Solid State Lighting: the end of lighting as we know it? 1) The lighting industry is poised for significant changes with the rise of solid state lighting (SSL) such as LEDs. Traditional lighting manufacturers, distributors, contractors and reps are not prepared for this technological shift. 2) New players are emerging like electronics companies and controls companies that are better positioned to lead the industry transformation as lighting becomes more integrated with other building systems. 3) The future of lighting will be defined by direct current distribution, integrated systems for security, sound and other functions, and lighting solutions that can influence human and environmental factors like color, intensity and circadian rhythms.

1. Solid State Lighting:
the end of lighting as we know
it?
Ted Konnerth, PhD
Egret Consulting Group

2. Why Me?
• Lighting guy
• Talent guy
• Industry observer
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3. Observations
• Executive email
• Kodak
• Big Four‟s position on LED
– 40% by 2015
– LED „not ready for indoor, yet‟
– “EVENT”
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4. Evolution
• Traditional channels:
– New construction
– Esco
– Remodel
– Muni/Utility
– Retail
• Complexity
– Lighting is applied everywhere
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5. Channel evolution
• Narrowly evolved:
– Distributors: sell what their customers want
– Contractors: power distribution equipment and
installation services
– Ltg reps: new construction and deal brokers
– Ltg Mfrs: electro-mechanical devices
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6. Channel problems
• Distributors: not trained to promote new
technology solutions, to new customers
• Contractors: no electronic experience; tools,
meters, certifications, union, etc.
• Mfrs: HUGE legacy investments in
mechanical products, no electronics fab
experience; clean rooms, test equipment
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7. Lighting reps v. Mfrs
• Financial chasm across their mfrs
– Compensation programs aren‟t aligned
• Manufacturers abdicate local control over:
– Price
– Participation in projects
– Uniformity/quality of their message
– Brand
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8. Pyramid of Margins
Traditional channels
• Manufacturer GM= ~50%+
• Distributor GM= 8%-25% (project v stock)
• Contractor GM= 8-10%
• Rep GM= 10-15% (accretive)
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9. Who’s gonna sell this stuff?
• Emerging solutions:
– Leased lighting
– Franchised LED „distributors‟
– Licensed installers
– ESCO‟s
– End-user focused sales teams
– Electronics distributors
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10. Success stories
• MSI. Mine Safety Industries (who?)
• City of Houston
• City of Los Angeles
• Walmart
• The client who didn‟t know they couldn‟t
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11. Future players
• Specifiers: added strength with product
qualification and assessment abilities
• Electronics companies: global top 5 firms
• Controls companies: the future of lighting as
we WILL know it
• New channel players
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12. Future sideline players
• Ltg reps: marginalized to new construction
and dis-intermediated from price control
• Contractors: as went premise wiring, so will
go SSL and eventually „lighting‟
• Distributors: will follow their contractors
• Mfrs: Big 4 will be re-aligned. The 400+
LED entrants will be rationalized
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13. The future of lighting
• DC distribution
• Systems: security, sound, video, lighting,
access, HVAC, etc.
• Energy: off-grid lighting
• Bio-lighting: color and intensity control to
influence: animals, humans, plants
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14. Grandkids, aka ‘anachronisms’
• Troffer •Film
• Reflector •Video store
• Incandescent •Picture tube
• HID •Rolodex
• Overage •Index cards
• Ballast •Carousel projector
• Lamp •„Event‟
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15. epilogue
“if you don‟t like change, you‟re going to like
irrelevance even less”
General Eric Shinseki
Ted Konnerth, PhD
tk@egretconsulting.com
847-307-7125
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