-05-24

Table 4.1: An overview of the respondents of this study.

A conscious choice in this study have been to look deeper into smartbuildings in the Skellefteå area and individuals working with the technologyin the region. Because there's currently several tests with smart buildings inthe municipally and the circumstances are relatively good for testings martbuildings. The municipal power company Skellefteå Kraft provides electric-ity, district heating and also acts as the Internet service providers (ISP).The power company o�ers broadband Internet to most homes in Skellefteåand, more importantly to the municipal housing company Skebo. Having thesame owner for the energy company, Internet service provider and housing

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company (as well as a ambitious IT-strategy) makes Skellefteå an interestingregion for this study.

A high degree of snowball sampling have been used in the study to �ndmore valuable information [36]. Letting the interviewees suggest new possibleinterviewees for the study can lead to many unexpected sources of informa-tion and possibly complementary respondents from the same organization.Selecting respondents by recommendation can also lead to unexpected turnsof events. Sometimes respondents can act as intermediate steps where the in-terviewee doesn't process the desired knowledge or experience for this studybut can point out someone else who knows.

All participants of the study have been given the option to be anonymous,an option which some have chosen to use. Tabular 4.2 lists and describes theanonymous respondents of this study. The professional title of the anony-mous respondents have been altered to a more general form to ensure a highdegree of anonymity.

Alias Position Interview method and

time of the interview

Interviewee A Technology expert at aglobal ICT-company

Meeting, 2017-03-25

Interviewee B Chief innovation o�cer at atelephone company


Interviewee C Business developer at an el-evator company

Meeting, 2017-04-28

Interviewee D Building Technology expertat an industrial manufac-turing company


Interviewee E ICT researcher at businessdevelopment �rm


Table 4.2: An overview of the anonymous respondents of this study.

4.4 Forecast Scenarios

To increase the focus and give more direction in the qualitative data gatheringa series of forecasting scenarios have been created. The scenarios are based onthe literature study and have been made in association with Fortum Värmeand the initial interviews have also contributed. Below the four scenarios are

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listed which describes plausible future developments of the IoT-technologyin buildings.

Scenario A: Open standards

Scenario A is a situation where the Internet of Things achieves a majormarket breakthrough (like the rapid mass adaption of smart phones). Smartdevices and systems in buildings (e.g. elevators, heating, ventilation) can eas-ily interact directly. Communication techniques and protocols uses a sharedstandards, there's no system lock-in and devices from di�erent brands ormanufacturer can interact directly in most cases and share data. The Issueswith security, privacy and lack of compatibility which currently exists mustbe solved in this scenario [6], each speci�c device and system must protectprivate or sensitive data. Scenario A is much inspired by the vision of thecomputer scientist Mark Weiser and ubiquitous computing [9].

The incentive behind Scenario A in buildings is to achieve a "win-win"situation were system with various functionality can cooperate to gain ben-e�ts. Scenario A likely requires penetrating standards and industry-wideagreements which is di�cult to established.

Scenario B: Isolated systems and Silos

Scenario B includes a future were di�erent system develops individually into"smart" systems but without interactivity between the di�erent systems.Scenario B could easily be seen as an extension of the current situationwhere a modern building can have a multiple advanced utility systems withno direct interaction between them. However, systems can communicatewith each other through the Internet and APIs (Application ProgrammingInterfaces) or in speci�c con�gurations. Scenario B is highly inspired by thecurrent situation of the market [44, 55]

Figure 3.1 is an example of how Scenario B could look like in the futurewith service providers, each handling a particular functionality. The lack ofinteractivity between various utility systems can easily lead to redundancy,higher cost and ine�ciency [44]. Its easy to look at each system in ScenarioB as an isolated system or a "silo" where there is only limited externalinteraction. Competition is mostly limited to within the silos and systemmostly competes with providers of the same functionality.

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Scenario C: The Trusted Service Operator

Scenario C includes the creation of a technology agnostic platform whichis used to interconnect the resources with the service providers. In thisscenario the platform acts as a broker and is responsible for setting upthe standards, the security and decide which service should get access toparticular resources. For this scenario to work its important that the ser-vice operator which is responsible for the platform acts as a trusted serviceoperator/manager (TSO/TSM) which manages both resources and serviceproviders in a fair way. The service operator behind the platform is respon-sible for setting upp the communication rules and standards for both theservice providers and the resources. This scenario shares a lot of similarityto App Store and Google Play from Apple and Google respectively. Figure 4.1shows a simple example of how a trusted service operator could function.

IoT-Platform/ Service operator

Energy Company Heating Company ISP Janitorial

InterfacesRules, standards

RescourcesSensors,Actuators

ServicesService providers

InterfacesRules, standards

Figure 4.1: A simple drawing which shows the role of a Trusted ServiceProvider (TSO) and its role to combine service providers with the resourcesin a building.

For scenario C to become reality collaboration and openness (when itcomes to standards and business models) are crucial factors [44]. Data,equipment and infrastructure needs to be shared and most likely several

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actors will have to revise their business model. Furthermore compensationmodels needs to be established, otherwise it might be di�cult to motivate acompany to share installed equipment or data.

Scenario D: Proprietary Platforms

Scenario D can be seen as a special case of scenario C, were a softwareplatform have been implemented but with limited openness. The platformprovider implements a conservative business model in order to achieve aproprietary lock-in of the customers. In Scenario D the customers are limitedto the service operators bound to the platform and its partners. For ScenarioD to become a reality a dominant design must be established among the IoT-platforms.

Another possibility in this scenario is that several IoT-platforms existsand competes with each other. For example Telia and IBM are currentlyproviding IoT-platforms with the purpose of combining various systems buteach system is only compatible with a limited range of smart devices [27, 37].If this trends continues the future market of IoT in buildings might havenumerous of existing IoT-platforms in parallel with low or no compatibilitybetween them. Customers might have to decide wherever they want to livein a "Telia home" or a "IBM home" for example.

Scenario E: The default case

The default scenario occurs when none of the other scenarios are eligible. Thisscenario could be seen as an indication that the forecast have an improperdirection and may target the wrong information. I.e. IoT and smart buildingsmay not be a feasible combination for manufacturers. It could also meanthat The Internet of Things doesn't catch on and fails to achieve a marketbreakthrough during the set time limit.

4.5 Quality of the study

When conducting a study its important to evaluate and re�ect over the qual-ity of the study. Considering and evaluating the methods used in the studyis a good method to comprehend the weaknesses and strengths of the study.Having weaknesses in the methodology can propagate into the results andtherefore needs to be considered before drawing a conclusion. Its not alwayspossible or feasible to respond to various weaknesses but depending on thepurpose of the study it might be possible to prioritize certain quality aspects.

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A common approach to determine the quality of a quantitative study is bylooking at validity, reliability and generalizability.

4.5.1 Validity

Validity is a term which describes how well the research actually measureswhat it was supposed to. In other words, validity is how well the chosenresearch method actually can be used to answer the desired research ques-tion [56]. Having high validity means that the collected data can be seen asa relevant and truthful picture of the reality. The validity concept is howevermuch more complex and there are several di�erent types of validity whichcould be used to analyze a study. For the evaluation in this report only abasic view of the validity concept will be used in order to save time and avoidunnecessary complexity.

This research uses a qualitative forecasting method with semi-structuredinterviews to give projections about a technological trend in a �ve year per-spective [32]. The method used can be seen as a fairly standard approachsince its similar to the Delphi method and market research which ensuressome validity. The quantitative interviews held with various individuals andexperts in the industry can be questioned. Even though care have beentaken to make sure respondents of the study holds relevant positions or havea background in the �eld its no guarantee that they are good estimators ofthe future. Therefore the forecasts done in this project which aims severalyears ahead could be considered to have a moderate level of validity.

4.5.2 Reliability

A studies reliability describes the precision and accuracy of the collected data.Having good reliability means that collecting the same data repeatedly shouldrender the same answer with only minor or no di�erences [56]. Furthermorereliability means that the collected data isn't a�ected by the respondentsbiases. In similarity to validity its also possible to categorize reliability intodi�erent types, this study will however only consider reliability as a wholeconcept to maintain simplicity.

The empirical data gathered in this study are mainly gathered from qual-itative semi-structured interviews. Some conducted as telephone interviewsand some as "traditional" face-to-face interviews depending on the respon-dent's location and preference. Respondents have also been given the oppor-tunity to be anonymous in the report. The major issue with reliability is theusage of forecasting. As always when dealing with future projections there isan insecurity regarding accuracy, more complexity and longer scenario times

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brings down the accuracy [32]. Therefore forecasting tends to become a se-ries of trade-o�s and compromises, longer projections means more valuableprojections but higher uncertainty. Higher accuracy generally also requiresmore resources, e.g. more qualitative data in this study would most likelygive higher accuracy. The reliability of this study should therefore not beconsidered high.

4.5.3 Generalizability

The term generalizability describes how well the collected data of the studycan be applied in other cases [57]. A high level of generalization impliesthat the result of the study could be used in other similar studies withoutrisking to lover reliability and validity. The aim of this study is mainly toanswer how IoT-architecture's may evolve in a �ve year perspective and whicha�ect the new technology can have. Mainly the study is done with buildingsin mind and from an energy company's perspective. Still the results andconclusion drawn in this study could be interpreted to have a high level ofgeneralizability, IoT is a global concept and buildings have a lot of similaritiesaround the globe. Furthermore most actors involved or investing in thetechnology are facing similar problems.

4.6 Method discussion

Due to the complex nature of the studied subject and the vast amount ofinformation available, the project have since the start had an open mindset.By planing for and tolerating a certain focus shift in the case of new infor-mation it have been possible to change and update interview questions whennew information is found. The project started with a quite limited focus onIoT and buildings, to eliminate the risk of collecting unnecessary data. As aresult the small changes in focus of the project only have resulted in minorparts of the collected data being considered irrelevant.

None of the conducted interviews in this study were recorded, partlyto allow for a more natural conversation but also to ensure respondents oftheir integrity. To avoid misinterpretations and increase validity several re-spondents have instead been given the possibility to see the result beforepublication or asked to participate in a follow up interview.

To make future projections this thesis have used a scenario based quali-tative forecasting method with a �ve years perspective. The long projectiontime means that the accuracy of the research naturally will be rather low [32].As a consequence the projections holds a low complexity in order not to fur-

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ther decrease the accuracy. Furthermore the limited resources in the studyhave made it di�cult to use qualitative forecasting frameworks such as theDelphi method [33], market researches and panel consensus. Using a estab-lished framework could have increased the accuracy and reliability of thestudy, it would also make evaluation of the result easier.

When conducting a qualitative forecasting or a market research the amountof data samples should optimaly be quite large, since the projection typicallyimproves with more data. Therefore this study haven't applied any upperbound on the number of respondents or any "stop method" which indicateswhen enough data have been collected. Even though some data quite rapidlysaturated.

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5 | Empirical Study

This chapter will present the �ndings of the empirical study with the datagathered from the interviews. To be able to con�rm or dismiss the researchstatement the empirical study have gathered data regarding perceived valuesof smart buildings, emerging dominant designs and imeding factors. Finallydata have also been gathered regarding future expectations.

5.1 Perceived values of Smart buildings

In order to investigate how the Internet of Things and smart buildings canevolve in the future one �rst needs to investigate if the market is ready andmotivated for the transformation. Making sure that market actors see apotential in smart buildings and for what particular reason can give manyinsights, such as where di�erent actors expects to �nd most value.

In this study all interviewed participants have unanimously expressed abelief that smart buildings is the future, and that there's a lot of potentialbene�ts from the digitalization of buildings. Mainly the reasons for this op-timistic opinion is explained with the fact that there's to great potential toignore IoT in buildings and that several early attempts of IoT implementa-tions already exists. These results correlates well with most of the projectionsregarding the growth of the Internet of Things (e.g. Ericsson, Huawei andCisco [17, 18, 19]) which projects a signi�cant impact both �nancially andthe socially.

The percieved value provided by the Internet of Things given by the re-spondents in this study can be divided into two categories, direct and indirectvalues. Depending on the nature of the bene�ts and the ease o� obtainingthe positive e�ect. Direct values are often relatively easy to �nd and straightforward to implement, often only requiring a modular or incremental innova-tions. Typical examples of direct values could be an elevator which discoversand adjusts to better suit the usage patterns or a more responsive heatingsystems which can create a more even temperature [63, 64]. Below is a short

37

summary of some of the bene�ts which were mentioned in the study (some-what in the order of popularity and times mentioned by the interviewees).

1. Maintenance and serviceWith sensors and Internet access to the utility systems in a buildingscould be use to remotely monitor the health of a system and ease main-tenance. Easier troubleshooting and maintenance as well as automatedcalibration of various systems could reduce downtime, costs and enableproactive services. Having sensors monitoring �lters in the ventilationfor example could make it possible for replacement when the perfor-mance decreased in the �lter instead of having them changed at a �xedinterval [38, 39, 42, 45, 46].

2. Higher performanceSmart devices with sensors can be used to increase the performance ofmany utility systems. By monitoring the indoor climate its possibleto control the ventilation and heating to act much faster when forexample the oxygen level is to low or the temperature to high in abuilding. Improving the indoor climate leads to better comfort for theuser and a more ergonomic environment, which in the end can lead tohappier and more productive users of the property. The technologycould also be used to reduce waste and save energy by for examplemaking sure that the building isn't heating more than necessary andspending energy in areas where there are nobody [42, 44, 45, 46].

3. Big Data and Machine learningHaving a large amount of sensors and devices will result in large setsof data which can be used in numerous ways. It can be used for real-time analyzis to get a better understanding of a buildings performanceand attributes at the present time. Having a continuous data analyzealso enables the possibility to �nd out in real time areas where energy iswasted or abnormalities are detected and alert building managers. Col-lected data could be used for benchmarking a system to similar ones insearch for de�ciencies and problems. Analyzing data in a system couldalso enable machine learning and better optimized systems to save en-ergy and improve functionality of a building [38, 48, 11]. Elevatorsperformance and energy consumption could for example relatively eas-ily be increased by having the system detect usage patterns and adapttowards it [53, 63, 64].

4. Provide new business models and product o�erings:IoT technologies in buildings could open up for new business models

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and o�erings. An energy company could for example sell heating as aservice instead of a product. Extra services like energy optimizationand maintenance agreements could also be examples of potential newo�erings which could be achieved with smart buildings [50]. Someproperty management companies projects that the technology couldbe used to identify and analyze area utilization and o�er evaluationsor suggestion on how to improve usage of the facility [45, 46].

In contrast to the list above, indirect values are bene�ts which are ob-tained indirectly (as the name suggests), often through data analysis, col-laboration between systems and combining data from various sources. Anexample o� an indirect value can be the correlation between the number ofcustomers in a restaurant and the outdoor temperature or perhaps the num-ber of printed documents and the oxygen levels in a building. The indirectvalue are more related to the insights and knowledge which can be foundin collections of data. The indirect bene�ts which can be di�cult to �ndand use is however often very valuable. Many interviews in this study sug-gests that the major value and bene�ts in the IoT-technology will be foundthrough data analysis and cross-analyzing data from various systems.

Having multiple system combined into a single distributed system alsoopens upp a lot of possibilities. The municipy of Skellefteå for exampleare currently looking into the technology to improve the elderly care andcreate better conditions for managing the demographic challenge and theaccompanying growing care needs [41, 44]. Since many municipalities inSweden (and across the globe) is expected to face an aging demographicthe care needs to become more e�cient [43, 58]. Having several systems ina building interacting and analyzing the behavior of residents its possiblethrough algorithms to detect abnormalities and changes in usage patterns.If a potential problem is detected by the system it could for example alertcare sta� or relatives which can check in on the care taker.

A great majority of the respondents however states that there's a greatdi�culty to motivate customer/decision maker to invest in the technology.The lack of concrete examples of functioning smart buildings, the unclearreturn on investment (ROI) and an uncertainty of how the technology willevolve in the future isn't a compelling situation for customers. Withouteasy to implement solution which provides quick improvements (so called"low hanging fruits") the cost-driven municipalities and property owners areoften reluctant to invest in new technologies. Since the technology is stillin its infancy its also di�cult for customer to know exactly how a smartbuilding should be created for e�ciency [40, 45, 46, 47].

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5.2 Dominant designs & Emerging technologies

The focus in this study have been to investigate how the IoT ecosystem andarchitectures in buildings may look in the a couple of years ahead and if astandard method for communication will exist. As a result the study havelooked at which technologies that will be used in the future but also a moreabstract view of the entire system as a whole in this study.

A great majority of the interviewees stated that communication tech-nologies in itself is of minor importance in smart buildings when it comes tohardware and software. The technology existing today is capable enough tohandle the requirements smart buildings and the lack of compatibility be-tween di�erent standards can be solved quite easily [37, 38, 40, 47, 54]. Thedi�culty is on a higher level to establish a standard method for connectingsystem and managing data. However several respondents have also answeredthat there most likely will be a technology shift towards more LPWans (suchas LoRa and NB-IoT) and the upcoming 5G technology in the future. Look-ing at Figure 3.2 it becomes clear that both LoRa and 5G stands out intransmission range and bandwidth.

Many of the interviewees further points out that a smart building mostlikely will have to be able to cope with several technologies. Due to thevariation in nature and requirements from various actors and utility systemsthe future will most likely have several access methods within a single build-ing [37, 44, 47, 55]. Therefore most interviews states that smart buildingsin the future will be based around technology agnostic platforms which willhandle the resources (sensors, smart devices and actuators) and provide aninterface for the service providers. There are currently several IoT-platformsavailable such as Telia Zone, IBM Watson and Siemens Mindsphere to men-tion a few but none have managed to achieve an extensive cooperation be-tween di�erent utility systems.

5.3 Impeding factors for the technology

The Internet of Things can potentially bene�t all of society but many tech-nical issues remain to be addressed. Projections about IoT often estimatesa future with massive amounts of interacting smart devices. For IoT to besuccessful its required that policy makers and the industry manages to solvecertain threats [5]. The main threats which impedes the IoT-technology as awhole can be summarized into security, connectivity and compatibility [62].The interviews conducted in this study partly con�rms the general problemswhich exists with IoT but also highlights other areas, more speci�c to the

40

building sector and smart buildings.

5.3.1 Compatibility

One of the major problems which currently impedes the IoT-Technology isthe lack of compatibility between devices and systems [6, 44, 55]. Most likelydue to a combination of reasons, such as di�erences in data management,hardware and openness in the systems. Several organizations have tradition-ally created proprietary system's with a conservative (monopolistic) mindsetwhich have slow down the technological evolution of IoT [15]. Low compati-bility can leads to a system lock-in of consumers, in many ways the situationtoday resembles the situation with Betamax and VHS where two competingstandards struggles to reach a dominant design [59]. The di�erence is thatwith the Internet of Things there are numerous standards, manufacturersand areas where standards are competing. The organizations (and alliancesof organizations) involved in "the standards war" are also large, global orga-nization with lots of resources invested in the technology.

The lack of compability can often results in a building having severalsystems existing in parallel with partly the same functionality [43, 44, 55].There are many drawbacks of having parallel systems within a building butmainly it results in unecessary expensive and rescource demanding. Compa-bility issues also makes it di�cult to share data and utilize Big Data scienceand machine learning which could improve the comfort and energy usage inmost buildings [11].

Most respondents in this study points out that the major problem withcompability in the building automation sector is on a high level. The issueisn't to connect various systems, but to get them to share data in a standard-ized fashion and achieve some type of synergies. [40, 42] Because data is oftenconsidered valuable many organization might be reluctant to share it freely,something which is noted in the interviews. Most respondents states thatsharing information and access is of great importance and a key for futureIoT-system but in the same time its a sensitive question with no clear an-swers. All data cannot be shared (because of security and personal integrity)and not all systems should have the same rights to a�ect other systems. Fur-thermore some kind of compensation model might be needed to compensateactors which provides data resources, sensors and actuators [44, 47, 54].

5.3.2 Security

One of the largest concerns with IoT is security, having large amount of con-nected devices with various security solutions and capabilities is can quickly

41

become a serious issue. Naturally smart devices have sensing abilities which,if hacked, can make intruders get access to private user data. Smart de-vices may have physical abilities which can result in both material damagesand in worst case physical injuries if a hacker manages to hack the device.There have been many alarming reports of smart devices with weak securitythat have been hacked [66]. E.g. In 2014 a hacker was able to remotelyget access to a hockey rink in Eskilstuna, in Sweden [67]. Another famousexample's of how dangerous a breach in security can be was when securityresearchers showed how a car could be hacked while being driven [68]. Asthe quote below emphasizes security is often not considered enough or addedas a retrospective measurement.

"The 'S' in IoT stands for security" � unknown source

Security is an important aspect in smart buildings but maybe not aseminent as for the IoT-technology as a whole. Utility systems in buildings areoften quite large, expensive and geographically isolated which makes securitymeasurements easier to motivate and implement. This study haven't had afocus on security and the interviewees have neither pointed out security as amajor issue (or an issue which isn't solvable).

5.3.3 Complexity

From the conducted interviews complexity was often singled out as one ofthe most threatening and impeding factors when implementing IoT-systemsin buildings. Di�erent buildings can contain various systems from severalmanufacturers and for buildings to receive optimal bene�ts collaborations isrequired with several systems. A successful smart building should optimallybe able to bring bene�ts for all stakeholders (see the "pyramid" in Figure 2.2)and combine a majority of the smart devices in a building. The widespreadcombination of systems and stakeholders naturally leads to complexity.

Several of the respondents in this study have pointed out that attemptsand early tests of smart buildings haven't been able to capture the width andcomplexity of an entire building [47, 52, 55]. The current existing platformsand tested smart building could be seen as to narrow or speci�c. E.g. Coorhave a well developed smart building system of how janitorial services andarea utilization can be facilitated and analyzed but the system focus on the in-door area and isn't constructed to handle utility systems and services [45, 46].This is typical for most IoT-systems and smart building experiments todayand can be seen as a direct consequence of the great complexity. Generallymost IoT-platforms and systems are either focused on the end-user environ-ment (e.g. apartments) or utility services. In this study it have become clear

42

that a gap can be seen between the end-user systems and the utility systems.Several of the interviewees in this study have also express a desire to reachinformation where their own system isn't present [45, 51, 54].

5.3.4 Cautiousness & Unmotivation

An impeding factors which a great majority of the interviewed respondentsrevealed was the experienced cautiousness and unmotivation from the prop-erty market [44, 45, 46, 48]. The reasons given for the unmotivated marketwas mainly the lack of clear and visible examples with bene�ts of smartbuildings, so called examples of "low hanging fruit". The lack of clear andeasy to reach bene�ts of smart build makes it di�cult to motivate cost-drivencustomers to invest in the technology [51, 54, 55]. The complexity and lackof competence in the technology �eld can also be a reasons for the unmotiva-tion, data science and ICT are areas which may be far from property ownersand consumers core knowledge.

The market as a whole have also been identi�ed as the reason for unmoti-vation, the housing situation in Stockholm is currently described as a crisis.The lack of housing reduces consumers possibility to demand new innovationsand the property owners need to invest in new technologies [48, 54, 55, 60].The failure to build enough new homes also diminish the possibility for test-ing incremental IoT-innovations [50].

5.3.5 Privacy & Legal

Privacy is also a factor which have raised concern and may impede the growthof IoT if not solved [44]. Having numerous connected devices with sensorsin close proximity to users have the potential for serious privacy intrusions.Collecting data from properties and the residents usage patterns is howeveran interesting value-creating opportunity. With more knowledge about theend-user enables the possibility to make more customized o�erings and morepersonalized services.

In similarity to security privacy needs to be a property considered from thebeginning and not as an after construction [40, 50]. Privacy is highly a�ectedby laws and regulations but also by ethical reasons. Therefore its importantto understand the legal aspects and make sure that the laws are obeyed whenimplementing new technical systems. In this study legal aspect are delimitedand put outside the project's scope (see chapter 1.6) but several respondentsin the study points out privacy as a future challenge. The question aboutdata ownership is for example something which can cause trouble in thefuture.

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5.4 The future of IoT

A great majority of the interviews concluded that a genuine smart buildingswill most likely not exist within a �ve year future. Instead several respon-dents claimed that a ten year perspective is more realistic before functioningsmart buildings would exist on the market. However, many respondents alsopoints out that the technical transformation can be rapid (in similarity tothe shift to smart phones) [39, 51]. Especially if a successful smart buildingimplementation manages to act as a "killer product" and disrupt the mar-ket. The theoretical bene�ts from the literature and various case studiesshows that the obtainable advantages of digitalization of buildings can behigh which indicates potential for market changing products.

Furthermore the empirical study shows unanimously that protocols, tech-nologies are of less importance than the evolution of shared platforms. Thiscan be seen as a con�rmation that development of IoT in buildings mostlikely will develop into Scenario D (an architecture based on agnostic plat-forms). Although within the time scope of this study Scenario B will bemore prominent and systems will continue to develop in isolation or "silos"for a while. On the other hand LPWan-technologies, 5G and LoRa especiallyis technologies which several respondents believe will be more prominent inthe future [40, 44, 47, 49].

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6 | Analysis

In this chapter of the report results of the empirical study and the literaturestudy will be analyzed. Furthermore the research statement will be revisedand answered in this chapter. Finally theoretical theories will be applied tothe results from the empirical study.

6.1 Testing the Research Statement

The interviews conducted with market actors and experts clearly shows thatthe research statement in this study should be dismissed, there will not bea persuasive standard method for communication in smart buildings withinthe next �ve years. The time limit in combination with impeding factors andunmotivated consumers are considered too extensive for the development ofsmart building to be succesfull in the speci�ed time frame. Nonetheless, bothfrom the literature and the conducted interviews in the study its apparantthat the industry and research community expects many advantages in smartbuilding technology. The evolution of smart buildings can provide valuesfor stakeholders in every level, such as end-customers (residents), serviceproviders and property owners. As a result its safe to assume that smartbuildings will evolve and exist in the future.

The Future form of IoT-architectures in buildings

From the conducted interviews its clear that in the short term perspective(and scope of this study) the IoT-architecture will be in form of isolatedsystems and not dependent on hardware or software speci�c solutions. Thedevelopment of isolated systems will result in low interactivity between sys-tems in buildings and not a genuine Internet of Things implementation.

In the long term perspective the standard IoT-architecture is expectedto be built around platforms. Optimally the platforms should manage thebuilding's resources and act as an interface for the service providers of theproperty. Some platforms already exists today but the lack of openness,

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standards and compensation models makes it hard to reach a high marketpenetration. A successful IoT-platforms will likely require new business mod-els in order for actors to share sensors, data and to compensate the platformowner. For an IoT-Platform to be sucessfull it most certainly will have tobe open, standardized and generall, in order to �t di�erent kind of buildingsas well as be able to support various kinds of service providers and systems.Therefore the struggle to reach a dominant design will assumingly be be-tween platforms and the supporting organizations in the years ahead. Inthis study the empirical data suggests that IoT-platforms are too early indevelopment to �nd any potential market leaders. Looking at the Di�usionof Innovation framework IoT-platforms in buildings is at most at the earlyadopters phase and consumers experiences a shortcoming of visible bene�tsof the new technology and is not convinced to invest.

Inter-industry Collaboration and Openness

The Internet of Things concept emphasises information sharing to achievevalues. Moreover the empirical study shows that the complexity of smartbuildings is to great for a single market players to cover it entirely. Inter-industry collaboration is therefore seen as an important aspect in this studyfor the future development of smart buildings. The study indicates that a gapexists between IoT-solutions directed towards end users and implementationdirected towards utility and environment systems such as HVAC.

The IoT-technology also covers a wide range of industry sectors and col-laboration could also take form between actors with core business far awayfrom eachother (e.g. IBM and the elevator company Kone). Contributingwith competence and resources in sectors far away from the core businessopens upp for new markets and opportunities. E.g. ICT-companies couldcollaborate with utility providers to �nd synergy e�ects and better producto�erings.

Openness of systems and data is also an imortant factor in the future ofIoT and smart buildings. However, The empirical study as well as the liter-ature have only resulted in indecisive �ndings. Most interviewed companieshave no clear answer on what type of data, information and functionalitythat could be shared or whom the data belongs to. Due to privacy, regula-tion and directives its also a question which contains several aspects. Sharingdata between system could for example become a legal issue if the combinedinformation is considered intrusive.

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7 | Closure

In this chapter of the report the most important conclusions will be presentedand discussed. There will also be some recommendation to future researchesand suggestions on how it's possible to continue from this project. The re-maining problems and di�culties is also be explained and di�erent possiblesolutions are given.

7.1 Conclusion

The empirical study clearly shows that within a �ve year time frame a persua-sive standard for communication between building management and utilitysystems will not be established. All respondents in this study have expresseda belief that the digitalization of buildings are the future and its only a matterof time. The advantages of the Internet of Things are to great to be ignoredand utility systems in buildings are becoming more and more digitalized. Thegeneral opinion is however that a �ve year scope is a to short time frame toestablish a persuasive standard for communication and motivate the market.

Although the technology transition to smart buildings can be fast if thetechnology successfully manages to create a smart buldling with clear bene-�ts. Looking at theoretical frameworks such as dominant design this mightbe the case, the technology is still in its infancy and lacks a "killer"-productwhich can prove the advantages of the smart buildings and establish a stan-dard. From the empirical study the lack of pro�table examples is a commoninlay in the interviews.

The study also shows that hardware and software solutions in itself areof minor importance in the development of IoT in buildings. Connectingsystem are relatively easy, the di�culty is mainly to achieve interactivitybetween system and create value through data sharing and cooperation. IoTin buildings is projected to evolve into an architecture based on technologyagnostic platforms in the future, were resources are managed by the plaftormoperator and service providers are interacting through the platform.

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Other conclusions which can be derived from the study are the need ofcollaboration, the importance of openness and that there's possibly a needof new business models in order to fully be able to take advantage of theIoT technology. From the traditional development in silo's were systems andactors work and develop independently to a horizontal business model basedon platforms and shared resources. Looking at companies such as Uber andAirbnb its plausible that a similar solution with a service operator could bethe answer to many of the problems with IoT in buildings.

7.2 Discussion

The results and conclusion made in this study have been based upon bothlitterature and qualitative interviews. The number of interviews conductedare enough to draw relevant conclusions, although more data would in-crease the reliability of the study. However, with the limited rescourcesthe amount of respondents are su�cient and the similarity of the answersindicates that a degree of saturation have been reached. Having more inter-views wouldn't therefore necessarily provide new information. Furthermorethe study haven't faced any major contriditions from the empirical study,instead respondents have often contributed with di�erent aspects and per-spectives but not inconsistent information. Which also can be interpreted asa sign of good reliability.

The result and the conclusion of the study seems plausible, many modernbuildings and facilities already have most of the properties and componentsneeded to be considered smart. In essence the only thing lacking in manymodern buildings is a higher level of analytic and the coordination ability aswell as sensors. By enabling the possibility for a closer cooperation with thevarious systems its possible to gain higher performance in a building.

On the other hand, forecasting the future is always di�cult and comeswith the risk of misjudgment and false indications. Unforeseen event can playa big role whenever the estimation holds or not, such as new regulations andpolitical in�uences may change the direction of the technological evolution.This also holds true for this study and a �ve year projection is a very long timewhen investigating digital technology. To compensate for this complexity ofthe study have been keept low and a high number of respondents have beeninterviewed. The result could also be improved by using the del�-method,were respondents are interviewed several times and are asked to commentnew �ndings. Due to limited time and rescources as well as the respondentsavaliability this wasn't feasible in this report.

Finally, during this study it have also become evident that Stockholm

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might not be an optimal location for smart buildings or this kind of study.Most utility services (e.g. the district heating system in Stockholm) is alreadyhighly e�cient when compared to other systems internationally. Furthermorethe housing crisis is another example why Stockholm (and Sweden as a whole)might be the most suited for smart buildings. The shortage of housingsdiminish the need for property owners to investments in the smart buildingtechnology.

7.3 Future research

This project can be seen as a pre-study or be used as an general indicationof where the IoT-technology and smart building is headed a few years ahead.The study provides good insights and knowledge of the current situation andthe problems which the market is facing in the �eld of IoT in the building sec-tor. A natural continuation for this study is to further investigate technologyand market trends and improve the projections, a more thorough follow-upscould also be used to con�rm or discard the result of the study.

Future research could also look deeper into speci�c areas of the devel-opment, e.g. which actors will most likely be �rst to achieve a functioningplatform or a dominant design. Since the digitalization involves many actorsand is evolving from multiple directions its an interesting area to study.

Another area which could be interesting to research further is which typeof building could bene�t most from the IoT-technology and if there are indi-cators which shows improvement potential. Having clear expectation aboutwhich bene�ts and costs that are related to converting a traditional build-ing into a smart building is most likely going to be highly desirable by themarket. I.e. to understand how building should be created (or renovated) inorder to utilize the full potential.

The data generated by the new IoT technology is believed to be high involume and at fast velocity which will lead to challenges in the data man-agement. Sending data to a cloud over the Internet doesn't scale well andmay become an bottleneck. An interesting future research is therefore to in-vestigate how management of IoT data is optimally handled. Concepts suchas fog computing and edge IoT are concepts related to this problem.

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All pictures have been created by the author for this report, except Figure3.1 and 3.2. Figure 3.1 have been taken and translated from the organization E-

centret in Stockholm with their permission and Figure 3.2 is taken from the paper"a comprehensive look at Low Power, Wide Area Networks" under public licensing.

.1

Appendix A: interview framework

This is a short description of typicall questions or topics used during this thesis.Due to the variation in backround and expertise of the respondents not a singleframework have been used. Depending on avaliability and the respondents prefer-ences some interviews have also been more open discussions or presentations thantraditional interviews. Note that the question are only example questions and notpresented in any type of order.

• How do you work with smart buidlings today? For what values/bene�ts?

• What will happen next with IoT and smart buildings?

• What are the largest problem or impeding factor for the development ofsmart buildings? Is the problem speci�c for smart buildings or IoT in gen-eral?

• What are the consumers demanding? Are the focus on property owners orend customers?

• What impact is expected from the smart technology?

• Does any market actor have a clear advantage in the �eld of Smart buildingsand IoT?

• What possible outcomes do you see for the IoT-market within buildings?Any winners or losing actors?

• Will smart building exist within �ve years? How will the technology evolvein �ve years?

• How should data be shared and interactivity be established?

• Will there be a standard for communication in smart buildings in a nearfuture?

• Which protocols/technologies will be standards in building automation? Arethere any extra interesting?

• Who should own the data? Privacy and security issues?

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• What are your thoughts about cooperation with other actors? Any particularactors which might be extra suitable? Any risk wiht collaboration far awayfrom the core business?

• What advantages/disadvantages comes with smart buildings?

• How will the IoT-architecture/ecosystem evolve the next �ve years? Why?How?

• How can customer be motivated to invest in smart buildings?

• How could a platform establish a clear Return of Investment example? Whichactors needs to be involved how many?

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