define optimal LED lighting wave- length distributions for optimal hu- man outcomes.” Karlicek also pointed to the Io T’s emergence as another major trend that will impact lighting. “Traditional sales channels will need to become savvy about lighting standards, wired and wireless networking protocols, and computer and network systems,” he said. “For the time being, however, properly serving this emerging field will be difficult because of the wide variety of proprietary systems and lack of interoperability.” All of this is developing, necessitat- ing monitoring the market and agility to invest in capabilities at the right time. “Ultimately, distributors will need to become—either alone or as a partnership—both an electrical and networking systems supplier,” said Karlicek. “Distributors need to start investing in re-educating their work- forces so they can be skilled at AC and DC power distribution systems, net- working, and advanced controls.”
Bundling Dan Ryan, vice president of product, Io T solutions, Acuity Brands Lighting ( acuitybrands.com), sees the lighting industry undergoing a process called bundling (the aggregation of individ- ual services to create new value for buyers and sellers in a market). Buy- ers can access more services at a lower cost, while sellers can more profitably access a larger market. He pointed to the computing and consumer electronics industries for examples of bundling and unbundling in action, drawing parallels to the lighting industry. Microsoft bundled services into Windows, the Internet unbundled them again across the web, technology giants like Google and Amazon rebundled them into their platforms, and now some unbundling is occurring as some services are be- ing peeled off. While industry analysts tend to fo- cus on product, bundling also occurs
in distribution. Consider video con- tent distribution. Cable television providers bundled and sold video con- tent. Then video streaming from the Internet became feasible, resulting in an unbundling event. Today, consum- ers can access a wide variety of online content through providers such as Netflix. Ryan believes strong parallels for lighting can be found in the Apple iPhone, which bundled numerous services— phone, camera, etc. Similarly, the lighting industry is going through a bundling phase in which lighting projects are being bun- dled with Io T services and building manage- ment systems. “The world is starting to rec- ognize that lighting is uniquely positioned to be an aggregation point for the deliv- ery of Io T services,” he said. “This is due to its ubiquity in the as-built envi- ronment and the proliferation of net- worked lighting control systems.” As a result, lighting manufacturers are starting to bundle new digital ser- vices with lighting—such as indoor positioning, asset tracking, and occu- pancy analytics. The overriding goal is to leverage installed lighting hard- ware and networking to collect data and use it to improve processes. The result will be larger and higher-end lighting projects. This bundling will continue until standardization and interoperability enable a new ser- vices layer, which will result in some unbundling. For electrical distributors, Ryan sees opportunity in a role that for the foreseeable future will remain the same as it is now. “The powerful economic principle behind bundling is that both buyers and sellers benefit,” he said. “So in that sense, when applied to the lighting channel, electrical distribu- tors will benefit. The sale of higher- end systems will lead to larger project sizes and help fight the commoditiza- tion and price erosion that we’re cur- rently seeing in the traditional light- ing market. For those distributors that strive to move up the value chain, there will be opportunities to develop deeper end-user relationships.” The wildcard is the Io T’s impact on how lighting projects are specified and sold. Ryan pointed out that channel and access to market remain the most im- portant drivers in activity in the light- ing market, not technology. As the Io T enters more specifications, how projects are speci- fied and sold may evolve, but Ryan sees opportunity for distributors that can deliver value. “The real question for distribution is where the intersection is between Io T service sales and the traditional lighting sale,” he explained. “At one level, distribution will sell higher-end systems and will see benefits there. There are also some lighting-channel- specific Io T services—such as preven- tative maintenance and lighting asset management—that will unlock new opportunities for selling to the tradi- tional buyer. “But it’s still very much an open question of how value-added Io T ser- vices will actually be sold and what role the traditional channel will play there,” he continued. “The majority of new services being developed are really orthogonal to what distributors do today. Regardless of how it all plays out, I expect traditional distrib- ution to play a huge role.” ; DiLouie, LC, principal of Zing Comm- unications ( zinginc.com), is a lighting industry journalist, analyst, marketing consultant, and author. Reach him at firstname.lastname@example.org.
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The world is starting to recog- nize that lighting is uniquely positioned to be an aggregation point for the delivery of Io T services.
Acuity Brands Lighting