Control & Automation

Insteon, SmartLabs Acquired; New CEO Wants to Make Powerline Great Again for Home Automation

Richmond Capital acquires SmartLabs, owner of Insteon mesh-networking home-automation technology, and Smarthome, leading home-technology retailer; plans serious investment in IoT hardware and software.

Insteon, SmartLabs Acquired; New CEO Wants to Make Powerline Great Again for Home Automation
Under new ownership, SmartLabs will invest in Insteon hardware and home automation software.

Julie Jacobson · June 19, 2017

The private investment firm Richmond Capital Partners has acquired SmartLabs, the parent company of home-technology distributor Smarthome and its product-development arm Insteon, an exceptional but rather marginalized IoT and home-automation technology.

“This is a blockbuster of an opportunity,” says new CEO Rob Lilleness in an interview with CE Pro. Previously he was CEO of Medio Systems and COO of Universal Electronics Inc.

While we as an industry tend to forget Insteon these days, it’s actually a pretty great protocol that was developed in 2004 by Joe Dada and his team at SmartHome, a leading home-technology distributor.

As we wrote back then:

Insteon (pronounced “instee-on”) combines the convenience of RF with the efficiency of powerline-carrier (PLC) communications to create what appears to be the first hybrid wireless/powerline technology for control applications.

Smarthome envisions a world in which wireless security sensors and PLC-enabled light switches communicate with each other over a single network, through a single protocol, with a unified programming interface. …

Both PLC and RF have their own advantages when it comes to in-home communications, whether for high-speed networking, or small-bit control applications. PLC is generally less expensive, while RF is more convenient. Either media might enable faster or more reliable communications, depending on the installation. Thus, a hybrid approach presents the best of both worlds.

Certainly, a hybrid environment could be created by bridging two existing protocols—say X10 for powerline and Zensys for RF. In fact, this is being done, but the approach is less than optimal. The translation from one protocol to another takes time, and there’s no way for X10 devices and Zensys devices to “feed” off of each other since they occupy two different networks.

On the other hand, hybrid Insteon products can simultaneously signal both powerline and RF devices. Whichever signal happens to work best for any particular device—that’s the one that automatically “wins.” Furthermore, Insteon employs a mesh networking architecture (as does Zensys for RF) in which all nodes are transceivers and repeaters. Thus, any powerline or RF device added to the network enhances the entire network.

It was the first, and still the only, worthwhile protocol to bridge two transports: RF wireless and powerline carrier (PLC, the home’s existing AC wiring). In the Insteon ecosystem, products like sensors that should be powered by battery would communicate over RF, while anything plugged into an outlet would take advantage of the usually-more-reliable PLC.

Lilleness says SmartLabs has some 30 patents around “dual-mesh” technology. The powerline component, he adds, is becoming increasingly important as wireless signals bombard the home.

“Our implementations are in the thousands of nodes in certain cases, with no degradation of service.”
— New SmartLabs CEO
Rob Lilleness on Insteon robustness

If, as he cites, we’ll have an average of 300 smart nodes in the home by 2020, “you’d need a lot of improvement to wireless protocols to handle that.”

Insteon’s PLC technology, on the other hand, has the “ability to scale,” according to the CEO. “Our implementations are in the thousands of nodes in certain cases, with no degradation of service.”

Pros will tell you that Insteon is a reliable and robust protocol, but it never quite made it as a “standard.”  First Alert announced it would use the technology in a line of smoke detectors back in the day, and the protocol had a few other high-profile takers, but the products didn’t materialize and ultimately SmartLabs really was the only one to make Insteon products.

The effort might have been harmed by Insteon’s association with X10 – at the time a longstanding home-automation protocol that worked over the home’s existing powerlines. While X10 was the only thing going for a time, the technology was often derided as slow and unreliable, especially as Z-Wave wireless mesh-networking technology (then “Zensys”) began to overtake it.

Thereafter, all powerline carrier technologies including Insteon and Universal Powerline Bus (UPB) became suspect, despite their major improvements over X10.

Investments to Make Insteon Open, Ubiquitous

Perhaps we’ll see a renewed interest in powerline communications, now that RF is out of control, what with interference from microwave ovens, mirrors, HVAC ducting, brick fireplaces, as well as wireless activity in your homes, in your neighbors’ homes, in your cars and on your person.

With wireless, a “network inherently gets stressed as new devices utilize the bandwidth,” Lilleness says.

Lilleness and team plan to reinvigorate Insteon with a “significant investment” into the company, starting with a $7.3 million infusion.


RELATEDInsteon Bows First Hybrid RF/PLC Technology (2004)


The opportunity is vast, even if we just consider the powerline.

U.S. housing starts are now at about 1.2 million units per year. With an average of 70 electrical nodes (electrical outlets, switches, lights), the opportunity would be about 84 million nodes, according to Lilleness.

“Today, 99 percent of those nodes are dumb,” he says. “My belief is that in five to seven years, the vast majority will be smart.”

For the incredulous set, he reminds us that we scoffed at Bill Gates when he said there would be a PC on every desk.

“It’s the same thing with IoT,” Lilleness suggests.

The first order of business for SmartLabs will be to invest in software. SmartLabs has decent home-automation software, but the new leadership will invest more heavily to create not only a smart-home system that is affordable and easy to use, but also an ecosystem that is easy to join.

SmartLabs will “build out our APIs so anyone can utilize Insteon,” Lilleness says. “We have to ensure compatibility.”

So far in the modern era, Insteon has been largely ignored by makers of home automation hubs, including DIY and pro. The short-lived Revolv hub had it, and the Staples Connect Hub was supposed to have it, but apparently never got it.

Even so, SmartLabs itself has built out a nice ecosystem of home-automation hardware and software, (including cloud-based services) compatible with Amazon Alexa, Apple HomeKit, Nest and most of the other popular offerings today.

Lilleness feels confident the company can deliver world-class hardware and software around Insteon, but at the end of the day what matters most is that Insteon simply works.

“The customer expectation is when you flip a switch … it turns on,” he says, channeling Thomas Edison.

Future of Smarthome

Insteon was a product of Smarthome, founded in 1992 as a supplier of home-automation devices, and today a leading online retailer in the category. Lilleness says Smarthome will continue to run "distinctly" from Insteon, while recognizing synergies with the technology group.

PRESS RELEASE

Richmond Capital Partners Acquires Smartlabs and Fortifies Company with $7.3 Million in Funding to Accelerate the Company’s Push in the IoT Industry

Technology Industry Veteran Rob Lilleness to Lead the Company

IRVINE, CALIF. (PRWEB) JUNE 13, 2017

Richmond Capital Partners, a private investment firm based in Seattle, today announced the acquisition of Smartlabs Inc., parent company of Insteon®, an Internet of Things (IoT) technology company, and Smarthome®, an eCommerce superstore for home automation. As part of the acquisition, Rob Lilleness will assume the role of chairman and CEO.

Lilleness has built multiple successful high-tech businesses in digital media, mobile, software and consumer products. Most recently he served as president and Chief Executive Officer for Medio Systems, an ACCEL-backed company, which was acquired by HERE Technologies (a company currently owned by BMW, Daimler, Audi, Intel, and Tencent). Prior to Medio, Lilleness was president and chief operational officer of Universal Electronics. During his tenure at Universal, earnings more than tripled and the market capitalization grew from approximately $100 million to $500 million.

“I’ve been following Smartlabs almost from when they started. Their Insteon line remains arguably the strongest in the IoT space for controlling and communicating with electrical components in one’s home—whether via Amazon Alexa, smartphones, pads, or traditional wall plates and remotes,” said Rob Enderle, principal analyst, Enderle Group. “Additionally, Rob Lilleness, with his background helping to build Microsoft’s networking business, is one of the few people that has both the resources and experience to take Smartlabs where I’ve always believed they could go.”

One of the Largest Opportunities in IoT 
According to a report published by Business Intelligence, by 2020 the U.S. residential market will have 193 million devices in connected homes with almost 50 percent of those devices in SmartLabs’ core electrical, lighting and sensor market. The global smart electrical control market is expected to grow to $10.8 billion over the next five years.

“There are two incredibly interesting IoT spaces in technology today—the car and the home,” said Lilleness. “Over the next five to 10 years, it is inevitable that a large portion of electrical nodes in the home will be ‘smart’ and addressable via the internet. With Insteon’s patented dual-mesh technology that communicates both wirelessly and via the home’s own electrical wiring, SmartLabs has the most reliable and scalable technology for electrical control and communication, which is critical to meet consumers’ expectations.”

Smartlabs headquarters will remain in Irvine, Calif., and the company plans to open a software development office in Seattle.

About Insteon 
Insteon creates the world’s leading technology for electrical, lighting, and sensor communication and control. Its patented dual mesh technology delivers unmatched reliability that is used in more than 200 Insteon-powered products and enables consumers to control their homes from virtually any device or interface.

About Smarthome 
Smarthome is one of the world’s largest home automation retailers and an easy-to-use source for thousands of affordable lighting, security, and home entertainment products that the average “do-it-yourselfer” can safely install. Its team of product specialists strives to deliver the newest cutting-edge products at the best possible prices. Smarthome distributes products with award-winning INSTEON technology.

About Smartlabs 
Founded in 1992, Smartlabs, Inc., the parent company of Insteon and Smarthome, is the world's leading authority on electronic home improvement and automation.



  About the Author

Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at [email protected]

Follow Julie on social media:
Twitter · LinkedIn · Google+

Julie also participates in these groups:
LinkedIn · Google+

View Julie Jacobson's complete profile.



  Article Topics


Control & Automation · Automation · Lighting · News · Products · Insteon · M&A · Mergers and Acquisitions · SmartLabs · All Topics
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Comments

Posted by mhealthtalk on June 27, 2017

Yosappy, I’m glad you shared your fondness for Insteon and your frustration for the difficulties of building integrated home control systems. It illustrates the sad state of this industry, which remains stuck in two niche markets and unable to cross-the-chasm to mainstream adoption. One niche is high-end new homes with professional system integration installers, but the problem with then is making any kind of meaningful change or enhancement, which usually requires a new truck roll to reprogram the supposedly-smart house. The other niche is the DIY techie that likes to tinker. They can get a few devices up and running just fine, but creating that Smart Home that they envisioned is much more difficult.

Marketers keep over-hyping this industry, and manufacturers and retailers continue to lack knowledge of what is needed for mainstream adoption. This vision has eluded marketers for well over 50 years, and I invite you to watch 3 short videos comparing vision videos by LG & Samsung from CES 2016 with the RCA-Whirlpool demo from the 1957 World’s Fair. (http://www.mhealthtalk.com/elusive-smart-home/)

Posted by yosappy on June 27, 2017

FINALLY!  I have been waiting, for years now, for someone REALLY BIG to REALIZE how GREAT INSTEON Technology has become.  I have tried, with 4 different Integration Companies, to get my INSTEON Devices to talk with my Home Control Systems.  At first, it was Elan.  TOTAL FAILURE.  Their integration was horrible & their Software, even worse.  Of course, they were totally incompatible with INSTEON.  2nd, there was Crestron.  Same problems as Elan, except Software was even worse.  Then I tried Control4.  They were easier to use; but, had all the other Software problems as other 2, + they were also totally incompatible with INSTEON.  Now, I have SAVANT.  My Integrator wrote his own Interface to INSTEON; but, sadly, they only did 2 Devices, so I was still left out in the cold.  SAVANT, like the other 3, also has its own PROPRIETARY Lighting Devices, which are totally incompatible with INSTEON.  So, after 20 YEARS OF FRUSTRATION, I finally Settled with SAVANT Controlling everything, except my INSTEON Devices.  I use Indigo Software & Apple’s HomeKit for Control of all my INSTEON Devices, for now.  There is nothing else out there that is Mac Compatible & contains as much power & flexibility to control INSTEON Devices, as Indigo now does.  In fact, it now controls 2 other Interfaces, Z-Wave & X-10, as well as INSTEON. Hopefully, SOMEONE WILL BUY INDIGO & ADD IT TO THEIR SMARTHOME STRATEGY WITH HomeKit to make all INSTEON Devices COMPATIBLE WITH ALL CONTROL SYSTEMS; or, to, at least, PROVIDE A CLEAN & COMPATIBLE INSTEON INTERFACE TO ALL AUTOMATION CONTROLLERS.  I can DREAM…..........

Posted by mhealthtalk on June 21, 2017

As an early user of X10, CP290, HAI, and IBM Home Director, moving to Insteon was a natural, but powerline still posed problems that Androit1 mentioned. One possible direction might be to blend in HomePlug for fast bandwidth, possibly giving it an advantage over Z-wave & ZigBee. BTW, Z-wave is not an industry standard. ZigBee is. But what matters is being the de-facto standard and having market scale.

Posted by Adroit1 on June 21, 2017

Another pile of money about to be flushed down the toilet. I was once told by a professor of marketing at a large university about bringing products to market. “your product has to be 50% better, or 50% cheaper than what is existing to have your product be successful”. This is neither. With Z-wave receptacles and switches being introduced by the thousands, and programs being designed and implemented to drive them, you already have the hybrid network Richmond Capital Partners is trying to establish with PLC. On top of not being either better or cheaper, and with its history to overcome, I just don’t see how it is going to be viable. Using the existing wiring is not going to be any different than Z-wave, and Insteon products are going to be proprietary, so there is no ability to expand the system except with Insteon products, making each home prisoner to one company and its pricing. Then there is still PCS out there which is a direct competitor, making profits even harder to come by.

Posted by tmaddison on June 20, 2017

“The first order of business for SmartLabs will be to invest in software.”

Hallelujah!

I’ve been a powerline interface user since the 80’s, starting with a little 8 device X10 controller cube that sat next to the couch, moving through the CP290, the CM11, and now the Insteon Hub.

Every time they update the hardware, the software takes a step backward.  The Insteon App is a miserable, lame bit of software that is barely usable.  Certainly not capable of anywhere near the features that prior versions of their own home control software had.

Yes, I know I can step up to software packages and controllers that allow for incredible sophistication, but I have barely five controlled devices in my house, and most of those are fairly simple - like front porch lamps.

Why is it so hard to understand that someone like me might want to be able to tell that lamp “turn on at 5pm if it’s dark, otherwise turn on at sunset minus 10 minutes”? 

I USED to be able to do that, but the Insteon app is barely capable of handling just turning it on at sunset - even that is flaky…  The lamp next to the couch mysteriously turns off at 9:40 at night, even though there’s nothing programmed to tell it that - and there do not appear to be ANY troubleshooting features to let me figure out why…

If Insteon wants to beta test something on a long-time user (and a CE professional, former technician and programmer, so I know a wee bit about these things…) sign me up!

Posted by paul greatreps.com on June 20, 2017

Your headline begs the question: When was PLC great before? X10? X10Pro? CEBus?

Posted by paul greatreps.com on June 20, 2017

Your headline begs the question: When was PLC great before? X10? X10Pro? CEBus?

Posted by tmaddison on June 20, 2017

“The first order of business for SmartLabs will be to invest in software.”

Hallelujah!

I’ve been a powerline interface user since the 80’s, starting with a little 8 device X10 controller cube that sat next to the couch, moving through the CP290, the CM11, and now the Insteon Hub.

Every time they update the hardware, the software takes a step backward.  The Insteon App is a miserable, lame bit of software that is barely usable.  Certainly not capable of anywhere near the features that prior versions of their own home control software had.

Yes, I know I can step up to software packages and controllers that allow for incredible sophistication, but I have barely five controlled devices in my house, and most of those are fairly simple - like front porch lamps.

Why is it so hard to understand that someone like me might want to be able to tell that lamp “turn on at 5pm if it’s dark, otherwise turn on at sunset minus 10 minutes”? 

I USED to be able to do that, but the Insteon app is barely capable of handling just turning it on at sunset - even that is flaky…  The lamp next to the couch mysteriously turns off at 9:40 at night, even though there’s nothing programmed to tell it that - and there do not appear to be ANY troubleshooting features to let me figure out why…

If Insteon wants to beta test something on a long-time user (and a CE professional, former technician and programmer, so I know a wee bit about these things…) sign me up!

Posted by Adroit1 on June 21, 2017

Another pile of money about to be flushed down the toilet. I was once told by a professor of marketing at a large university about bringing products to market. “your product has to be 50% better, or 50% cheaper than what is existing to have your product be successful”. This is neither. With Z-wave receptacles and switches being introduced by the thousands, and programs being designed and implemented to drive them, you already have the hybrid network Richmond Capital Partners is trying to establish with PLC. On top of not being either better or cheaper, and with its history to overcome, I just don’t see how it is going to be viable. Using the existing wiring is not going to be any different than Z-wave, and Insteon products are going to be proprietary, so there is no ability to expand the system except with Insteon products, making each home prisoner to one company and its pricing. Then there is still PCS out there which is a direct competitor, making profits even harder to come by.

Posted by mhealthtalk on June 21, 2017

As an early user of X10, CP290, HAI, and IBM Home Director, moving to Insteon was a natural, but powerline still posed problems that Androit1 mentioned. One possible direction might be to blend in HomePlug for fast bandwidth, possibly giving it an advantage over Z-wave & ZigBee. BTW, Z-wave is not an industry standard. ZigBee is. But what matters is being the de-facto standard and having market scale.

Posted by yosappy on June 27, 2017

FINALLY!  I have been waiting, for years now, for someone REALLY BIG to REALIZE how GREAT INSTEON Technology has become.  I have tried, with 4 different Integration Companies, to get my INSTEON Devices to talk with my Home Control Systems.  At first, it was Elan.  TOTAL FAILURE.  Their integration was horrible & their Software, even worse.  Of course, they were totally incompatible with INSTEON.  2nd, there was Crestron.  Same problems as Elan, except Software was even worse.  Then I tried Control4.  They were easier to use; but, had all the other Software problems as other 2, + they were also totally incompatible with INSTEON.  Now, I have SAVANT.  My Integrator wrote his own Interface to INSTEON; but, sadly, they only did 2 Devices, so I was still left out in the cold.  SAVANT, like the other 3, also has its own PROPRIETARY Lighting Devices, which are totally incompatible with INSTEON.  So, after 20 YEARS OF FRUSTRATION, I finally Settled with SAVANT Controlling everything, except my INSTEON Devices.  I use Indigo Software & Apple’s HomeKit for Control of all my INSTEON Devices, for now.  There is nothing else out there that is Mac Compatible & contains as much power & flexibility to control INSTEON Devices, as Indigo now does.  In fact, it now controls 2 other Interfaces, Z-Wave & X-10, as well as INSTEON. Hopefully, SOMEONE WILL BUY INDIGO & ADD IT TO THEIR SMARTHOME STRATEGY WITH HomeKit to make all INSTEON Devices COMPATIBLE WITH ALL CONTROL SYSTEMS; or, to, at least, PROVIDE A CLEAN & COMPATIBLE INSTEON INTERFACE TO ALL AUTOMATION CONTROLLERS.  I can DREAM…..........

Posted by mhealthtalk on June 27, 2017

Yosappy, I’m glad you shared your fondness for Insteon and your frustration for the difficulties of building integrated home control systems. It illustrates the sad state of this industry, which remains stuck in two niche markets and unable to cross-the-chasm to mainstream adoption. One niche is high-end new homes with professional system integration installers, but the problem with then is making any kind of meaningful change or enhancement, which usually requires a new truck roll to reprogram the supposedly-smart house. The other niche is the DIY techie that likes to tinker. They can get a few devices up and running just fine, but creating that Smart Home that they envisioned is much more difficult.

Marketers keep over-hyping this industry, and manufacturers and retailers continue to lack knowledge of what is needed for mainstream adoption. This vision has eluded marketers for well over 50 years, and I invite you to watch 3 short videos comparing vision videos by LG & Samsung from CES 2016 with the RCA-Whirlpool demo from the 1957 World’s Fair. (http://www.mhealthtalk.com/elusive-smart-home/)