Thought Leaders in Internet of Things: Danny Yu, CEO of DainTree (Part 6)

Sramana Mitra: Who else besides Enlighted falls in that pool?

Danny Yu: We don’t compete with some of the companies directly. There’s a company called Digital Lumens that sells fixtures and controls. We, on the other hand, don’t sell the fixtures but sell the controls and the software. They sell this bundled solution where they offer their fixtures and their control system as well as the ability to connect with another fixture, but you require their proprietary end-device to go into that.

Sramana Mitra: I imagine that, just like you, everybody else in the space goes to market through channel.

Danny Yu: No. I’m not going to speak of specific competitors but the companies that we’ve been talking about. Others have chosen to go direct while we are primarily channel-based. We have, what we call, strategic accounts that, because of their size and scale and their desire to work with us, we work with directly. As you can imagine, the building space is big and it’s fragmented.

Sramana Mitra: These implementations are quite cumbersome implementations. Either you need a professional services organization or you need to go to market through system integrators.

Danny Yu: We’ve created what is well known in the IT industry as the VAR channel or Value Added Reseller. These folks have historically often done electrical equipment installation and are now bringing software solutions to this channel. We’ve helped them develop their business around these types of high-value systems. What is attractive to those channels is that, in the past, they had to compete on time and materials. It’s not sticky. You have to compete on the lowest cost. What we offer our channel partners is recurring revenue. You go in with the first project. You sell the first project. Now the customer has another project that they want to implement, they’re going to call that same partner back. That’s the stickiness that we enable our channel partners to participate in because we’re a platform for them.

Sramana Mitra: Let’s now get up to the 30,000-foot level and look at the industry. It looks like you’re saying that adoption of these kinds of solutions and granular control of commercial environments is fairly low. You said 10%?

Danny Yu: This was for networked lighting control. It’s less than 10% We have 90% opportunity to pursue.

Sramana Mitra: What are the trends in the industry right now? What do you forecast as far as industry trends are concerned in the space?

Danny Yu: We see this, more broadly, as enterprise IoT. There are foundational applications and then there’s the extensions that create a multi-billion dollar market very quickly. Let me explain in terms of how the bubble formed in terms of market expansion. First, you have lighting control. Within that, we talk about the trends in LED and integration, which are Electronics 101. They’re happening now and we’re working with some of the top players in the industry to drive that specific application. That drives the entry way. When you now have lighting and HVC, in terms of your platforms board, you now have the two largest loads being managed. Again, we just introduced that a year ago.

What happens now is, you have a compelling platform for most of your energy applications. You can call any VP of Facilities and they say, “Yes, that’s a big part of my expense. If you’ve got something that can handle those at scale, that’s great.” Now that you have that, you can now deploy this IoT platform in these facilities on the basis of just those very straightforward applications providing value. I’ve already mentioned some of these applications that are more controlled than energy savings. People just add these on. In one case, we are controlling showers in a prison. We get all sorts of interesting use cases popping up in the office. You can see how this extends by having that connectivity and then tying that back into an operational application.

This segment is part 6 in the series : Thought Leaders in Internet of Things: Danny Yu, CEO of DainTree
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