Maybe the spread of ubiquitous Wi-Fi networks will finally give small commercial buildings the energy efficiency and insight they need, but haven’t been able to afford.SkyCentrics
is asking investors to take that bet. The San Francisco-based startup is seeking to bring a line of Wi-Fi thermostats, rooftop AC sensors, load control devices, smart plugs and power strips to market this year, CEO Tristan de Frondeville said at this week’s Cleantech Forum. And to support them, it has built a cloud-based device management and analytics software platform capable of managing “thousands of buildings [and] tens of thousands of devices,” to turn their second-by-second data streams into valuable building intelligence, he said.
“Anyone who’s got a good Wi-Fi network” can quickly find SkyCentrics’ devices and log them on to its software platform, much like printers or other office equipment is enabled today, he said. That means no need for gateway or bridge devices like those used for ZigBee, Z-Wave or other low-power wireless networks that are the predominant choices for today’s in-building device networks. It also means direct access for mobile platforms, like the iOS and Android apps the company has built.
Finding the sweet spot between high functionality and low cost
The key will be to hit the right level of functionality and ease of use with the right price -- that is, a lower price than the systems that have been scaled down from large buildings to try to fit the small building market.
A typical single building can install SkyCentrics’ system for $400 to $500, de Frondeville said, including a SkySnap load controller/sub-meter device for $150, one thermostat at $100 to $150, and a temperature sensor and CT clamp for $50 apiece. The traditional multi-protocol device for building controls, a Tridium Niagara Jace server from Honeywell, costs about $800, along with about $400 in software licensing fees, he said -- and that’s not counting the cost of wiring connections to key building systems.
As for SkyCentrics’ enterprise software platform, it will be offered on a “freemium” basis to buyers of its hardware systems, including basic visibility and control functionality and two weeks of historical energy data, de Frondeville said.
Adding the deeper enterprise analytics features -- historical data, fault detection, preventative maintenance and other important parts of the value proposition for building monitoring -- costs $1 per month per device, or $30 per device for a three-year license agreement, he said.
Of course, “you have to buy our hardware to get it connected,” he said. “Our go-to-market strategy is to go after the building service providers,” companies that manage installation and ongoing maintenance for lots of building owners, that may do hundreds of millions of dollars in business per year. “All we need is one or two of those companies to work with us.”
Building a hardware-centric business through partners, standards
It won’t be easy for a startup to scale up its hardware goals. But SkyCentrics, formerly named Cloudbeam Technology, does have some noteworthy manufacturing and channel partners on board to bring some heft to its vision, de Frondeville said.
First, it has an unnamed Chinese manufacturing partner ready to build versions of SkyCentrics’ demo-scale technology in large numbers, he said. That partner, which currently sells roughly 200 million thermostats, wall plug timers and other such “dumb” devices into U.S. and European markets, has also pledged $1.5 million in financing, including long-term inventory financing, he said -- an important first step towards its goal of raising an additional $5 million Series A round of financing.
Second, it’s embedding its Wi-Fi connected, cloud-managed capabilities into devices from other manufacturers, including controls and appliance giant Emerson and “thru-the-wall” air conditioner and heater maker Islandaire, he said. Both of those companies are integrating SkyCentrics’s Wi-Fi modules and cloud-connected controls into devices today, at least for demonstration projects.
These integration tasks have been helped along by the development of standards meant to make connecting thermostats and appliances much simpler and more modular, he said. The first is the Consumer Electronics Association’s CEA 2045 standard, which allows for “snap-in” modular communications cards for appliances and thermostats. The second is the OpenADR standard, used to link networked devices to communications signals from utilities or other parties seeking to control their energy use for grid needs.
Emerson has been piloting CEA 2045 and OpenADR-enabled devices for some time, as have many other appliance and thermostat makers. California’s new Title 24 building codes require OpenADR functionality in all new commercial building thermostats and HVAC systems. But most of these programs and products have been designed to meet utility needs, rather than to optimize their usefulness to building owners and managers, he noted. That’s a problem for utilities that want to encourage wider adoption among their customer base.
“Hopefully we can help utilities become friends with their customers,” he said. “The utility can control our devices, thousands of them at a time, and the building owners can control their buildings.”
Challenges and competition for the hard-to-reach small-building efficiency market
Wi-Fi does have its limitations. For example, SkyCentrics requires a cellular Wi-Fi modem to reach rooftop AC units, as do other wireless systems, de Frondeville noted. And Wi-Fi can be problematic for thermostats that lack a connection to building electricity and need to run on batteries, although SkyCentrics is working with low-power Wi-Fi chipset maker GainSpan to manage those devices, he said.
Still, his company decided to stick with Wi-Fi, rather than ZigBee or Z-Wave or another emerging low-power wireless technology, to take advantage of “chasing the cost curve of Wi-Fi downward,” he said.
It’s hard to say whether the Wi-Fi device-to-cloud platform approach will gain traction with this hard-to-serve market. One challenge is creating a platform that meets the widely varying needs of different business segments. Several years ago, a flurry of companies announced their intentions to tackle small and mid-size buildings.
But the few that have announced significant gains in the market have done so by targeting and building up a strong reputation for specific verticals, such as Verisae’s initial focus on grocery stores, or by making sure they pay close attention to the different needs of different verticals, as EnerNOC acquisition Pulse Energy has done. Of course, it’s worth noting that these companies rely on others to provide the building system sensor side of the technology equation, which could open up avenues for companies like SkyCentrics.
On the enterprise asset management side, simply providing an aggregated view of energy assets does not assure that the system’s fault diagnostics or preventative maintenance analytics will yield value. Plenty of startups in this space have foundered on the complexities of finding the true reasons why building systems aren’t working at optimal efficiency, or separating false alarms from real problems, for example. SkyCentrics has partnered with Simularity, a provider of “machine learning for anomaly detection and adverse event prediction,” to tackle this challenge.
It’s also possible that networked devices may not be required to unlock the small commercial building market. Startup PlotWatt, for example, uses a single whole-building energy data sensor and its cloud-based energy disaggregation software to suss out energy waste, signs of equipment failure and other costly building system problems for quick-serve restaurants like KFC, Wendy’s and Dunkin’ Donuts. That doesn’t allow for remote control applications, but it does give restaurant managers the info they need on their smartphones. Other approaches, such as that being piloted by Building Robotics, rely on building occupants to serve as sensors, using their smartphones to instruct building control systems on which areas are too hot or too cold.
Finally, SkyCentrics has plenty of competition from the emerging world of “internet of things” providers. These range from giants like Cisco and Google to startups like Ayla Networks and Regen, which have teamed up to put Regen’s “swarm logic” to use in rooftop AC units and thermostats to automatically adjust temperature setpoints to save energy.