Laura Zura - Puntaroni Politecnico di Milano - Architecture
leader Carlino Michele Giuliano Adedokun Adewale Philip Bertola Miriam Fagetti Bianca Palumbo Mattia Perfetto Gabriele Picco Gianluca Rossazza Lucia Tulumen Zeynep Valentina Zuccoli Maria Vittoria Zura - Puntaroni Laura
BRIGHTNESS - group 11
“highly innovative, committed team, collaborating to make a difference in the world�
Who is Silver Spring Networks US based company founded in 2002 – a decade of innovation and global success
Who is Silver Spring Networks?
Company’s Journey
16
Product and services Delivered Endpoints
Platform for the next generation smart grid networks, smart cities and connected infrastructure Proven multi-application network for smart grid and • US based company founded in 2002 – a decade innova>on smart city applications, from infrastructure to endof customer and global success devices • Pla@orm for the next genera>on smart grid networks, smart Various smart grid One of market leader with over 20M ci>es and connected infrastructure homes and businesses networked • Proven mul>-‐applica>on network for smart grid and smart city Broad ecosystem 100+ partners applica>ons, from with infrastructure to end customer devices 137 granted and pending patents in the USover 20M homes • Various smart grid One of market leader with Trusted by big investors, receiving huge amount of monand businesses networked ey• toBroad work eon new and risky projects to expand their market cosystem with 100+ partners • 137 granted and pending patents in the US • Trusted by big investors, receiving huge amount of money to work on new and risky projects to expand their market
20
12
8
4
0 2007
2008
2009
2010
2007 – First customer
2012
2013
2009 – Reach Australia
2010 – Expansion
2013 – Reach UK and Europe
Con>nuous sales, project development, awards and financial growth Proven Success at leading u:li:es
2014
hNp://aie.org.au/AIE/Documents/MEL110524_Presenta>on.pdf
2008 – Issuance of patents 2006 – Pilot and prototype and standards 2010 – Reach Brazil
2002 -‐ Founded
2011
Why a smart grid? 0
12
Smart grid is a cutting edge technology to optimize the electrical energy management, mostly electrical, management i.e. distribution and consumption.
CRITICAL POWER SOURCES
24
DAILY POWER CONSUMPTION
POWER PRODUCTION
POWER CONSUMPTION
HOURS
0
12
24
HOURS
The black curve exhibits an oscillating trend, due to the difficulty to control the power generated by wind. To avoid such criticalities the smart grid needs to store and then ridistribute the energy throughout the day in order to uniform the power production and consumption.
0
12
24
The blue curve respresents the observed daily power consumption while the red one represents the power consumtion the smart grid aims to achieve.
PHOTOVOLTAIC
ACTUAL TREND
EOLIC
TARGET TREND
Development of products and services Development of products andsegments services CUSTOMER APPLICATIONS
SMART METERS
segments GRID APPLICATIONS
How we can reach the future ? P
BIG COMPANY
R E S
utilities industries (gas, power, electricity)
collaboration with more institutions (academic, government, international organization, renewable energy developer) powerful institutions (NASA, UN, EU, etc) big infrastructure (airport, railway, etc)
E
smart meter
N
grid application
T
SERVICES
advertising broaden devices compatibility
customer applications
STRATEGIES
engage customer through web based support mobile feature and applications, easy email and reporting, home and business area network (HAN) devices, customer services fund raising (investment etc)
F U T U
NEW MARKET
citizens governments and municipalities
R E
Development of products and services segments
UK
Singapore Countries where Silver Spring Networks has entered the market
Brazil
New Zealand Annual smart grid market growth in 2007 and 2014 $ Billions The growth of the smart grid will considerably vary across geographies: Smaller potential growth in those countries where energy infrastructures are already developed. Faster growth where infrastructures have to be built.
Demand Analysis
Hypotetical demand calculation for the citizen market: 317.3 M people in USA, 2,58 people per family, 123 M families Current market share 33% The Customers who have access to the technology are those who live in big cities (80.7%) and who have an income bigger than the average (27.6%) Silver Spring concentrates its efforts in big eastern USA cities (about 70%) The penetrated market is 50%
Hypotetical target market share:
50%
The technology has been already developed, but it is not mature yet.
Customers are visionaries - early adopters.
These customers need to adapt to the new technology, organizing themselves to develop the required knowledge and capabilities.
Performance
Silver Spring Net
Moore ’ s segmentation
Time
MATURITY
INCUBATION
DIFFUSION
Sales
Time
Direction of growth and profitability We made an estimation of the future annual revenues in the three main application areas. In particular, the charts show the market growth over the next 5 years, considering the worst and the best case scenarios. Worst Case Scenario The grid application markets’ importance decreases when we move from the worst toward the best case scenario.
The customer application and the smart meter markets’ importance decreases when we move from the best toward the worst case scenario.
Best Case Scenario
The growth and the value of the market are mainly influenced by the level of competition, regulations and policy but most of all by the technology itself. The development of the smart grid will create opportunities for traditional energy infrastructure vendors while opening the market to new players.
Type of diffusion
INNOVATIVE
IMITATIVE
time
early years
Completely new technology to replace the old electrical grid. The product is sold to a specific segment of the market
now
Smart grid is already used and proven and more cities are going to implement the technology based on the result of performance of the early adopters. Silver Spring is trying to raise awareness and improve the network. Silver Spring keeps developing the new technology
In order to gain a market share of 50%, starting from an actual average market share of 30%, we calculated approximately the time that it will take, considering three different scenarios:
Abernathy-Utterback’s analysis performance
Smart Grid industry is currently increasing in terms of sales, performance, number of firms, and rate of innovation (both in product and process).
t sales
Supporting fact Survey 2011: Smart grid revolution becomes ‘disruptive’ for utilities worldwide 8% utilities have adopted smart grid technology – the rest are still developing and growing Utility industry is willing to change, although it requires overwhelming magnitude of change (business model, existing asset and technology investment). It also needs to be sure about the reliability and profitability of the technology.
t number of firms
t rate of innovation product
process
t
The innovation pipeline
BASIC RESEARCH
APPLIED RESEARCH
PRODUCT DEVELOPMENT
DIFFUSION
product discovery
innovation technology
Smart Grid technology already exists, it is already used in particular places such as Brazil, UK, Singapore. Silver Spring Net is interested in introducing and developing the application into wider markets.
The innovation funnel
Technology Silver link Data platform Network control software IPv6 network Discovery Smart grid as more efficient and connected way to manage energy
DIFFUSION
PRODUCT DEVELOPMENT
APPLIED RESEARCH
BASIC RESEARCH
Study of network protocols Prototype Energy distribution and consumption statistics Internet of things City organization Current market In advanced meters, sensors Utility industry Distribution automation New market Existing network infrastructure Municipalties and governments Citiziens
Innovation : Services
Product Hardware (Routers and repeaters, metering, DA and in-home devices) Software (UtilityIQ applications, CustomerIQ engagement Silverlink sensor network Gridscape management software)
Type of innovation 1. Network
2. Software
3. Services
The type of innovation is evolutionary because the company uses the existing network technology.
The type of innovation is revolutionary because the company completely developed a new software to manage connection between the elements and information distribution. The type of innovation is revolutionary because the company provides new services of smart grid technology.
Current and future paradigm
Establishment of a dominant design
FACTORS THAT INFLUENCE
TO CREATE
THE SETTLING OF
A DOMINANT DESIGN
A DOMINANT DESIGN
SILVER SPRING SHOULD
The availability of complementary assets: sensors, renewable energy sources (for instance hydroelectric) and means of storing-releasing energy. The intelligence of the grid that guarantees a smart and prompt response.
Evaluate the possibility of starting partnership relationships with eco-friendly power providers.
Dominant design industries
Control, Less Energy,
Sensors Pollution, Water Meters, Noise
Public Lighting Cabinets
Intelligent TraďŹƒc Control
EV Charging Infrastructure
9
City Communication
Networks
More Security, Less
Traffic,
Dominant design houses
Customer
Energy Consumption
Type of customer Standard householder without Smart grid
Single householder with Smart grid
Family house with Smart grid 0
2:00 4:00 6:00
8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 24:00
Traditional dominant desing without Smart grid
Hour
New dominant design with Smart grid
Application of standard Silver Spring is the pioneer in standards-based networking to the utility industry (since 2002), starting with IPv6-based network for machine-to-machine (M2M) communications. Build an open platform with standard interfaces to support a wide variety of hardware and software, so customers could have a choice of solutions and benefit from increased innovation. Together with other companies and standardization body (IEEE) create protocol and agreements for smart grid network as follow:
Industry
Advanced Metering
Network
Distrubution Automation
Sofware Energy Efficiency
Company
Service
Demand Response
Electric Vehicle
Industry The company makes products that enable the smart grid technology application which is essentially an optimized use and distribution of energy that tackles emissions and climate change. Silverspring networks develops equipment that creates mesh networks and transmits energy consumption data between meters, consumers and utilities in real time. The software indicates how much money is spent on electricity and indicates how much can be saved if one switches to energy-efficient models.
How: Silver Spring smart energy platform consists of providing the networks, software and services using : Metering devices: gas, water, electricity Distribution Automation devices In-home devices Network technology: routers and signal repeaters Moreover, it plays on an educational policy which is consumer’s Awareness.
In summary, the company enables utilities and cities to: Improve energy efficiencies Enhance services Reduce costs
SUSTAINABILITY
Industry profile and strategies
The company objective is to provide the leading networking platform for critical infrastructure, so the platform ultimately becomes the industry standard. To achieve this objective Silver Spring Networks intends to : Exceed our Customers’ Expectations; Enlarge our Network Footprint; Expand Internationally; Broaden our Solutions and Services; Extend our Technology Leadership.
Business model canvas ( as - is ) Producer of Advance Metering Infrastructure and Distribution Automation devices House appliances producer (LG, Whirlpool, etc) Contractor for cities infra-
Smart Grid technology research and development Installation and execution of Smart Grid technology in utilities industry and society (cities, neighbourhood)
structure, architectures and designers Software developer for smart grid application Investors (Foundation Capital, GSV Capital, Artis Ventures, etc)
Silver Spring Network Environment: SilverLink/Data Platform, Network Control Software, IPv6 Network Smart Grid Networks Smart City Infrastructure Networks
Smart City Infrastructure Improvement in public safety (10% crime reduction), energy usage and cost (by 50%)
Demand Response • Save money of the customers • Largest networked Demand Response programs Advanced Metering • providing extensive and up-to-date information about efficiency programs Distribution Automation • Improving the efficiency and reliability of the smart grid distribution network
Multi-channel, integrated engagement platform (Learning platform) Open eco-system for innovation Near-real time information on energy usage and management
Global Online community across multiple social media (youtube, twitter, facebook) Telephone&onsite support Direct response to priority 1 issues CustomerIQ App Suite, Powered by the SilverLink Sensor Network Energy Challenge Game
R&D, technology innovation Execution (installation and activation)
Sales of devices to customer Smart cities development project
Overhead cost (salary, administrative, maintenance, etc)
Income from investment
Marketing and advertisement
Utilities industries (Gas, Power, Electricity) Society/Citizens (House appliances)
Business model canvas ( to - be ) Producer of Advance Metering Infrastructure and Distribution Automation devices House appliances producer (LG, Whirlpool, etc) Contractor for cities infrastructure, architectures and designers Software developer for
Smart Grid technology research and development Installation and execution of Smart Grid technology in utilities industry and society (cities, neighbourhood) Network and market expansion Advertising
smart grid application Investors (Foundation Capital, GSV Capital, Artis Ventures, etc) Government International institution (EU, UN, etc) Renewable energy developer
Silver Spring Network Environment: SilverLink/Data Platform, Network Control Software, IPv6 Network Smart Grid Networks Smart City Infrastructure Networks Smart phone developer
Smart City Infrastructure
wImprovement in public safety (10% crime reduction), energy usage and cost (by 50%) Demand Response • Save money of the customers • Largest networked Demand Response programs Advanced Metering • providing extensive and up-to-date information about efficiency programs Distribution Automation • Improving the efficiency and reliability of the smart grid distribution network Environmental Friendly The Smart Grid is necessary for the efficient integration of renewable energy, leading to fewer greenhouse gas emissions and reduced use of peak energy generators.
Multi-channel, integrated engagement platform (Learning platform) Open eco-system for innovation Near-real time information on energy usage and management Sponsorship through advertising of the utilities that use the technology
Global Online community across multiple social media (youtube, twitter, facebook) Telephone&onsite support Direct response to priority 1 issues CustomerIQ App Suite, Powered by the SilverLink Sensor Network Energy Challenge Game Collaboration with academic institution to increase the visibility of the company
R&D, technology innovation
Sales of devices to customer
Execution (installation and activation) Overhead cost (salary, administrative, maintenance, etc)
Smart cities development project Income from investment Licensing
Marketing and advertisement
Utilities industries (Gas, Power, Electricity) Society/Citizens (House appliances)
Patent portfolio benchmarking
Total patence of S.G. companies
120.000
number of patents
100.000 In addition we have analyzed our company compared to the other top10
80.000
companies in the same field market .
60.000
Since Silver Spring Net has been re-
46.528
cently founded, its number of patents is smaller than the one of the others. Total patence of S.G. companies
40.000 companies 20.000
18.064 10.436 1.251 104
0
15
19
Si lve r
Sp rin gN et
wo rk
companies
Total patence of S.G. companies
Patent portfolio benchmarking number of patents
90
We have drawn the number of patents released by Silver Spring in function of the year. Since the company has been found in 2002, we suppose it is an entrant; in particular the number of patents Silver Spring Npresents etwork a maximum in 2008: we Itron infer the company in this period Opwer has increased the technology necessary to saturate the demand. After this year it has stabilized to a lower level of production.
80 70 60 50 40 30 20 10 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Silver Spring Silver Spring Network Network
Itron
Opower Opwer
The technological / marketing strategy Patent Protect the idea and the product
Aim To enlarger the market
Strategy Patent Pooling A reciprocal trading of patents that protects the ideas and improves the product, which consequently enlarges the market.
Roadmap Silver Spring invested in developing the smart grid technology and proposed a prototype in the first years of life. Later on the company concentrated on providing a product that could enter the market, accompanying this action on one side with further researches and on the other side with efforts directed to the market. In the future the company should continue to invest in R&D, while it should also focus on expanding the network and the market.
Future
SWOT anal ysis
The sources of finance for investments
OBSERVATIONS:
2013/2014 : +30 (M USD) Fluctuation of Liabilities in 3 years
LIABILITIES
LOANS
INVESTEMENTS
NET CASH FLOW
The sources of finance for investments
2013
Equity and Issue of stocks Silver Spring Networks was founded in July 2002 and went public under the listing symbol SSNI on the New York Stock Exchange on March 13, 2013, raising about $81 million.
It is common for ex-startups that now are companies with a little amount of shares.
Year
Yearly investment analysis
2007 2008 2009 2010 2011 2012 2013
Investment
(M USD) Investment 10.5 92.5 115 0 24 30 12
140 120
140
Amount of Investment (M USD)
2007 - received 1st investment 5 years after foundation. In our opinion this is due 120 to the proven quality of the technology of115 the 1st project (2006). 100 92.5
2009 - Silver 80 Spring smart grid technology becomes well-known thus deserving big amount 60 of investment. 2013 - Investors continue trusting Silver 40 Spring because of the increasing sales in the previous20years. 10.5 0 2006
2007
2008
2009
Amount of Investment (M USD)
Year
Year
2007 2008 2009 2010 2011 2012 2013
Investment 10.5 92.5 115 0 24 30 12
115
100 92.5 80 60 40 24
20
30 12
10.5 0 2006
2007
2008
2009
0 2010
2011
2012
2013
2014
Year source : https://www.angel.co
2007 received 1st investment 24 after 5 years founded, due 0 to proven 2010 technology2011 Year 1st after project (sales) in 2006
2009 - this year the Smart Grid technology becoming welknown by 30 the society and Silver Spring gain trust from many investors as seen by 12 the big amount of investment 2012
2013
2014
2013 constantly gain trust from investor through years of operation due to the increasing of sales, performance and emerging market
Institutions and funds
The institutional shareholders are Venture Capital firms firms Themajor major institutional shareholders are Venture Capital
Institutions and funds Founded : 1998 Invested : 150+ ventures (18 succed / 150 ) Date of investment: 2009
Founded : 2009 Invested : 225 companies (Uber, Nest etc. ) Date of investment: 2009
Founded : 2011 Invested : Numerous companies among which Facebook Date of investment: Amount undisclosed
These fundations are big investors in the market, which means that Silver Spring Networks is reliable and perceived to be succesfull in the future.
Technological risks The company business is subject to many risks and uncertainties, which may affect its future performance.
1.
The quarterly results are inherently unpredictable and subject to substantial fluctuations
Due to the aforementioned risks the company cannot be financiated by banks and, on the contrary, needs
2.
The revenue is not predictable and recognition of a significant portion of it will be deferred into future periods.
to receive fundings from venture capital institutions as shown by the previous plots. Furthermore, having the smart grid market many
3.
The Company is dependent on the utility industry, which has experienced volatility in capital spending.
competitors, Silver Spring Network must continue in devoloping the required technology. As a consequence financial needs are huge
4.
The company’s marketing efforts depend significantly on our ability to receive positive references from our existing customers.
and extend in time although not precisely quantifiable.
Innovation Eco system
Investors (FC, GSV, GV) Insiders (owner of the company)
Electricity Network and utilities Public facilities Internet Server Data mining and storage
Utilities Industries (gas, power and electricity): PG&E, OGE&E, FPL Street light, Citizen and Society (houses, families)
Standard and patents (IEEE, ISO) Academic and research (Universities) Non-Governmental Others (AIA)
Competitors (GE, top 10 patents) Social Media Network (FB, Youtube) Energy Utilities Producers of Smart Grid element (ABB, Cisco
Internet of Things Smart Grid Network Data and Information flow and management Existing electrical network Smartphone applications (android/iphone)
Stregths and weaknesses Actors
Strength
Weakness
Government
Policy maker, control on market (economic and society), law and patents
Different direc8on of law and policy can be dangerous to the development of our company
Organiza6on -‐ Academic & Research Ins8tu8on (DEIB, Universi8es)
• •
Research and development of technology (reduce in cost, bring honor) Employment (for students doing thesis and/or internship)
•
Compa8bility with academic path (unfeasible for university to cope with technology)
-‐ IEEE
•
Partner of patents and standards
•
Interven8ons from other smart grid technology developer (compe8tors)
• •
Quick and pervasive adver8sing and informa8on control Strong customer engagement and rela8on
•
Harmful of company image due to misuse of data and informa8on
Supplier of smart grid element (raw material) with reliable technology
•
Companies -‐ Social media
-‐ Producers of Smart Grid Element
•
•
Very diversified in products, might have no capacity to fulfil our market Unability to cope with technology requirement
Inven6on and Technologies -‐ Smart Grid Network
• •
Fast development of technology Problem solving
• Difficulty of technology development
• •
Main customer as source of income Decision on the key development
• Huge reforma8on of business model and technology • High switching cost
•
Earn a lot of money to invest
•
Demands -‐ U8li8es industries Infrastructure Funding (Investors: FC, GSV)
•
Investor no more interested to invest due to uncertainty and risk of technology Acquire most of company shares lead to the reduc8on in insider shares
Bibliography http://google.brand.edgar-online.com http://finance.yahoo.com http://investors.morningstar.com/ownership https://www.crunchbase.com/organization/silver-spring-networks http://ir.silverspringnet.com https://www.angel.co http://worldwide.espacenet.com