The following article was written by Alex Davies who a senior analyst with Rethink Technology Research https://rethinkresearch.biz/about/company/
If you can get past the contentious first sentence it is actually an interesting article particularly about what might be possible in the future working with utility companies:Buddy has acquired LIFX, one of the premiernames in the smart lighting sector, for just $51mn – a bargain price,considering LIFX’s reported $25mn in annual revenues. It’s an indication thateven the stronger brands in the smart home are running into trouble, as earlyinvestors start looking for their exits and subsequent returns. For Buddy, theLIFX lightbulbs are a way to expand its building energy monitoring platform,Ohm, which can leverage LIFX’s brand and install-base. LIFX has struggled inrecent years, swamped by new rivals and also undercut by cheap alternativesthat have flooded the market. It was best known for its colored LED lights,which could be controlled by applications and integrated into most smart homeecosystems. But lighting is one of the markets that has most quickly beencommodified, and so it was effectively running out of time. This seems to bewhy it was sold for such a low price. Buddy has been more focused on thecommercial side of things, providing the hardware and software needed toconnect a building’s energy supply and then monitor its usage. Thisconnectivity then lets Buddy provide an energy monitoring service, powered byits Buddy Cloud, using data gathered by the electricity, gas, water, and steamsupplies, as well as any rooftop solar installations, and the in-building temperatureand humidity readings. Ohm is a pretty impressive platform, and an example ofhow a very focused offering can be developed and pitched to customers. Thanksto the Ohm Link sensor hubs, as well as the Pulse sensors that use infrared todetect the flow of the utility supplies to the buildings, Buddy can quicklyconnect a building to its cloud backend, and then begin providing data servicesto the building owner. These include performance analytics, and the consequentoperational optimization recommendations that can help cut the running costsfor the building. It also encompasses alarm systems, which could warn an ownerif a room’s temperature or humidity exceeded a threshold, which is useful forstorage, catering, and server applications. Now, with LIFX, Buddy can look toexpand into the home space, as well as improve its data generation incommercial settings that opt for LIFX bulbs – which Buddy can recommend orcross-sell to such clients. On the consumer side of things, Buddy doesn’t havesuch an easy route to market. There are very few homeowners looking for acommercial-spec energy monitoring system, but there are quite a lot who areinterested in smart lighting. For the home, the cross-selling could be thereverse, where the LIFX bulbs are a channel that could see Buddy then promote ascaled down version of Ohm. Again though, this would be a small volume market,but there’s a bigger opportunity if Buddy can get the utilities on-board. Weare entering an era where utilities are going to be more sharply criticized forwastage and inefficiency. In their own distribution networks, LPWAN-poweredsensors that push data to cloud analytics platforms have allowed utilities tobetter find and repair leaks, and smart meters in the home have enabled them tobetter understand their customers’ usage habits, which then lets the utilitiespurchase their own supply in a more optimized fashion. In time, the purchasingoptimization will get closer and closer to realtime, for energy at least.However, the utilities don’t know how their customers actually use the productthat they are supplying. With smart meters, they will know time-of-use, but notthe appliances and devices that are running. There are a handful of startupsthat can use machine-learning powered algorithms to identify devices by theirpower signatures, such as Verv, but a platform like Buddy could allow theutility to take things a step further – tapping into a smart home itself. Ofcourse, we’ve seen Google trying this from the opposite direction, using Nestand Google Assistant to move from the smart home into the utility sector.Amazon will undoubtedly be considering a similar tactic, thanks to its strongmarket position, which it can leverage by making itself useful to utilitypartners. At scale, the data gathered from smart homes could facilitate muchleaner energy purchasing from wholesalers or the emergency peaker plants, thanksto both routine efficiency optimization in the home, as well as through demandresponse. A truly smart home would be able to analyze its energy usage and thendetermine where it needs improvement, recommending to its owner that the boilershould be upgraded, or that it seems to lose a lot of heat through windows thatcould do with being replaced. A platform like Buddy could allow the utility totake things a step further – tapping into a smart home itself. White goodsappliances could be monitored for maintenance issues, and devices could be putinto standby mode or switched off entirely depending on the routine of theoccupants. There are a plethora of options for cutting usage and improvingefficiency, just by monitoring usage and comparing the output to the energyinput. Demand-response is the more dynamic option though. The aforementionedefficiency improvements are akin to lowering the baseload usage of a grid,whereas demand-response is a way of reducing peak usage, and therefore avoidinghaving to pay through the nose for additional peak capacity. The smart home iskey to advanced demand-response deployments, and while early experiments havefocused on HVAC usage, the scope of demand-response increases with the numberof connected devices in a home – provided there’s a mechanism that lets theutility alter their energy consumption in order to lower its total demand forenergy. For customers that opt-in to demand-response programs, the reward isusually rebates that lower their total energy bill. Demand -response is still along way from being common in the marketplace, but it does demonstrate how themore innovative utilities could make use of new technologies to improve theirmargins. For providers like Buddy, partnerships and licensing agreements couldprove to be lucrative. There are other approaches though, which don’t requiresuch an extensive reach into the smart home. Northern Powergrid has announcedthat a gamified demand-response test project was a success. It used a mobileapplication to encourage customers to turn off appliances in the home inexchange for points, which would increase their chance of winning a cash prize.The average power reduction was 11%, at 305W, but one customer dropped some4.9kWh.
