Internet of things Making Buildings Smarter

Siemen's building technology division, once seen as the least dynamic part of the group, could become one of its more promising operations with the push toward the "Internet of Things."

It's always good when a technology company can show off its know-how in its own buildings.

For a triple-digit sum, Siemens is building a new company headquarters, scheduled to open this year and using its own building technologies division to demonstrate how the company can make buildings far more energy efficient and intelligent. The new headquarters will use 70 percent less electricity than comparable buildings.

“It is one of our flagship projects,” the head of the division, Matthias Rebellius, told Handelsblatt.

The building technology sector is undergoing radical change as a result of digitization. The trend is toward comprehensive solutions and the sector is already responding to the challenge: At the beginning of the year, Johnson Controls and the Tyco announced their merger.

“We are taking a very close look at that,” Mr. Rebellius said of the deal. Mergers, he added, are also an option for Siemens, but size alone would not be the decisive factor. “The question is how to use size sensibly to generate added value for the customer,” he said.

Digitization also provides building technicians with new possibilities. Light, air-conditioning and heating can be managed intelligently by smart remote control.

Siemens, Mr. Rebellius pointed out, is an all-round supplier of building automation, security technology and energy management systems, and is able to network all solutions. “We are confident in our ability to compete” in the increasingly networked building technologies market, he said.

In the past, the building technologies division was viewed by many at Siemens as something of an appendage. The acquired operations are headquartered in Zug, Switzerland. While other divisions in the group can bring in billion-dollar orders, the building technologies division often deals with much smaller contracts, as little as €5,000 ($5,700).

But this could change with the push toward "Internet of Things," a concept that involves networking all the various devices, controls, appliances and other systems in homes, offices and factories via the Internet protocol.

Digitization is forcing greater collaboration among all Siemens divisions and creating new opportunities along the way for interfacing with other products and forging new partnerships. The building technolgies division is developing solutions that allow lighting, air-conditioning and heating to be managed intelligently by smart remote controls, or smoke alarms to be used to navigate inside buildings. The division also recently announced a cooperation with IBM for building management software.

Business is looking up. Allowing for exchange rate effects, revenues increased last year by 1 percent to €6 billion, and those in the first-quarter of its 2015/16 busines year surged by 3 percent.

“I'm confident we can maintain this pace with stable or even increasing margins, providing the environment plays along,” Mr. Rebellius said.


Axel Höpner is the head of Handelsblatt's Munich office, focusing in particular on Allianz and Siemens. To contact the author: [email protected]