Smart-building technology adoption faces significant challenges in procurement, interoperability, and vendor integration, slowing momentum across sectors. The global Building Internet of Things (BIoT) market is projected to increase from $64.1 billion in 2024 to $101.0 billion by 2030, reflecting a compound annual growth rate (CAGR) of 7.87%. However, integration gaps and procurement obstacles are constraining near-term progress.1IoT Trends Shaping Smart Building Tech by 2025
Background
The smart-building sector is under pressure due to high expectations and recurring execution challenges. According to a 2024 Forrester-Johnson Controls study, only 13% of commercial real estate and retail leaders report fully integrated building systems. The lack of system integration is linked to reduced operating efficiency (62%), lower customer loyalty (59%), and increased regulatory penalties (57%).2New Johnson Controls Report Shows Smart Buildings a Competitive Edge for Commercial Real Estate and Retail Leaders | Johnson Controls Despite the promotion of open-system designs, modular architectures, and convergence strategies by vendors and industry analysts, integration shortcomings persist.1IoT Trends Shaping Smart Building Tech by 2025
Details
Procurement processes are increasingly complex amid fluctuating material costs, workforce shortages, and heightened cybersecurity concerns. Construction sector procurement teams are implementing predictive analytics and sustainability-linked requests for quotation (RFQs) to address supply chain risk and compliance requirements. Embedded carbon reporting and green procurement scorecards are becoming standard practice, underscoring procurement's role in sustainable smart-building implementation.3Top Construction Procurement Trends to Watch in 2026
Interoperability remains a critical challenge. By late 2026, experts expect it to be a key criterion in vendor selection as artificial intelligence (AI)-driven building management systems (BMS) and predictive analytics become baseline features.4Intelligent Buildings 2026: From Reactive to Predictive Performance | Buildings Industry projections for 2026 suggest that convergence among AI agents, IoT sensors, and cloud platforms may address longstanding 25-35% efficiency gaps in commercial properties. Realizing these gains requires open, adaptable platforms and improved industry standards.5Smart Buildings Growth Opportunities 2026 | Frost & Sullivan
Amid this growth, operators confront fragmented communication protocols and cybersecurity risks. Approximately 31% of facility managers identify security concerns, while legacy systems and proprietary architectures continue to impede scalable smart-building rollouts.6Smart Building Market Trends | Report [2034]
Johnson Controls, considered an industry benchmark, recently reported a 7% year-over-year decline in building solutions orders, as order backlogs decreased due to postponed non-residential construction in North America and Europe. The company cited stable service revenues, though capital expenditures shifted toward software, contributing to a slowdown in momentum.7Johnson Controls stock faces headwinds amid building tech slowdown and tariff risks
Outlook
As the convergence of information technology and operational technology accelerates, procurement teams and integrators must prioritize open standards, cybersecurity, and interoperability. Sustainable procurement and adoption of AI-enabled platforms may help reduce adoption barriers. However, until systems integration improves and procurement ecosystems align, smart-building sector growth is expected to remain subdued.
