Telkonet Inc (TKOI)

[littlbyrdy]

Read this folks re. Telkonet: "Upstart Innovators Are Positioned to Disrupt Incumbents in HVAC Sensing, Controls and Services Combinations" From Lux Research Analyst blog Oct 24, 2015.

Pay particular attention to the last paragraph, particularly the second sentence: "These companies should look to partner or acquire companies of interest in the near term". Link at bottom.

Buildings represent the largest energy end use in the world, consuming one third of all final energy, and half of global electricity. In commercial buildings, almost 40% of this energy is consumed by equipment that conditions indoor environments – heating, cooling, and ventilating them. To improve the efficiency and quality of space conditioning, a number of new entrants have developed advanced HVAC technologies. While there are promising innovations in heat and enthalpy recovery, there is a plethora of sensors and controls companies poised to uproot the large incumbents. The Lux Innovation Grid for these companies illustrates the quality and quantity of emerging solutions providers, and the broader learning that comes from it.

While the “Dominant” quadrant is crowded, several of the companies have one trait in common – they are all focused squarely on a narrow vertical, namely hotels and data centers. Telkonet, for example, is focused on the hotel and hospitality segment. Its thermostats, while similar in capabilities to many of the competitors, are programmed to properly manage temperature drift (from a pre-defined set point); this is how it minimizes cooling unoccupied guest rooms, despite constantly-fluctuating occupancy. Similarly, Vigilent is exclusively focused on the data center segment. The company uses a network of temperature sensors, coupled with HVAC controllers, to minimize hot spots among data center server racks. The goal is not only energy savings, but also minimizing equipment failures in mission-critical applications due to inadequate cooling. It is not just the building application segment that provides a success indicator. The most pervasive type of companies across the “Dominant” quadrant are those with comprehensive building sensing and control product suites as opposed to isolated technologies. Specifically, Daintree Networks, Cylon Controls, Enlighted, Distech Controls, and Entic all touch multiple building systems, with the core primary systems being HVAC, lighting, and security. Building owners are showing insatiable interest in these platforms, and both Daintree and Enlighted have noted growth of over 300% over the past 12 months. The companies that can supply a comprehensive solution mean owners can centrally manage major functions, such as lighting and temperature control – a strong benefit. Business models also come into play of course with several of the companies mentioned above, such as Entic, offering a packaged service model instead of selling hardware alone. This is subtly different from Enlighted, which offers turn-key, third-party-financed lighting retrofits. In the case of Entic, the company is amortizing the cost of its hardware and charging building owners a monthly fee – which includes installation.

Just as in the BEMS software space, startups are innovating faster with HVAC technologies than their larger incumbent peers. These companies should look to partner or acquire companies of interest in the near term. This has already begun, as the Zehnder Group established a strategic partnership with dPoint Technologies, and Seeley International acquired Coolerado in mid-2015. Similarly for sensing and controls startups, Acuity Brands acquired Distech Controls early in 2015, and Ingersoll Rand’s building equipment company Trane has engaged Entic to supply sensors and software for its “comfort as a service” offering. Given the high quality startups across the HVAC technology spectrum, bigger players must act fast – or risk getting left behind.

Link: http://blog.luxresearchinc.com/blog/2015/10/upstart-innovators-are-positioned-to-disrupt-incumbents-in-hvac-sensing-controls-and-services-combinations/