This post was written by Keith Dawson for UBM Tech’s community Web site All LED Lighting, sponsored by Philips Lumileds. It is archived here for informational purposes only because the All LED Lighting site may go dark at any time. This material is Copyright 2013-2015 by UBM Americas.


Smart Lighting, Network Effects & Platforms

LED-based smart lighting is the Trojan Horse for the Internet of Things in both commercial and residential markets. Whoever succeeds in making it a platform will reap huge rewards.

We saw yesterday how Digital Lumens is bidding to enable an Internet of Things within the enterprise -- what the company is calling the E-IoT. The kind of energy savings such a smart network can drive is nothing short of compelling.

In 2012 and 2013, Digital Lumens participated in a study underwritten by Pacific Gas & Electric at a high-bay warehouse run by Ace Hardware in California. (Here is the final project report.) The upshot was that the warehouse was able to achieve 93% savings in energy for lighting by taking advantage of the sensor data flowing from light fixtures, aided by smart software and human analysis.

Philips Lighting announced a project last month at the Light + Building conference that could put those lighting-related energy savings in the shade. A 17-story office building under construction in Amsterdam (to serve as a regional headquarters for Deloitte) will allow for coordinated control of lighting, heating, and ventilation -- which together make up 70% of the energy usage in modern office buildings.

Deloitte CIO Erik Ubels crowed, "Our building [will be] the most sustainable office in the world," according to LEDs Magazine. And perhaps it will be so.

The office building, which is being developed in partnership with OVG Real Estate, is slated to open in November. The Philips contribution will be a smart lighting system utilizing Power-over-Ethernet (PoE). The system will also incorporate a smartphone-based control UI, so that individuals can control lighting in their vicinity. It seems as if the IP for that part of the project may have come from the people responsible for Philips Hue.

MIT Technology Review conducted an interview with Marshall Van Alstyne, an economist and business professor at Boston University, who is an expert on network effects and the platforms built upon them. A "network effect" is what happens when every new user added to a network makes the whole more valuable to all. An example is the telephone. A "platform" starts with open access to the facilities within a network, but to that must be added a business reason for outsiders to add yet more value to the network. Examples of platforms of this sort are the iPhone, Android, and Google Maps.

As you may recall, Philips (sponsor of this site) has opened the Hue application programming interface to outside developers. We can assume that the same will be true of its commercial smart lighting system. Digital Lumens is doing the same thing for its Internet Everywhere smart lighting universe. That's step one. Who will be able to give outsiders a compelling reason -- an economic reason -- to build on those APIs? The answer to that question may determine the big winner in connected lighting.

— Keith Dawson Circle me on Google+ Follow me on Twitter Visit my LinkedIn page, Editor-in-Chief, All LED Lighting

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