Navigant Research Blog

IoT Provides a Changing Landscape for Lighting

— September 5, 2017

The commercial lighting landscape is shifting these days, giving way to a less siloed market. While historically, lamp and luminaire manufacturers have focused primarily on lamps, the emergence and growth of LEDs with their increased lifespan has led to a stronger market for luminaires, which in turn has negatively affected the lamp market. This has decreased lamp revenue for many incumbent lighting manufacturers.

In order to differentiate themselves within the shifting lighting market, traditional lamp and luminaire manufacturers are looking toward controls and new business use cases. Some use cases provided by lighting controls fall within the Internet of Things (IoT) landscape. Many lighting companies are entering the controls and IoT markets through mergers and acquisitions, rather than focusing solely on internal expansion into those areas.

OSRAM Makes Play toward Increasing IoT Offerings

The German-based lighting manufacturer OSRAM, a spinoff of Siemens in early 2013, has agreed to purchase Digital Lumens. Founded in 2008, the Boston-based industrial and commercial IoT solutions company offers software, products, and systems integration. Digital Lumens’ SiteWorx platform integrates intelligent lighting control, energy use, security systems, and air quality monitoring. The IoT platform will allow OSRAM to strengthen its portfolio for IoT applications. There are currently plans to integrate some of OSRAM’s existing digital services into the platform, such as location-based services utilizing Bluetooth primarily in a retail environment.

Competitive Landscape

While OSRAM has clearly positioned itself to advance its IoT offerings, it faces competition from other lighting incumbents interested in expanding their IoT offerings. Earlier this year, Acuity Brands announced its Atrius Brand, the company’s IoT business solutions portfolio. Atrius provides connectivity through a network of intelligent LED lighting and controls and its software platform that enables indoor positioning, asset tracking, space utilization, spatial analytics, and energy management.

Philips Lighting is also an incumbent that has expanded into this space with its indoor positioning for retail applications and connected lighting for offices utilizing Power over Ethernet (PoE) and SpaceWise wireless technology. Another is Eaton, which has partnered with IoT platform, sensor, and solutions company Enlighted to integrate the company’s hardware, software, and services into Eaton’s LED lighting and controls portfolio.

The technology developments, acquisitions, and partnerships all demonstrate the shifting market and provide a glimpse into the future of commercial lighting. Startups, systems integrators, IT companies, and network providers are mixing with the traditional lighting manufacturers in this market, providing more collaboration and merger and acquisition opportunities. Navigant Research’s upcoming IoT for Lighting report will look at the key players in this industry and provide an overview of the market, including drivers and barriers, technology issues, and a global forecast of hardware, software, and services.

 

Smart Street Lights Shine on Further Advancements in Lighting Innovation

— June 9, 2017

Smart street lighting is growing as a platform for smart city applications, and cities are increasingly seeing the benefits of smart street lighting deployment. The rise of LEDs, in large part due to their increased energy savings, longer life, and declining prices, has launched the connected street lighting market. Companies are working together to help drive innovation and continue the momentum of smart street lighting and smart city adoption.

Driving Innovation

Even with the benefits of LEDs and increased control and data available through a smart street lighting system, there are still hurdles to overcome for widespread adoption. The Smart Cities Council, a global consortium of smart city experts and companies, is working to promote sustainable smart cities that provide clean and healthy living conditions and high quality jobs. The Smart Cities Council has more than 120 members and is continually expanding its presence. In May, Telensa, a specialist in connected street lighting, joined the Smart Cities Council as a North America Lead Partner. The company will work toward the goals of the organization of advancing the development of smart cities. Lead Partners, along with Global Lead Partners, provide financial support and help guide the Smart Cities Council’s actions either regionally or globally, based on partnership level. Global Lead Partners include Cisco, Hitachi, IBM, Microsoft, Schneider Electric, Current, powered by GE, Itron, Sensus, Qualcomm, and SAS Institute, among others.

Providing a Smart City through Lighting

Several cities have started to invest in smart street lighting, which are further advanced than LEDs and have the benefits of increased control and artificial intelligence. The city of Spokane, Washington is one of the latest cities to deploy smart street lights. It is using vision control traffic-adaptive LED street lights with artificial intelligence from Echelon—a developer of open standards control networking platform for lighting and building management. Echelon’s lighting platform transmits traffic information to help reduce response time and improve reliability. Each unit, deployed on traffic intersection street lights, will determine light levels based on traffic volume and reduce or increase light levels accordingly.

Lighting and technology vendors are working to advance their offerings to create a smart street lighting platform that can be utilized as the foundation for a smart city. Though many offerings are currently available on the market, further advancement and price declines will help with continued adoption of smart street lighting systems. Partnerships between lighting and technology providers and utilities, as well as organizations such as the Smart Cities Council, are continuing to advance smart street lighting. This relatively young industry is worth monitoring as it continues to experience growth.

 

Continual Change for the Smart Homes Market

— May 19, 2017

The smart homes market, an important segment of the broader Internet of Things (IoT) market, is continuing to develop through partnerships, acquisitions from a variety of incumbents, and startups with point solutions. 2016 saw many acquisitions in the IoT market, and 2017 seems to be just as promising. With the number of partnerships, acquisitions, and new offerings, it’s clear the smart homes market will also continue to thrive. While there are many new players, the market is seeing consolidation through these partnerships and acquisitions. This consolidation may encourage further development of the smart homes market by mitigating issues such as interoperability—a barrier to adoption.

Expansion through Acquisitions and Partnerships

One of the most recent acquisitions in this market is the purchase of iDevices by Hubbell, an international electrical manufacturer. Hubbell offers a range of solutions for residential, commercial, industrial, and utility applications. iDevices, a smart homes company founded in 2010, has a number of Wi-Fi and Bluetooth-enabled products for connected power, lighting, and climate control—including a connected thermostat, lighting sockets, and dimmable, color-tunable, and scheduled lighting. The acquisition will allow Hubble to further its offerings in the smart home and IoT market by leveraging iDevices’ products, which are compatible with the Apple HomeKit and Amazon Echo.

Rather than an acquisition, Vivint Smart Home—a smart home solutions provider—is looking to grow sales of its offerings via increased adoption through a partnership with Best Buy. The partnership will allow Vivint to sell smart home products in 400 Best Buy stores. It also includes placement of a Vivint employee within each of the stores to better assist customers. This is the first time Vivint Smart Home solutions will be sold within brick-and-mortar stores. Vivint hopes the new aspect of its business will help alleviate one of the largest barriers to adoption of smart home devices: lack of consumer knowledge.

Creating Competitive Advantage

In the quickly growing smart homes market, it is important to gain and maintain a competitive edge. Smart homes vendors are working to differentiate themselves by creating a unique value proposition. The largest companies are working to further expand into the space and maintain market share through acquisitions. On the other hand, smaller companies are looking toward partnerships with larger players like Amazon Echo and Apple HomeKit.

Within the smart homes ecosystem, connected lighting plays a significant role. A recent report, Navigant Research Leaderboard Report: Residential Connected Lighting, analyzes the companies that currently have residential connected lighting offerings available on the market. Thanks to partnerships, acquisitions, and integrated offerings, these companies gain an advantage in the smart homes and broader IoT markets.

Through evaluation of the strengths and weaknesses of these products, it is clear the companies that will continue to grow are those that have created a strong value proposition. As smart home applications gain more traction, it is vital for survival that companies continue to uniquely position themselves in this shifting landscape.

 

100% Renewable Energy by 2050

— May 15, 2017

In April 2017, the City of Portland and Multnomah County in Oregon committed to 100% renewable energy by the year 2050. Ted Wheeler, the mayor of Portland, said, “While it is absolutely ambitious, it is a goal that we share with Nike, Hewlett-Packard, Microsoft, Google, GM, Coca Cola, Johnson & Johnson, and Walmart. We have a responsibility to lead this effort in Oregon.” Other cities in the United States have also committed to renewable goals. Chicago, for example, has committed to 100% renewables for its municipal buildings and operations by 2025. Renewable goals are often tied with increased efficiency in buildings, as this assists in reducing the overall needed energy production, making it easier to rely more heavily on renewables.

At a National Level

Following in footsteps of Portland’s ambitious goal, Oregon Senator Jeff Merkley (D), Vermont Senator Bernie Sanders (I), and Massachusetts Senator Edward J. Markey (D) introduced legislation for the United States to reach 100% renewables by 2050. This 100 by 50 Act creates a plan for 50% of US electricity to be generated by renewables by 2030 and 100% by 2050. Additionally, it would require zero carbon emissions vehicle standards and ban government approval of oil & gas pipelines.

Both Merkley and Sanders understand the importance of local initiatives to propel these aggressive renewable energy goals into reality for the country as a whole. “Starting at a local, grassroots level and working toward the bold and comprehensive national vision laid out in this legislation, now is the time to commit to 100% by 2050,” said Merkley. Sanders already sees these changes occurring, and he believes in the importance of not being limited: “In Vermont and all over this country, we are seeing communities moving toward energy efficiency and we are seeing the price of renewable energy plummet. Our job is to think big, not small.”

The 100 by 50 Act is the first legislation introduced to Congress aimed to completely eliminate fossil fuels for the United States. While it is unlikely such a progressive proposal like this will initially pass, it opens the doors to additional discussions and ideas. The declining costs of renewables provide further incentive to assist in a shift toward greater reliance on renewable energy, such as solar and wind power. Local community initiatives and the individual sustainability goals of leading US companies are helping create a future that does rely 100% on renewable energy. Coupled with these siloed goals, members of Congress will continue to push toward more encompassing legislation, though it will inevitably be a long and trying endeavor.

 

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