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The announcement of a new round of financing for home control company Control4 (see link below) makes this a good time to introduce you to the company and to the burgeoning home area network (HAN) market.
There’s another good reason to run a HAN article now. As I’m watching utilities make their first forays into the space, I see most of them driving full speed straight over a cliff. They are piloting HANs and in-home displays (IHDs) that are the worst of both worlds. They have neither the power necessary for utilities nor the sex-appeal demanded by consumers.
At Smart Grid News, we believe the HAN market could be as large as $3 billion annually within the next three years. The key to reaching this potential will be to provide the capabilities utilities need while also giving a compelling reason for consumers to want these things in their homes. Control4 has the best answer we’ve seen so far. The company combines technical specs robust enough for the most demanding utility, an interface easy enough for the most tech-averse consumer, and applications cool enough to make any neighbor jealous.
The Short and the Long of It
There’s a lot to cover. But long articles are inappropriate in this age of ADTD (Attention Deficit Twitter Disorder). So I put my conclusions up-front in a short summary, followed by the longer details about the HAN market and Control4’s new offering. Our sister site Smart Grid Central has produced a profile with the relevant company information. I’ve listed all links in two places, once at the end of the summary and again at the end of the full piece.
You may know Control4 for its existing home entertainment gear, which is slick but pricey and not designed from the ground up for energy applications. (SGN’s Eric Gunther gave their HC-300 Controller a solid 84 on SGN’s Smart Grid Scorecard, as linked below.) I will be discussing their new, energy-centric EMS-100 product, which they are shopping to utilities but which is not yet shipping.
The company tells me they can supply the EMS-100 package (in-home display and wireless thermostat) for close to $150 at quantity. At that price, a utility might be able to afford to subsidize the purchase and installation in return for the demand response savings it could enable.
Control4’s EMS-100 ships with a wireless thermostat that connects to a wireless in-home display like the one shown here. Out of the box, it has energy management and demand response capabilities, plus a handful of lifestyle applications including weather and photo viewing. If you own or buy a compatible home entertainment system, the in-home display becomes a universal remote control as well.
Prospects for the HAN Market
Let me start with my conclusions about the sector itself:
Even with its early lead, Control4 is going to have a tough time in a market space that is as chaotic as anything I’ve seen in the last decade. Control4 could do everything right and still see mediocre results, simply because so many big companies are poised to spend so much money to send the wrong messages to the wrong people.
In Conclusion
Control4’s home energy management offering embodies a lot of great ideas, but above all it is the Trojan horse utilities need. It is something everyday consumers will eagerly invite into their homes, even though “scary” things like energy management and demand response lurk inside. Control4 has packaged energy management as just one more lifestyle application that runs on a device you’d love to have. If you own (or later buy) a Control4-compatible home entertainment system, the same in-home display that programs your thermostat and shows you messages from your utility also becomes a universal remote control on steroids.
For utilities: If you haven’t started already, you’ll soon be trying to figure out what kind of home energy display to offer to customers. Control4 currently has the best approach from the strategic perspective. You’ll have to decide whether it’s the best choice from the technical and financial perspectives. But even if you go with someone else, you’ll want to look at the Control4 offering for ideas.
For consumers: This is the first home energy management stuff you might actually want in your home.
For vendors who sell home energy gear: Control4 currently has the best channel strategy (just as the iPhone App Store is the best example in the smart phone space). You may want to consider becoming a partner. Even if you go it alone or partner with someone else, you’ll want to study the Control4 partner program for ideas.
For vendors who compete with Control4: This is the current state-of-the-art. Start figuring out how to top what Control4 is doing.
For those who want more details: Skip over the links below and scroll down to continue reading
SGN news article on the Control4 venture funding round Eric Gunther’s review of the Control4 HC-300 SGN article on Google PowerMeter Alex Zheng’s article on Microsoft Hohm CePro article on Control4 and the ZigBee Pro standard
The HAN Market
Today’s homes have multiple systems —audio, video, broadband access, energy controls, security, etc. Increasingly, those systems need to talk to each other, for convenience but also to trade data. They do that over some kind of home area network, whether Wi-Fi or ZigBee or some other.
Researchers and analysts have long tracked each system separately, but now some are beginning to refer to the HAN market as a cohesive sector that embraces the following:
But What’s at the Center?
But what will be at the center as these formerly separate categories connect and converge? The first part of that question is which networking standards will prevail. Typically Wi-Fi (or Ethernet) provides the higher bandwidth connection to cable companies and utilities, and ZigBee (or one of its competitors) to low-power devices such as thermostats and in-home displays.
I say typically, but there are dozens of alternative approaches and widespread debate over which protocols to use. And the vendors don’t seem to understand that the sector won’t take off until the standards are sorted out. They continue to squabble, thereby delaying the big upswing for themselves and everybody else. I’m used to seeing industries shoot themselves in the foot with standards squabbles (Betamax versus VHS, Blu-Ray versus HD, GSM versus CDMA, etc. etc.), but this is the first time I’ve seen a sector grab an Uzi and just hold down the trigger.
It looks like we’ll eventually settle on Wi-Fi and ZigBee. The more interesting question is what will be the standard operating platform —the Microsoft Windows of the digital home. Microsoft made lots of money selling Windows itself, but it also leveraged Windows into huge profits in sectors such as desktop applications, server operating systems, and enterprise applications. Likewise, the owner of the home operating system will control access to home entertainment, home energy management, home automation, and others.
While everybody has been milling about, Control4 has built itself into the closest thing yet to an integrating platform. Its lead is due partly to its technology, partly to its channel strategy, and partly to its partnering programs. But will it be able to maintain its lead with some of the world’s richest tech corporations — Microsoft, Apple, Intel, Cisco, Google —poised to jump into the category?
In my summary, I said that so many big companies were poised to spend so much money to send the wrong messages to the wrong people. Let me elaborate:
So Many Big Companies
Just consider this partial list of the sectors that have turned their eyes to the HAN market:
So Much Money
Control4 is up against deep-pocket competitors willing to invest billions for years to gain market share. Consider Google’s PowerMeter home energy management application. It is decidedly inferior to offerings from Greenbox, Tendril, Aclara, Microsoft, and many others. Yet Google has already signed up eight utility customers. Why? Because they’re giving it away for free.
Now consider Microsoft and the billions it poured into the pit of mediocrity called MSN (or whatever its current name).
Now consider the list of sectors above and realize that at least 20 other multinational giants are eying the home energy space, all of whom have the bankroll to spend for years before they see a return.
The Wrong Messages to the Wrong People
Because Control4 started in the home entertainment space, it can offer an in-home device with a slick interface and access to glitzy applications. The energy management functions are just another useful widget. Control4 can talk to consumers about lifestyle and convenience, including set-it-and-forget-it energy management.
When other HAN vendors talk to consumers about energy management, they talk about getting in-depth information about bills; or about the ability to interact with your utility any time day or night; or as an opportunity to be more green. That’s like selling Budweiser as an opportunity to support America’s hops farmers.
When they talk to utilities, most HAN vendors reveal their lack of understanding of the utility charter and mindset. They chatter about entrepreneurial opportunity, or pioneering new markets, or liberating consumer data. They fail to discuss maintaining reliability, or justifying technology to regulators, or safeguarding privacy and security.
Some vendors think they are going to make an end run around the electric power industry by teaming with telecommunications or cable companies. But even if they are successful in finding another pipe into the home, they’ll still have to deal with utilities to get the data they need.
And when most HAN vendors talk to regulators... well, they don’t talk to regulators. And that sends quite a message right there, doesn’t it?
Control 4’s Current Product Line
The heart of a home control system is the controller, the box with the connections to all the other devices and the brains to control them. Control4 offers a range of controllers from $399-$2499. All of them feature ZigBee compatibility plus tons of I/O to allow those controllers to talk to virtually any consumer electronics. (The company claims it can talk to 5,500 devices today.) They also sell various switches, keypads, and touch screen remotes, as well as some audiovisual gear.
And, of course, Control4 develops both the operating platform itself and most of the applications that sit on top of it. Those applications currently fall into five areas:
New Product for Utilities
Building on top of this home entertainment legacy, Control4 is now approaching utilities with its new “EMS-100.” The package includes a wireless in-home display (IHD) with a five-inch color touch screen, bundled with a wireless thermostat that has a small black-and-white display.
In due course, we’ll ask Eric Gunther and his crew to torture test the EMS-100 and give it a rating. But whether or not it passes all the tests (I suspect it will), I’m describing the specs here because this is what vendors should be aiming for, not those geeky, gawky, single-purpose devices. When it pitches the EMS-100 to utilities, Control4 claims that it combines the functionality of six devices into one:
Out of the box, the IHD will connect not just to the included thermostat and to the utility’s ZigBee HAN, but also to compatible smart meters, temperature sensors, lighting controls, and load control modules (appliance control). The IHD’s tabletop charging unit adds additional connectivity via USB and U-Snap.
It’s All about the Apps
Out of the box, the IHD will include several “lifestyle” applications that look quite appealing on its five-inch screen. It will provide
The IHD also controls the programmable thermostat with a colorful, easy-to-use touch screen interface. And when I say programmable, I mean the ability to define the rules once for "personal events" (vacation, home, away) and then let the system handle it from there. Customers can also control the thermostat via its own, built-in controls or by remote Internet access.
If you look at the results from early pilots with primitive in-home displays, usage falls off after the first three months or so. First of all, who wants to peer at a dinky black-and-white LCD screen and decipher cryptic icons and abbreviated text messages? Second, who wants to tinker with settings every day?
Control4 has a “cruise control” model instead. Customers set their preferences, who then sit back and relax while the system keeps things in bounds. Meanwhile the energy analytics start providing information customers can use to reduce their bills. Two value propositions:
And here’s the secret sauce. The IHD can also become a secondary remote to a larger Control4-compatible home entertainment system for those consumers who own one now or buy one in the future. It’s this upgrade path that provides one of Control4’s greatest benefits —for customers, for utilities, and for Control4’s partners.
Those partners could eventually become a big part of Control4’s success, just as the iPhone’s success is due in some part to the applications it can run. Control4’s IHD runs Linux and supports Flash, giving programmers easy ways to write widgets or even full-scale custom applications.
You’ve got to love Control4’s strategy. If it wins a few of the RFPs now on the table, utilities will subsidize millions of their devices into homes over the next few years. Once they have a Control4 IHD, consumers will start adding new widgets and buying Control4-compatible A/V gear because that same touch screen will also act as a remote control.
Lots of Goodies for Utilities Too
I started by discussing the benefits to consumers, because I think that’s what’s missing from other in-home displays and HAN products —namely, reasons for consumers to want them. But Control4 has put in plenty of good stuff for utilities, too.
For one thing, utilities can send alerts to the in-home display. Those alerts can be a pricing event, a notification of a planned outage, or information about a new money-saving program. You can foresee the day when consumers might come home and glance at their in-home display to see a rebate coupon for a new energy saving refrigerator, or sign-up opportunity for a new time-of-use discount. The utility has full control over status messages and event alerts.
For another, Control4 has embedded basic data collection and analytics into each IHD, to track the thermostat and linked appliances in partnership with Apogee. When carried back to a central system, that data can be examined for patterns. This capability sets up the potential for energy “audits,” energy efficiency recommendations customized for each home, and for dispatchable demand response.
To take advantage of the IHD’s capabilities, Control4 also provides utility customers with a menu of back office services, including:
You can use Control4’s equipment with anybody’s demand response (DR) software, but the company’s own DR back end, called Energy Consumption Optimizer (ECO), has some interesting features. It plugs into load management software from companies such as eMeter and GridPoint. By collecting data from the energy analytics engine embedded in each home’s IHD, it creates a complete profile of the DR capabilities of each home, neighborhood, and community. That profile includes each customer’s preferences and behavior history, including the likelihood the customer will override the DR alert.
Using those profiles, the ECO software allows a utility to treat load control events as dispatchable resources. It provides an accurate projection of the load shed in advance, and, equally important, verification that it occurred.
SGN news article on the Control4 venture funding round Eric Gunther’s review of the Control4 HC-300 SGN article on Google PowerMeter Alex Zheng’s article on Microsoft Hohm CePro article on Control4 and the ZigBee Pro standard
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