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Why Now? The Smart Lighting Control Opportunity for Luminaire and Lamp OEMs

  • 05.08.17
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  • By Erik Davidson

SmartLightingTimeIsNow


Welcome. This is my first post in what will be an ongoing series on Smart Building Control product strategy. The goal is to bring you valuable insights from across the Internet of Things (IoT) landscape in order to help you create the best, most profitable strategy possible, and then keep it up to date with the latest trends — so you never miss an opportunity.

In this post I’m focusing on the IoT-enabled Smart Lighting Control opportunity, which our research shows is one of largest opportunities in the rapidly growing commercial-grade IoT control space.

And, since I happen to be publishing this during the 2017 LIGHTFAIR International conference, I’ll put in a shameless plug to come visit us at Booth #649 in the Intelligent Lighting Pavilion. We’ve got some incredible new demos to show you, and you can see an overview of many of the things we’ll be spotlighting at the booth in this video: Introducing Cortet Lighting Control

THE POWER OF RELATIONSHIPS

As many of you may know, our parent company, CEL, has been doing wireless control and component-based technology innovation for more than 50 years. Over those many decades, we’ve established tens-of-thousands of relationships across numerous industries.

In combination with our own market research, we rely heavily on these relationships to gain insights into what’s going on in the market and to identify the next big opportunity wave for our OEM partners.

What we’re seeing and hearing clearly right now is that there is a uniquely strong opportunity for lighting luminaire and lamp OEMs to enter the Smart Building Control market with their own IoT-based lighting control solutions.

If you’re a luminaire/lamp OEM that has been hesitating to take the plunge into Smart Lighting Control (or perhaps if you’ve already made a run at it in the past but it didn’t go so well) here’s several reasons why we think it’s the right time for you to dive (back) in.

UNIQUELY STRONG MARKET OPPORTUNITY MEETS A UNIQUELY STRONG ADVANTAGE

Latest data show that the Smart Lighting Control market is poised to grow by over 35% to $3.7 billion in revenue by 2020.

With those kinds of figures, there will be a growing number of new startups being formed specifically to take a run at the opportunity.  We are already starting to see this today – I seem to learn about a new smart building or smart lighting control company every week.

However, you as a lighting luminaire or lamp OEM have two unique competitive advantages over these newcomers: unmatched knowledge of the “things” that are being controlled and deep, long-standing industry relationships.

You understand better than anyone what it really takes to design, manufacture, install, troubleshoot, upkeep, and upgrade the lights themselves.

And, perhaps most importantly, you’ve gained this understanding from a real, widespread, hard-won customer base.

This gives you a tremendous advantage in defining the right strategy.  It gives you something that is the most difficult thing to attain: an in-depth understanding of the customer and what it takes to deliver a superior experience to them.

This, in turn, leads to your second major advantage over newcomers: You’ve already built and optimized a successful and far-reaching sales and distribution network for targeted market segments.

You have an enormous head start. For one thing, lighting agents are regional and have regional exclusivities, and it takes years to establish national and international reach. Dealing directly with electrical distributors and electrical contractors can be just as complex and just as fragmented. If you are a successful lighting OEM, you have likely already built these challenging but highly valuable channels.

Startups and new entrants don't have the robust channels you have, other lighting players may not have these either, but you, as an established OEM, do.

THE TIME IS NOW

At this point there may be some of you out there thinking, “yes, we know, but is now really the right time?”  And, there may even be some of you that have already made a play in lighting controls or even in IoT-enabled lighting controls, but it didn’t go very well.

There are three primary reasons why we so strongly believe that now is the right time to make a play in IoT lighting control, even if your previous attempts weren’t successful.

1) Features and capabilities of lighting control systems have become much more sophisticated, and the technology behind them has become far more accessible.

As is often typical in new, disruptive industries, early IoT technologies were, in many cases, overly complex, difficult to integrate, not supported well and in limited supply.

The good news is that all of these circumstances have improved significantly over the past several years as the industry and the technology space have matured.

IoT technologies have become steadily more accessible, reliable, and simple to integrate and use — even as the sophistication and functionality has continued to rapidly increase.

One way things have improved in the IoT technology space is the increased engineering rigor that is now being applied to certain IoT systems.  At the dawn of the IoT, many companies were fast and loose with their development and test methods.  While this is certainly still the case for many, some professional companies with strong engineering processes have also emerged and started to dominate certain sectors of the IoT.

Another good example of how things are improving was covered by our head of engineering, Matt Smith, in a blog he published several weeks ago focused on the rise of the Amazon Echo and Alexa. In Matt’s post, he talks about how open and accessible APIs (which are essentially the defined methods & interfaces for systems to communicate with each other) are opening up the IoT and making control systems & products more accessible to technology developers.

2) The many new entrants and new approaches in the lighting control space have vastly increased the number of partners available. The ecosystem is there.

Just a few years ago, the IoT control ecosystem was relatively fragmented with a small number of serious companies, few partnering opportunities and even fewer mature technology choices.

That has changed. There are now hundreds or maybe even thousands of IoT hardware, software and services companies across an increasingly crowded landscape.  Among them, there are a growing number of serious players that can be trusted.

This is now giving OEMs with successful non-IoT products an easier and more profitably way to enter new markets with IoT-enabled products while introducing much less risk.

Our compay, Cortet by CEL, is one of the companies making this possible with our Cortet solutions for IoT networking and control. The beauty of Cortet is that it allows you to focus on what you know and do best – luminaires and lamps – while giving you the opportunity to easily expand sales, increase margins and create new revenue streams by adding IoT control.

3) If you made an unsuccessful attempt to enter the market in the past, most of the roadblocks and pitfalls you may have faced are going away.

This is the result of the expanding partner ecosystem I mentioned above. With a growing number of experienced, capable partners to choose from, the days of “going it alone” are over. 

Today there are an increasing number of companies that offer OEMs support and guidance in the critical areas that history has shown to be the most difficult for IoT newcomers — and notorious for torpedoing even the best go-to-market strategies.

Examples of some of these functions include after-sale support, technology integration, ongoing system upgrades and maintenance, adjusting to rapidly evolving standards, development of long-term strategic product roadmaps, and more.

UP NEXT: GROWING AND DIVERSIFYING REVENUE

Now that we’ve laid a bit of groundwork on why the IoT lighting control opportunity is so strong right now, my next post will go deeper on the financial opportunity — specifically, why and how IoT lighting control can result in more sales, higher margins, and entirely new revenue streams from service-based revenue and ongoing upgrades.

See you there.

up next

A New Hope for IoT Control: Why Alexa Stole the Show at CES

  • Matt Smith
  • ::
  • 04.21.17

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