The LED lighting industry continues to rejuvenate its IoT efforts. In the latest move, Sweden’s Fagerhult Group last week launched an all new “seven reasons” marketing campaign to promote the benefits of connecting luminaires to the internet.
But while end users could finally be ready (watch LEDs Magazine for upcoming stories of installations), a recent update by Signify CEO Eric Rondolat serves a reminder that IoT lighting is not yet bringing in the financial rewards that vendors have long anticipated.
That’s not stopping Fagerhult from reinvigorating. As LEDs reported a month ago, the Habo-based international owner of 12 lighting companies has been readying a new IoT push, waiting for the right time to launch. The moment came last week, as Fagerhult initiated its “7 Reasons For Smart Lighting” drive with a stylish 10-page brochure lauding seven benefits of gathering data from sensors embedded in the lighting infrastructure (you can find a PDF on the Fagerhult corporate website).
The refreshed approach is full of flair that should help catch the attention of a wide swath of end users across sectors including office buildings, retailers, roadways, municipal parks, and more. It is a classy continuation of the marathon “education” of the market which Fagerhult and Signify have long referenced.
That said, while the initiative raises the profile of “sustainability” as a driving force, many of the seven points echo the same reasons that the lighting industry has been struggling to turn connectivity into a success in the decade since vendors first started trying to convince users to get smart.
Health and energy
For Fagerhult, the new list starts with health, wellbeing, energy savings, and the environmental responsibility of circular use of material.
“Light has a profound impact on our health and wellbeing — and we spend about 90% of our lives indoors,” the company notes in its top-of-the-list item, headed "Healthier living". “That’s why the right lighting environment not only makes the office more attractive — it also contributes to the wellbeing of employees. And healthy, happy employees do better work.” Smart lighting mimics daylight patterns and thus fosters human circadian wellbeing, the reasoning goes.
Number two on the list is energy savings, as intelligently controlled lighting can enhance the energy savings of LEDs by turning lights off or down when they are not needed.
“For example, we can override the default settings to dim the lights when daylight conditions are bright, achieving further energy savings,” Fagerhult notes in item two, headlined "Waste less energy".
Similarly, reason three, "Become circular", extols environmental cred.
“As recycling and sustainable practices become ever more important, smart lighting solutions and luminaires are an important part of the path to a circular business model,” Fagerhult notes. Incorporating smart technology not only makes a difference right away but facilitates future circular practices, too.
“Why?” Fagerhult ponders rhetorically. “Because a smart lighting solution keeps you informed of the need for repairs or replacements, it reduces the price of your service costs as it allows you to plan maintenance well ahead. And because smart lighting solutions enable luminaire usage to be tracked, warranties can reflect the actual usage of the luminaire based on burn time, as opposed to fixed time periods. This contributes to a longer lifetime of the lighting asset as realistic warranties allow for the possibility of reusing of the luminaire.”
Delayed data play
Reasons four through seven spin many of the benefits that vendors have long hoped will provide the substantial added income that has eluded the industry. These include using the data collected to provide operational benefits, such as giving facility managers insights on how to reapportion space. Smart lighting can also help provide climate and occupancy information, leading to more effective use of HVAC systems, wayfinding, hot desking operations, sales promotions at stores, and much more.
The key to the profit potential lies in leveraging the collected data. But that process has simply not happened. Certainly not at Signify, where CEO Eric Rondolat said as much when asked by an analyst recently about whether Signify’s impressive growth in connected light points — Signify claims to have 121 million as of Sept. 30 — is translating into income beyond what comes in from the sale of the lights.
“I think the growth there has been quite impressive, close to 25% CAGR [compound annual growth rate] on our estimates,” the analyst observed. “Just wanted to understand how are you looking at incrementally monetizing the revenue per point here?”
Rondolat replied that monetization remains elusive, even though the number of connected light points is one of the highest for any company in the world, if not the highest.
“From these connected points, we can extract a lot of value,” the Signify boss noted. “I would say that cracking the code in terms of monetizing systematically data, we haven't reached that level yet… We are building today, with our IoT platform and with our connected light points, a database and I would say, sensory network, that is capable to generate data that we believe is going to be useful for the future, but it's not meaningful at this point in time.”
The experience at Fagerhult has probably been similar, as it has at Norwegian vendor Glamox. But there are plenty of new stirrings, such as Fagerhult’s seven pointer, Glamox’s impending appointment of a new “chief data and technology officer”, Signify’s extension of IoT offerings outside of lighting, and Zumtobel’s renewed IoT push.
And installations appear to be picking up (again, watch for news on the LEDs website), albeit often without some of the more involved data-oriented applications, which could follow.
With all that, the industry stands at a juncture where IoT profits are coming closer than ever into view on the horizon, although they are likely still a way off.
MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).