It is Time for a Business Model Disruption by Bill Attardi - Energy Watch News


It is Time for a Business Model Disruption by Bill Attardi

Let me start with a quote from Jack Welch: If the rate of change on the outside is greater than the rate of change on the inside, the end is near. Disruptive change can do that to your business and can be a disaster to a successful traditional business. Change is just not good for a successful business unless your core business model is strategically receptive to disruptive innovation. Not many are…especially, I might add, in a traditional lighting industry. It just was not necessary to change in the past. Even if you were mediocre, you can survive selling a product category that has universality of use, like lighting. Today, you cannot be mediocre. Those starting new ventures or new players, certainly some major mega-game changers in lighting for the first time, are looking to disrupt an established industry like lighting.

If lighting is not just about illumination anymore, then your business model is just not about vending lighting products anymore. So what is it about? We are moving from traditional lighting to smart lighting to intelligent lighting at a rate of change never seen before. We have lived through the many lighting product evolutions before and the same players have always dominated. The new innovative SSL systems are just another incremental product improvement… right? But it may be a very disruptive innovation since it has the potential over time to replace every single lighting system commercially available. But, it’s only affecting the lighting business you say… Well, maybe not…

Let’s agree that the SSL digital technologies are still concerned with quality of light, energy efficiency, and long-life and it will always be thus. Smart Lighting, however, will not only allow consumers to manipulate the timing, intensity, and quality of light but it will internally interact and track and react and adapt to the users’ living and working patterns. That’s change, disruptive change. As I said, it’s not just about illumination anymore. What is it all about Alfie?

☼ Light levels
☼ Optics – photometrics
☼ Energy monitoring
☼ Control capabilities
☼ Daylight harvesting
☼ Automatic dimming
☼ Occupancy Sensors
☼ Atmospherics
☼ Color temperature
☼ Color tuning
☼ CRI / TM-30
☼ Emergency
☼ Security
☼ Grow lights
☼ Circadian rhythm
☼ Productivity

Intelligent Lighting goes even further: it could be the core connector to every device you own (IoE). It has its own apps, embedded devices programmed to research the space, the ability to transmit sensitive information, wireless protocol implementations, web services, backend infrastructure and stuff we are just hearing about:
☼ IoT / IoE / PoE / Li-Fi / VLC
☼ Networking platforms
☼ Interactive connectors
☼ Embedded controls
☼ Automatic energy monitoring
☼ Mobile wireless communications
☼ Demand Response
☼ Automated Demand Response
☼ Facial recognition
☼ Plug & Play
☼ Integrated security monitoring
☼ Web services
☼ Research the space
☼ Compatibility protocols
☼ Locator systems
☼ Business processes
☼ Timing & intensity of light
☼ BIG DATA

Be careful, new entrants can thrive in such a disruptive changing environment. Traditional business models will not. Stay tuned as I plan to provide some positive guidelines to disrupt your business model for success in disruptive times…

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6 comments on “It is Time for a Business Model Disruption by Bill Attardi

  1. Ross Reida says:

    Spot on Bill, agree wholeheartedly! Although I am a “newbe” to the lighting industry, I can share that the first lighting retrofit I financed in 2012 was my first and last high-efficiency linear fluorescent deal. Everything since mid-2012 has been LED!

  2. Gary Mann says:

    Bill:

    You are so right. Just this past week, I sponsored a “lunch and learn” with a “prestigious” national account distributor. Thru my entire presentation showing various LED solutions, controls coming on board, new technologies such as tune able LED fixtures, one saleswoman pressed me the entire time for “what’s the price”. ROI? Huh? Quality of light? Huh? Value to the customer? Huh? There are just so many distributor salespeople who have no clue as to the Tsunami over taking them, Why can’t we just quote a price and wait for th order like we always did? Extremely frustrating. It just keeps pushing the notion that the paradigm had changed. If the distributor cannot add value than they have no business being in the equation.

  3. Bart Pasternak says:

    Bill,
    As usual, you have your hand on the pulse of the industry and a clear vision of the future. As one who has shared this vision for years, I am delighted to see it coming to fruition.
    It is not just an issue of change, change is inevitable. It is the RATE of change which is remarkable. Existing lighting EDs will be OK for a while by simply adding some controlls to their product mix. Manufacturers will continue to offer integrated systems, and traditional EDs will offer them, but the serious renovation market will beost to them unless they device the in house expertise to deal with sophisticated solutions. Some of the largest EDs have made acquisitions to give them that expertise, those without it will pay the price in reduced sales and customer loyalty, the renovation ESCO market I’ll have to raise their game as well. Because these new multi faceted controls will use the light fixture ad a communication network., but do far more than provide energy efficient light, they will interface with every system in the building.
    This is the time for EDs with courage and imagination to diesel the future.

  4. Marc McCord says:

    The days of the lamp and ballast retrofit are pretty much over, but the plug and play LED tubular lamp still has a lot of merit, and the cost has come down to the point that it can work well in most situations, especially where the user doesn’t want to dispose of old fixtures and/or pay labor for the retrofit. The distributor that fully embraces LED is way ahead of the game. And this LED wave has allowed fringe companies to step in and take business away from the major players, although sometimes at the expense of quality. And ballast sales have dropped off of the map, especially at the OEM level – a victim of the LED revoltion. Good article, Bill.

  5. BillAttardi says:

    The marketplace, Bill …
    … is indeed changing. As you observed, the changes are taking place faster and faster.

    As a components supplier to the lighting industry, we are very much involved in change; and what concerns us is that there are many of the smaller assemblers that we believe are not going to make it through the transition. One factor that has pleasantly surprised us is the emergence of LED lamps where the customer simply replaces the lamp from a fluorescent lamp to an LED lamp, and that’s what they call an LED fixture.

    We just got back from a long weekend at one of the top resorts in Wisconsin. It’s called the House on the Rocks. They still had incandescent three-way bulbs in the room fixtures, and T12 lamps in the valances down the hallways. I can tell you that while the industry is changing dramatically, the end-use customers are not moving so fast.
    Warm regards,
    WMBROWN
    CHM, A.L.P.

  6. Rod Heller says:

    It is interesting to watch the industry move. So many of my compatriots, DOE, DLC and others are still focused on energy efficiency. That is passe, any dummy can get 50-60% energy savings. Its about getting light right for the occupant in terms of visual acuity, human health, productivity, and safety. Oh and by the way we have to combine it with digital communication.

    If you are not grasping this concept, you will be going out of business!

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