lighting as-a-service
DESCRIPTION
These slides use concepts from my (Jeff Funk) course entitled Biz Models for Hi-Tech Products to analyze the business model for Philips Lighting as a Service. Philips provides lighting services for cities and buildings in return for the cost savings from using LED lights. LED lights are more efficient than are incandescent and fluorescent lights and intelligent sensors enable further gains in efficiency through dimming when vehicles or people are not present. These slides describe the specific value proposition for cities, building owners, and other specific customers and other aspects of the business model such as the method of value capture, scope of activities, and method of strategic control.TRANSCRIPT
Lighting-as-a-ServiceBusiness Model
Goh Siew Lee (A0129434E)
Thomas Chan Beng Soon (A0133076L)
Varsha Kulkarni (A0119555Y)
Agenda
Introduction
Value Proposition
Competitor Analysis
Market Assessment
Value Capture
Scope of Activities
Strategic Control
Future Market
Upgrades lightings at no upfront cost
Provides maintenance
Provide free energy audits,
technical assistance and its new
financing option
Share Electricity Savings from using LEDs
More than 120 years in lighting business
What is Lighting-as-a-Service?
High Up-Front Cost
• Country Mayors/Agencies award Tenders to System Integrators to change out CFL tubes to LED
• High Upfront Investment
Source: http://www.lta.gov.sg/apps/news/page.aspx?c=2&id=1ea2b1da-a8b7-4dd1-b831-84774152643dg
Source: Lighting the clean revolution Jun 2012, page 29
Street Lighting Concerns
HIGH UP-FRONT INVESTMENT !
Light Bulb Replacement
Manpower + Vehicle Rental
Lamp Post Modification
Intelligent Building Concerns
Philips Lighting BusinessPersonal Wireless Lighting
Smart Cities requires IoT
SENSORSWIRELESS
CONNECTION
REMOTE ACCESS
CONTROL
INTELLIGENT BUILDING
MANAGEMENT
Philips - Smart City through Lighting
Lighting affects how people think and feel about their city
Deserted urban centre into a vibrant and inviting space
Without wasting precious energy or resources
Help with everything from creative design and implementation
End to end services that will limit risk
of investments
Sustainability and Energy Savings
Emotions
Safety
In Control
Consultancy
Confidence
Responsible
Value Proposition
Lighting-as-a-Service
Source: Cisco and Philips, 2012
Shift in Lighting Operations
Traditional Lighting Intelligent Lighting
Physical Failure Inspection Remote Monitoring
Paper-based Mapping and Archiving Smart Asset Management
Undifferentiated Lighting LevelsSmart Dimming and Scene Setting
Estimated-based MeteringIntelligent Energy Metering and Billing
Source: Lighting the clean revolution Jun 2012, page 30
Smart Street Lightings
Remotely monitor and adjust LED output through Smart Controls allows for three sources of financial savings:
Remote detection of faults and failures
GPS mapping of luminaires
3. Minimizing Maintenance Costs
Dimming lights To match required standard
and trimming output at sunset and sunrise
During periods of lower pedestrian-traffic conflict
1. Maximizing Energy Savings
Dimming, and through adjusting light output upward as the product depreciates over time
2. Maximizing LED Lifespan
Intelligent Buildings
Lighting and Illumination Intensity Sensor
Networked Lighting Control Colour Tuning Bi-Level Switching and Dimming based
on occupancy and ambient sensors Failure Monitoring
Reduces Power Consumption Wireless Integration of Sensors and
Controls Reduces Installation Cost
No Upfront CostOperational Efficiency Improved Worker Productivity Smart MaintenanceImproved Corporate’s Social Responsibility Contribution to reducing energy consumption
and CO2 emissions
Lighting-as-a Service
Source: http://www.automatedbuildings.com/
LED Cost Evolution
Source: Lighting the clean revolution Jun 2012, page 18
Philips Competitors
Potential LED Manufacturers
Potential System Integrators
Lighting-as-a-Service
Philips has capabilities in all major aspects of lighting
Source: http://www.newscenter.philips.com/pwc_nc/main/corpcomms/resources/corporate/investor/20130917-London/03_Rondolat_20130917.pdf
Strong Presence
Developing Presence
Competitor Analysis
Source: Philips Lighting, Eric Rondolat, CEO Philips Lighting
Leader in Global LED Lighting Sales
Competitive AnalysisStrength
• Global Presence• High Investment in R&D• Extensive numbers of Patents• Award –Winning Products• Extensive Knowledge• Strong Reference
• Acquisition of Companies• Segment Driven Approach
• Competitive Pricing• High Sunk Cost and R&D
• Strong Competition • Counterfeit Products
Opportunities
ThreatWeakness
Strengths
Market Assessment
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Customer Types
Intelligent BuildingsPublic Lightings
Homes
Smart Street Lightings Intelligent Buildings
Residential Streets
Parks & Recreation
Areas
Roads Carparks
Industrial Commercial
Public Housing Transport
Lighting-as-a-Service
High Electricity Costs Make LEDs Economical
Higher the cost of electricity, Faster the payback period!
LED Trials on Street Lightings
Source: Lighting the clean revolution Jun 2012, page 21
Trials conducted shows that institutions are collecting
information to resolve uncertainties and clarify the
relative advantages and disadvantages of a new
technology before switching
Total Market – Potential Smart Cities
Source: Google Images
19% of global electricity
consumed by Street
Lightings
40% of electricity
savings through
switching to LED
33% of world’s roads
using old technology
Potential global
savings of USD 13.1
billion annually
Smart Street Lightings Market
Delhi
Total Street Lightings= ~160,000 Potential Savings= $16.6 million
London
Total Street Lightings= ~35,000Potential Savings= $4 million
Singapore
Total Street Lightings= ~96,000Potential Savings= $10 million
Sydney
Total Street Lightings= ~22,000 Potential Savings= $2.3 million
Washington
Total Street Lightings= ~13,000 Potential Savings= ~ $2 million
Cape Town
Total Street Lightings= ~210,000 Potential Savings= $21.8 million
Intelligent Buildings Market
Lighting reduced to
30% of present use, with smart
control.
Reducing energy usage
by 40% --replacing
with LEDs
Building energy
management system
Potential savings with
a shorter payback period
Expected annual growth of roughly 50 percent through 2015
By 2020, the LED share of the lighting market could realistically reach 90 percent.
CAGR – Compound Annual Growth Rate
GlobalLED
Lighting Market Forecast
Intelligent Buildings Market
Scope of Activities
Partnership with Suppliers &
SubcontractorsInstallation & Commission
MaintenanceServices
Lighting-as-a-Service
Consultancy & Financial Options
Trial Evaluationwith CustomersLED Trial
Outsource to Local Contractors
Outsource to Local Contractors
Lighting-as-a-Service Value Capture
Smart Street Lightings
LED TrialEvaluation
Intelligent Buildings with LED
Potential Market Identifications
No upfront installation cost Provide free energy audits, technical assistance
No upfront installation cost Provide free energy audits,
technical assistance and its new financing option
Provide Maintenance
Failure Monitoring
Wireless Integration of Sensors & Control
ColourTuning
Customers
Networked Lighting Control
Bi-Level Switching
& Dimming
Lighting-as-a-Service
Reduce Power ConsumptionIncrease LED Lifespan
Reduce Maintenance Reduce Installation Cost
Shared Energy Savings from using LEDs
Smart Street Lightings Value Capture
Smart Street Lightings
GPS Mapping of Luminaires
Smart Street Lightings Value Capture
Source: Campus-Wide Networked Adaptive LED Lighting
University of California, Davis, Over 1,500 Street Lightings
$91,277
$120,909
$29,632
Failure Monitoring
Wireless Integration of Sensors & Control
ColourTuning
Customers
Networked Lighting Control
Bi-Level Switching
& Dimming
Intelligent Buildings
Lighting-as-a-Service
Reduce Power ConsumptionIncrease LED Lifespan
Reduce Maintenance Reduce Installation Cost
Shared Energy Savings from using LEDs
Intelligent Buildings Value Capture
Intelligent Buildings Value Capture
Source: http://www.greentechmedia.com/articles/read/washington-metro-will-install-leds-at-zero-cost
Washington Metro, Over 13,000 Fixtures
$1,400,000
$2,000,000
$600,000
Strategic Control
First Mover Advantage
High Switching Cost
Strategic Control
Telco Companies
Government Agencies
Network Equipment Manufacturer
LED Luminaires and Retrofit Bulbs Licensing
Program
Private Entities
Strategic Control
Some of Philips’ Patents on LED Lighting Technology:U.S. Patent No. 6,250,774, entitled “Luminaire”U.S. Patent No. 6,561,690, entitled “Luminaire based on the light emission of light-emitting diodes”U.S. Patent No. 6,586,890, entitled “LED driver circuit with PWM output”U.S. Patent No. 6,692,136, entitled “LED/phosphor-LED hybrid lighting systems”U.S. Patent No. 6,788,011, entitled “Multicolored LED lighting method and apparatus”U.S. Patent No. 6,806,659, entitled “Multicolored LED lighting method and apparatus”U.S. Patent No. 6,967,448, entitled “Methods and apparatus for controlling illumination”U.S. Patent No. 7,030,572, entitled “Lighting arrangement”U.S. Patent No. 7,262,559, entitled “LEDS driver”U.S. Patent No. 7,348,604, entitled “Light-emitting module”U.S. Patent No. 7,566,155, entitled “LED light system”
Future Market – Safe City Enabler
Government Agencies
Video Sensor
Gunshot Detector
Central Monitoring
Future Market- Retail Lighting
Connects in-store LED lights with consumer’s smart phones
Uses Visual Light Communications (VLC)
Relies on the store light sensors to transmit data to the camera on a smart phone in fast pulse
What is Retail Lighting App? How does it work?
Benefits
No additional infrastructure to house, power and support location beacons for indoor positioning
Power saving from energy efficient LED lightings
Source: http://spectrum.ieee.org/
Future Value Capture
Smart Street Lightings
LED TrialEvaluation
Intelligent Buildings with LED
Potential Market Identifications
No upfront installation cost Provide free energy audits, technical assistance
No upfront installation cost Provide free energy audits,
technical assistance and its new financing option
Provide Maintenance
Thank You
Q&A