IBM recently purchased Tririga, a software company that provides energy management solutions for buildings. 

Which building IT company will be acquired next?  Perhaps Optimum Energy, Control4, Daintree Networks or Ember. Because of the nature of the market, it’s hard to say.

“There are simply too many [building IT] startups. It confuses customers, investors, and potential partners,” said Lux Research Analyst Oliver Tassinari at the Lux Executive Summit. “[But] a lot of the[se companies] provide value.  It is inevitable that there will be consolidation.”

There have already been several notable acquisitions. Siemens’ bought SureGrid and Site Controls, Constellation Energy purchased CPower, and Serious Materials acquired Valence Energy. One of the trends Greentech Media has noticed is that many of these companies aren’t VC-backed. Conglomerates are value shopping.

Despite these acquisitions, plenty of companies and opportunities remain in the space. Commercial buildings account for 20 percent of the energy in the U.S. and buildings are complex, dynamic environments. General Electric and Intel, for instance, have invested in Scientific Conservation, which uses math from the Space Shuttle program to analyze your building's woes.

“I spend quite a bit of time in San Jose and it seems as if you could sweep technology off the sidewalks,” said Waseem Sheikh, a Senior Director of Cisco’s Innovations Practice. Cisco was an early shopper. It bought Richards-Zeta a few years back.

Lighting Controls will likely soon see acquisitions. Lighting gobbles up 24 percent of energy in commercial buildings and few lights are on networks. A number of companies -- Daintree Networks, Lumenergi, Adura, Redwood Systems -- have emerged in recent years. While Philips has made an acquisition, few others have. (Here's the scorecard.)

Because heating and cooling still consumes more energy than other applications and because we know how to control it, HVAC is still the largest market. According to Lux, potential targets therefore include Optimum Energy, whose technology uses variable controls and algorithms to coordinate and optimize all the different components of an HVAC system, and Microstaq, whose MEMS-based fluid control technology reduces air conditioning systems’ energy consumption. 

Other building controls firms -- think United Technologies, which owns Carrier and UTC Fire and Security -- are more focused on security. UTC might become interested in acquiring a building monitoring company (such as Control4 or AlertMe) that both enhances security and reduces energy consumption. In the same vein, demand response companies as well as component makers are likely targets. In the end, all of these companies are really hardware and software companies with specific applications.

“It is no secret that many of our companies are out on the hunt for aggregators that can help converge hardware and software,” added Cisco’s Sheikh.  “If I was to bet, convergence with legacy, using software, is where a lot of money can be made.”

“We look at how we can put more value into the chips,” said Carrie Freeman, Intel’s Director of Sustainable Business Innovation. “From a security perspective or a manageability perspective, how can we drive some of the things that would normally be complicated from a software perspective and put that functionality in a chip?”

Then there is another segment in this market that we at GTM have recently tuned into: the financial experts. Transcend Equity, Metrus Energy and Skyline Innovations have come up with models in which they agree to retrofit buildings for free. They make money on the subsequent energy savings. Transcend says it can cut power consumption by 25 percent or more.

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Yoni Cohen is a student at the Yale Law School.  A former college basketball reporter for Fox Sports, he tweets about cleantech @Cohen_Yoni.