Smart Spaces Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Smart Spaces Market Report is Segmented by Type (Solutions and Services), End-User Industry (Commercial and Residential), Application (Energy Management, Occupancy and Space Analytics, Lighting and HVAC Control, and More), Connectivity Technology (Wi-Fi, Zigbee, Z-Wave, and More), and Geography.

Smart Spaces Market Size and Share

Smart Spaces Market (2025 - 2030)
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Smart Spaces Market Analysis by Mordor Intelligence

The Smart spaces market size stood at USD 16.70 billion in 2025 and is forecast to expand at a 12.22% CAGR, reaching USD 29.46 billion by 2030.[1]Thread Group, “Thread 1.4 Product Certifications Pass 670 Milestone,” threadgroup.org The upward trajectory is shaped by falling IoT sensor prices that simplify large-scale deployment, mandatory net-zero building codes that accelerate digital retrofits, and hybrid-work policies that reward real-time space optimisation. Interoperable standards such as Thread 1.4, certified on more than 670 products by Q1 2025, remove integration risks and shorten payback windows. Private 5G rollouts across commercial campuses underpin advanced analytics that lower utilities and maintenance costs while enabling predictive workplace services. Vendors are also scaling software-as-a-service models that bundle continuous optimisation with outcome-based pricing, a shift that converts one-time capital expenditure into recurring revenue. The Smart space market, therefore, benefits from both top-line demand for compliance and bottom-line demand for efficiency.

Key Report Takeaways

  • By type, Solutions captured 68% of the Smart spaces market share in 2024, whereas Services are projected to expand at a 13.87% CAGR through 2030.
  • By end-user industry, the commercial segment led with 59% revenue in 2024; residential deployments are forecast to advance at a 13.75% CAGR to 2030.
  • By application, Energy Management accounted for 34% of the Smart space market size in 2024, while Occupancy and Space Analytics are projected to grow at a 12.67% CAGR.
  • By connectivity, Wi-Fi held 48% of 2024 revenue; Thread/Matter networks are expected to rise at a 13.05% CAGR over the forecast period.
  • By geography, North America commanded 37% of 2024 revenue, yet, Asia Pacific is on track for a 13.53% CAGR through 2030. 

Segment Analysis

By Type: Services scale as clients pivot from ownership to outcomes

Solutions retained the lion’s share at 68% of 2024 revenue, equal to USD 11.36 billion of the Smart space market size. Hardware devices and supervisory software form the digital backbone, yet end-users increasingly outsource optimisation to third parties. Services are set to post a 13.87% CAGR, reflecting appetite for continuous commissioning, remote diagnostics, and AI-driven decision support. BrainBox AI launched its generative building assistant in March 2024, enabling conversational queries about energy anomalies and prescriptive adjustments. Trane Technologies quickly folded the capability into its aftermarket portfolio, bundling autonomous HVAC controls inside outcome-based contracts that guarantee double-digit utility cuts. Managed-service vendors monetise hourly telemetry by feeding algorithms that keep chillers within narrow set-point bands, reducing wear and curbing carbon fees. As labour shortages constrain in-house facility teams, executives view external expertise as risk insurance against performance penalties.

In the long run, hybrid cloud architectures will blur product and service boundaries because device firmware, analytics models, and security patches update continuously. Vendors that own both edge devices and cloud platforms can push over-the-air enhancements without onsite visits, deepening lock-in while squeezing pure-play hardware rivals. The Smart space market therefore rewards firms that pivot from one-and-done installations toward lifecycle stewardship, reinforcing the Services growth premium.

Smart Spaces Market: Market Share by Type
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Note: Segment shares of all individual segments available upon report purchase

By End-user Industry: Residential acceleration meets commercial incumbency

Commercial real estate, healthcare, hospitality and retail collectively generated 59% of 2024 revenue, or USD 9.85 billion of the Smart space market size. Offices pursue flexible seating that demands analytics-ready occupancy data, whereas hospitals track air exchange and device uptime for infection control. Yet residential demand, especially in multi-dwelling units, is forecast to rise at a 13.75% CAGR. Logical Buildings is orchestrating a USD 110 million virtual power plant across multifamily stock to monetise demand response, demonstrating fleet-scale residential economics. SmartRent earmarked USD 10 million in December 2024 to widen landlord adoption of self-service resident portals, access control, and sub-metering. Utilities in deregulated markets offer cash incentives for smart thermostats linked to peak-shave programmes, aligning homeowner interests with grid stability. While consumer price sensitivity remains a restraint, bundled broadband plus energy packages lower acquisition friction, tilting the Smart space market toward balanced demand across sectors by 2030.

Regulators also push home energy management via mandatory sub-meters in new apartments across parts of the EU and select US states. This policy tailwind elevates residential volumes, though per-unit revenue lags commercial averages. Vendors combat margin dilution through platform multiproduct cross-sales spanning security, wellness and eldercare monitoring. As service portfolios deepen, the residential curve narrows its gap with commercial incumbents, confirming the Smart space industry’s evolution into a ubiquitous infrastructure layer.

By Application: Analytics ascend while energy management remains core

Energy Management held 34% of 2024 spending, anchoring the Smart spaces market at USD 5.68 billion. Mandatory disclosure of carbon intensity and volatile power tariffs sustains the category. Occupancy and Space Analytics, however, is pencilled in for the fastest 12.67% CAGR as hybrid-work firms seek real-time dashboards that reconcile lease costs with headcount trends. Schneider Electric’s 2025 SpaceLogic controller embeds edge AI to coordinate HVAC, lighting, and blinds, slicing energy by up to 35% in pilot sites. In parallel, grocery-chain refrigeration projects such as Hussmann’s Refrigeration IQ deploy computer vision to detect leaks before refrigerant-loss fines mount. Data-rich analytics pipelines become revenue engines themselves, with some landlords packaging anonymised utilisation trends for workplace designers. As models mature, insight outputs will integrate with enterprise planning suites, reinforcing the Smart space market’s strategic role in real-estate valuation.

Legacy categories like Security and Access Management converge toward unified credential platforms that share device identifiers with occupancy systems, improving threat resolution times. Facility Automation Integration Platforms glue disparate OEM equipment into a single semantic layer, reducing integration debt. Vendors that expose open APIs gain ecosystem gravity, whereas closed protocols risk isolation as Thread/Matter momentum compounds.

Smart Spaces Market: Market Share by Application
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By Connectivity Technology: Thread/Matter momentum challenges Wi-Fi orthodoxy

Wi-Fi supplied 48% of 2024 link-layer revenue, courtesy of mature infrastructure and high throughput. Yet Thread/Matter is forecast to post a 13.05% CAGR through 2030 as energy-scavenging radios extend battery life and mesh topology trims gateway counts. Apple baked Thread 1.4 into tvOS 26 in 2025, while Google and Amazon prepare 2026 rollouts, legitimising the stack for commercial estates. Siemens, Enlighted, and Zumtobel now co-develop intelligent lighting that doubles as a Thread backbone, accelerating fixture-level sensor density. Bluetooth Low Energy survives for beaconing and proximity tags, whereas NB-IoT/LoRaWAN address long-range metering. Wired Ethernet with Power-over-Ethernet persists in CCTV and high-draw LED drivers. The connectivity shakeout shrinks custom gateway SKUs and simplifies commissioning, lowering total cost of ownership and broadening the Smart space market.

For emerging-market projects where Wi-Fi affordability remains decisive, multi-radio modules ensure forward compatibility. Vendors hedge by certifying identical firmware across Thread, Zigbee and Bluetooth, enhancing supply-chain flexibility. In effect, interoperability ceases to be a differentiator and becomes a prerequisite, shifting competitive focus to analytics depth and service quality.

Geography Analysis

North America contributed 37% of 2024 revenue, driven by stringent state-level energy codes and early adoption of hybrid-work analytics. California’s aggressive standards and federal tax credits support deep retrofits, while private 5G pilots in logistics parks validate latency-sensitive use cases. Honeywell recorded 8% organic growth across its building automation lines in Q1 2025, underpinned by US demand for cloud-native dashboards.[4]Honeywell, “Q1 2025 Form 10-Q,” honeywell.com Cyber-security regulation accelerates managed-service uptake as firms outsource compliance tasks to trusted vendors. Retrofit costs for ageing stock temper rollout pace, but outcome-based contracts that tie fees to measured savings unlock conservative budgets, keeping the Smart space market on a solid expansion path.

Asia Pacific is on track for a 13.53% CAGR and will increasingly tilt global volume. China allocated USD 4.5 billion to smart city pilots in its 2024 budget, stipulating that all new municipal buildings integrate digital twins. Japan’s Society 5.0 roadmap bundles smart buildings with wider robotics and mobility networks, while India’s Smart Cities Mission spans 8,000 live projects worth USD 19.67 billion. Corporate investments match the public push: Toyota’s Woven City near Mount Fuji serves as a private testbed for sensor-dense neighbourhoods. Heterogeneous regulatory landscapes complicate multinational scaling, but common motivations—urban density, energy security and ageing populations—sustain demand across the region.

Europe maintains disciplined growth on the back of climate policy. The EU’s zero-emission mandate guarantees a replacement market for inefficient controls, and GDPR ensures that privacy-by-design features carry premium pricing. Siemens committed EUR 750 million to regenerate Berlin’s Siemensstadt with digital twins, reflecting confidence in smart campus models. Middle East and Africa trail in adoption but showcase showcase megaprojects: Saudi Arabia’s Neom and the UAE’s Masdar City rely on fully digital building fabrics, serving as regional proof points. Budget volatility and political risk keep deployment skewed to government-backed ventures, yet demonstrable returns draw private co-investors over time, widening the addressable Smart spaces market.

Smart Spaces Market CAGR (%), Growth Rate by Region
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Competitive Landscape

The competitive field is moderately fragmented. A cohort of diversified conglomerates—Honeywell, Siemens, Johnson Controls, ABB, and Schneider—leverages large installed bases to cross-sell analytics subscriptions. Each is bulking up through targeted M&A: Honeywell finalised the USD 4.95 billion purchase of Carrier’s Global Access Solutions in June 2024, folding credential management into its Forge stack. Trane acquired BrainBox AI in December 2024, gaining autonomous HVAC controls and a 14,000-site footprint for data harvesting. Market disruptors include software-first firms such as ThoughtWire and Spacewell that pitch vendor-agnostic digital twins, competing on deployment speed rather than hardware breadth.

Interoperability standards de-risk smaller entrants. Thread 1.4 and Matter certification levels the connectivity playing field, allowing sensor start-ups to sell into large enterprises without proprietary gateways. Private 5G creates a new value chain where telecom operators and edge-infra specialists like Nokia and HPE GreenLake vie to host building automation workloads. Patent filings emphasise semantic data models that simplify multi-system orchestration, indicating the next battleground is contextual data not device count.

Price competition is muted because buyers prioritise proven savings and regulatory compliance over lowest capex. Vendors differentiate with AI credibility: Johnson Controls markets generative AI planning tools inside OpenBlue, while Bosch earmarked EUR 2.5 billion for AI agents that learn behavioural patterns to pre-empt maintenance. System integrators such as Accenture and Infosys play orchestration roles but do not control device roadmaps, positioning hardware-software hybrids to capture the lion’s share of future Smart space market expansion. 

Smart Spaces Industry Leaders

  1. ABB Ltd

  2. Siemens AG

  3. Adappt Intelligence Inc.

  4. Spacewell Faseas

  5. Cisco Systems Inc.

  6. *Disclaimer: Major Players sorted in no particular order
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Recent Industry Developments

  • February 2025: ABB and Samsung Electronics linked ABB InSite with SmartThings Pro to extend home-to-commercial energy optimisation.
  • January 2025: Bosch announced EUR 2.5 billion investment in AI agents for smart building automation through 2027.
  • December 2024: Trane Technologies completed the acquisition of BrainBox AI for autonomous HVAC control.
  • December 2024: SmartRent launched a USD 10 million programme to accelerate multifamily smart-space innovation.

Table of Contents for Smart Spaces Industry Report

1. INTRODUCTION

  • 1.1 Study Assumptions and Market Definition
  • 1.2 Scope of the Study

2. RESEARCH METHODOLOGY

3. EXECUTIVE SUMMARY

4. MARKET LANDSCAPE

  • 4.1 Market Overview
  • 4.2 Market Drivers
    • 4.2.1 IoT-enabled device proliferation and falling sensor prices
    • 4.2.2 Accelerated post-COVID hybrid-work redesign of offices
    • 4.2.3 Mandatory green-building / net-zero regulations
    • 4.2.4 Rapid 5G private-network roll-outs in commercial estates
    • 4.2.5 AI-driven workplace analytics reducing real-estate OPEX
    • 4.2.6 Rise of occupancy-based insurance and leasing models
  • 4.3 Market Restraints
    • 4.3.1 High upfront retro-fit costs for brown-field buildings
    • 4.3.2 Cyber-security and data-privacy liabilities
    • 4.3.3 Inter-vendor interoperability gaps and standards fragmentation
    • 4.3.4 Volatility in commercial real-estate valuations
  • 4.4 Value Chain Analysis
  • 4.5 Regulatory Landscape
  • 4.6 Technological Outlook
  • 4.7 Porter's Five Forces Analysis
    • 4.7.1 Threat of New Entrants
    • 4.7.2 Bargaining Power of Buyers/Consumers
    • 4.7.3 Bargaining Power of Suppliers
    • 4.7.4 Threat of Substitute Products
    • 4.7.5 Intensity of Competitive Rivalry

5. MARKET SIZE AND GROWTH FORECASTS (VALUE)

  • 5.1 By Type
    • 5.1.1 Solutions
    • 5.1.1.1 Software Platforms
    • 5.1.1.2 Hardware and Edge Devices
    • 5.1.2 Services
    • 5.1.2.1 Professional Services
    • 5.1.2.2 Managed Services
  • 5.2 By End-user Industry
    • 5.2.1 Commercial
    • 5.2.1.1 Offices and Co-working Spaces
    • 5.2.1.2 Retail and Malls
    • 5.2.1.3 Healthcare Facilities
    • 5.2.1.4 Hospitality and Leisure
    • 5.2.2 Residential
    • 5.2.2.1 Single-family Homes
    • 5.2.2.2 Multi-dwelling Units
  • 5.3 By Application
    • 5.3.1 Energy Management
    • 5.3.2 Occupancy and Space Analytics
    • 5.3.3 Lighting and HVAC Control
    • 5.3.4 Security and Access Management
    • 5.3.5 Facility Automation Integration Platforms
  • 5.4 By Connectivity Technology
    • 5.4.1 Wi-Fi
    • 5.4.2 Bluetooth Low Energy (BLE)
    • 5.4.3 Zigbee
    • 5.4.4 Thread / Matter
    • 5.4.5 Z-Wave
    • 5.4.6 NB-IoT and LoRaWAN
    • 5.4.7 Wired (Ethernet / PoE)
  • 5.5 By Geography
    • 5.5.1 North America
    • 5.5.1.1 United States
    • 5.5.1.2 Canada
    • 5.5.1.3 Mexico
    • 5.5.2 South America
    • 5.5.2.1 Argentina
    • 5.5.2.2 Brazil
    • 5.5.2.3 Rest of South America
    • 5.5.3 Europe
    • 5.5.3.1 United Kingdom
    • 5.5.3.2 France
    • 5.5.3.3 Germany
    • 5.5.3.4 Rest of Europe
    • 5.5.4 Asia Pacific
    • 5.5.4.1 China
    • 5.5.4.2 Japan
    • 5.5.4.3 India
    • 5.5.4.4 South Korea
    • 5.5.4.5 Rest of Asia Pacific
    • 5.5.5 Middle East and Africa
    • 5.5.5.1 Middle East
    • 5.5.5.1.1 Saudi Arabia
    • 5.5.5.1.2 United Arab Emirates
    • 5.5.5.1.3 Turkey
    • 5.5.5.1.4 Rest of Middle East
    • 5.5.5.2 Africa
    • 5.5.5.2.1 Nigeria
    • 5.5.5.2.2 South Africa
    • 5.5.5.2.3 Rest of Africa

6. COMPETITIVE LANDSCAPE

  • 6.1 Market Concentration
  • 6.2 Strategic Moves
  • 6.3 Market Share Analysis
  • 6.4 Company Profiles (includes Global level Overview, Market level overview, Core Segments, Financials as available, Strategic Information, Market Rank/Share for key companies, Products and Services, and Recent Developments)
    • 6.4.1 ABB Ltd
    • 6.4.2 Siemens AG
    • 6.4.3 Cisco Systems Inc.
    • 6.4.4 Schneider Electric SE
    • 6.4.5 IBM Corporation
    • 6.4.6 Microsoft Corporation
    • 6.4.7 Honeywell International Inc.
    • 6.4.8 Johnson Controls International
    • 6.4.9 Huawei Technologies Co. Ltd.
    • 6.4.10 Hitachi Vantara LLC
    • 6.4.11 ICONICS Inc.
    • 6.4.12 Spacewell (Nemetschek Group)
    • 6.4.13 SmartSpace Software PLC
    • 6.4.14 Ubisense Ltd.
    • 6.4.15 Adappt Intelligence Inc.
    • 6.4.16 Enlighted Inc. (Siemens)
    • 6.4.17 Bosch Building Technologies
    • 6.4.18 Legrand SA
    • 6.4.19 Crestron Electronics Inc.
    • 6.4.20 Verkada Inc.

7. MARKET OPPORTUNITIES AND FUTURE OUTLOOK

  • 7.1 White-space and Unmet-need Assessment
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Global Smart Spaces Market Report Scope

Smart space is a physical environment deployed with technologies, such as monitors and sensors, which allow humans to interact with the technology-enabled systems.

By Type Solutions Software Platforms
Hardware and Edge Devices
Services Professional Services
Managed Services
By End-user Industry Commercial Offices and Co-working Spaces
Retail and Malls
Healthcare Facilities
Hospitality and Leisure
Residential Single-family Homes
Multi-dwelling Units
By Application Energy Management
Occupancy and Space Analytics
Lighting and HVAC Control
Security and Access Management
Facility Automation Integration Platforms
By Connectivity Technology Wi-Fi
Bluetooth Low Energy (BLE)
Zigbee
Thread / Matter
Z-Wave
NB-IoT and LoRaWAN
Wired (Ethernet / PoE)
By Geography North America United States
Canada
Mexico
South America Argentina
Brazil
Rest of South America
Europe United Kingdom
France
Germany
Rest of Europe
Asia Pacific China
Japan
India
South Korea
Rest of Asia Pacific
Middle East and Africa Middle East Saudi Arabia
United Arab Emirates
Turkey
Rest of Middle East
Africa Nigeria
South Africa
Rest of Africa
By Type
Solutions Software Platforms
Hardware and Edge Devices
Services Professional Services
Managed Services
By End-user Industry
Commercial Offices and Co-working Spaces
Retail and Malls
Healthcare Facilities
Hospitality and Leisure
Residential Single-family Homes
Multi-dwelling Units
By Application
Energy Management
Occupancy and Space Analytics
Lighting and HVAC Control
Security and Access Management
Facility Automation Integration Platforms
By Connectivity Technology
Wi-Fi
Bluetooth Low Energy (BLE)
Zigbee
Thread / Matter
Z-Wave
NB-IoT and LoRaWAN
Wired (Ethernet / PoE)
By Geography
North America United States
Canada
Mexico
South America Argentina
Brazil
Rest of South America
Europe United Kingdom
France
Germany
Rest of Europe
Asia Pacific China
Japan
India
South Korea
Rest of Asia Pacific
Middle East and Africa Middle East Saudi Arabia
United Arab Emirates
Turkey
Rest of Middle East
Africa Nigeria
South Africa
Rest of Africa
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Key Questions Answered in the Report

What is the current size of the Smart space market?

The Smart space market size reached USD 16.70 billion in 2025 and is projected to hit USD 29.46 billion by 2030.

Which segment is expanding fastest?

Services are forecast to post the highest 13.87% CAGR as enterprises shift from capital purchases to managed optimisation contracts.

How large is the Smart space market share of North America

North America accounted for 37% of 2024 revenue, the largest regional share in the industry.

Why are Thread and Matter standards important?

They enable devices from different manufacturers to interoperate without custom gateways, lowering integration costs and accelerating deployment.

What role does private 5G play in smart buildings?

Private 5G delivers low-latency, interference-free connectivity that supports mission-critical applications such as autonomous HVAC control and high-resolution video analytics.

Which application area leads spending today?

Energy Management holds the top spot with 34% of 2024 revenue, reflecting the direct financial returns of reducing electricity and heating costs.

Page last updated on: July 8, 2025

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