Interview with a leader in Home Automation: Joe Dada, CEO Smartlabs Inc.

While at CES this year, the Geeks investigated several new home automation technologies and ‘smart home’ products at the various booths in the TechHome TechZone. One such booth, Smarthome, featured Insteon and hosted several Insteon partners showing their products. Insteon is a competitor to other next generation home automation networks (such as Zigbee). As a surprise, we were introduced to Joe Dada, CEO of SmartLabs, Inc., and he was gracious enough to allow us to conduct an in-depth interview!


Humble Beginnings to Home Automation Leader

Dada has created the most successful home automation superstore starting from 12 employees and a “shipping room”, which consisted of his living room coffee table, to over 100 employees and a 60,000 square foot facility. Co-founding Smarthome in 1992 as well as being the Chairman and CEO, Dada recently reorganized SmartLabs, Inc. into three companies: Smarthome Direct, which includes Smarthome.com, “the Amazon of electronic home improvement” (Newsweek, 2004); SmartLabs Design, creators of home control products; and SmartLabs Technology, the pioneering architects of Insteon.

Dada has been the driving force behind Smarthome’s outstanding growth over the last 14 years. As an expert in home automation, Dada has been invited to speak at numerous conferences, including the Consumer Electronic Show (CES), Wireless Sensing Solutions, Electric West, National Hardware Show, International Wireless Symposium, Connections, Electronic House Expo, Antenna Systems and Short-Range Wireless and The Networked Home. In 2005 he was nominated as an Ernst & Young Entrepreneur of the Year®.

Read on to learn more about SmartLabs, Inc., Insteon and Dada’s thoughts on the home automation market.


SmartLabs, Inc.

The first item Dada wanted to talk about was the formation of the new parent company called SmartLabs, Inc. which has three sub companies (“Smarthome Inc. New Parent Company SmartLabs Inc. Formed With Group of Three Companies”). The three companies include SmartLabs Technology, SmartLabs Design and Smarthome Direct. By creating these three companies under the SmartLabs, Inc. umbrella, each company can focus one of SmartLabs, Inc. core competencies.

SmartLabs Technology will continue to lead the way on Insteon technology. “INSTEON uses both the home’s electrical wiring and radio frequency (RF) communication to deliver a secure, reliable and fast connection for the remote control, integration and management of lighting, security systems, entertainment systems, appliances, climate control and more. INSTEON is licensed to OEM partners for integration into home automation products”

SmartLabs Design will focus on manufacturing and will “oversee the design, development, product sales and marketing of innovative new home control products” including the ICON line which are Insteon lighting products starting at $19.99.

Smarthome Direct will continue to use the brand recognition from the Smarthome website and catalog. Home Depot.com and the Long Beach, California Home Depot stores now carry Insteon technology as well with hopes to go nationwide in Home Depot stores later in the year.


The Goals of Insteon

After talking business, we quickly moved on to Insteon, SmartLabs, Inc.’s answer to the next generation home automation network that will replace the aging 70’s technology called X10 that has been under development for the past five years.

We wanted to know why Dada created a new home automation networking technology while several other next generation home automation technologies were already being created. He stated that he wanted to create a product that “just works�. Dada passionately explained that he told his engineers that Insteon must have six qualities: easy installation, perceived instant response, easy use, reliability, affordability and backwards compatibility with X10.

Knowing that the home automation market is still primarily a DIY (Do It Yourself) community and that consumers would opt to use technology that is easier to install (including working with electrical wiring in most pre-existing homes), network enrollment (setting up the network) needed to be simple. Dada wanted Insteon to be easily installed. Since all Insteon devices have an ID number loaded at factory, the Insteon devices join the network as soon as power is supplied to them.

After much research and testing, the Insteon team determined that .2 seconds was fast enough to be perceived as instant response. With that goal in mind, the Insteon engineering team developed the technology with .05 seconds response time which falls well within the needed parameter.

As far as ease of use, Dada wanted to make sure a four year old or a visiting guest could operate Insteon controlled elements in a house. The Insteon engineers created a simple “Plug-and-Tap” setup which allows one Insteon device to control another. You simply need to plug in the devices and press and hold a button for ten seconds to link two Insteon devices.

Home automation products are not known for their reliability (if you’ve ever owned and setup a house with X10 you’ll know that all too well), but one of Insteon’s tenets is reliability. As you expand an X10 network, you tend to come across reliability issues. In contrast, as you expand an Insteon network, the design actually allows reliability to improve. Insteon devices not only use a power line as a network media, but the airwaves as well, creating a dual band (power line and airwaves) true mesh network. Since every device acts as a repeater, every added node strengthens the home automation network.

In respect to affordability, Dada set the magic number at $19.99 for the low end Insteon products. Another press release at CES 2006 talked about SmartLabs, Inc. introduction of the ICON line of affordable home control lighting products. These products are currently available on Smarthome.com for $19.99.

Not wanting to alienate all the DIY home automation crowd (such as myself), backwards compatibility is a built-in feature on Insteon products as well. All Insteon products can be assigned an X10 address.


Insteon vs Zigbee

Now that we had eased into the interview, we asked Dada about the differences between his Insteon technology and the IEEE standard Zigbee technology (the closest competitor with similar technology). In fact, we asked what disadvantages Insteon has as compared to Zigbee.

The Geeks asked Dada to compare Zigbee and Insteon because Zigbee is the closest competitor in regards to technology and marketable products. Both networking technologies used wireless (RF) and mesh network topologies to communicate; however, Insteon is a true mesh network (communicating dual-band over airwaves and a power line) whereas Zigbee is a routed mesh network.

Dada admitted that in industrial applications, Insteon cannot compete with Zigbee as Insteon gives up too much bandwidth. One of the core differences between Insteon and Zigbee is how the messages travel from the starting node to the end node over the mesh network. Zigbee has a more elegant way to communicate using routing whereas Insteon uses more of a brute force method by using all Insteon devices as repeaters. Of course, a routed mesh network requires routing tables on each Zigbee device and as the mesh network grows, so does the complexity. Insteon devices act as repeaters keeping the simplicity of the network low but eating up bandwidth. Dada mentioned that Insteon will come out with faster methodologies and higher frequencies for applications like hotels in the future but Insteon’s main target is home automation where complexity is a more of an enemy than an aid.

Next, Dada brought up all the advantages Insteon has over the Zigbee Aliance.

The first advantage was the cost of membership and development of products. To be a product developer for Zigbee products, you must be a member of the Zigbee Alliance. The cost of being a member ranges from an entry level Adopting Member price of $3,500 to a Participating Member at a cost of $9,500 and finally, the top end member is a Promoter Membership costing $40,000. Also, to achieve certification of the product you must be an Adopting Member (which costs $3,500) and then to you must also pay for product certification of $1,000 for the first product SKU and $500 per additional SKU.

The various levels for Insteon membership starts at the Developer level for $99. An Insteon Associate is $200 and the top level Insteon Select members pay $2,000.

Dada pointed to the number of members in the Insteon Alliance compared to the Zigbee Alliance as a metric to show the advantage. Since incorporating in August 2002, Zigbee has signed up close to 200 member companies. Since last year Insteon has over 400 members and Insteon had another 40 developers sign up during the CES 2006 show. Also for a mere $200 you can participate in Insteon meetings and committees while you need to outlay considerably more money for the IEEE standardized Zigbee Alliance.

Another advantage Dada mentioned was being first to the marketplace with the next generation of home automation networking technology. Currently there are 40 Insteon devices in development for the home automation industry and 24 products have been released and are priced as low as the targeted $19.99. Insteon products are even available at the Long Beach, California Home Depot store as well as on Home Depot’s online store. No products have been released for home automation under the Zigbee Alliance yet.

Pointing out another advantage and reason why Insteon has gained more members than Zigbee, Dada mentioned that the cost of fabricating Insteon chips is half the cost of fabricating Zigbee chips. Each Insteon microchip, being fabricated by Integration Associates, is being sold at $1.60 per chip with a 25 cent license allowing the small startup company to be on the same playing field as larger companies.

Lastly, Dada discussed how Insteon’s simple architecture provides an advantage over not only Zigbee but other home automation networking technologies including the grandfather X10 network technology from the 1970’s. Rather than run through the various comparison, Dada pointed us to a whitepaper on Insteon.net comparing Insteon to the various other home automation networking technologies.


Home Automation Options in New Homes

Next we moved on to the home automation industry and asked what his thoughts were on why there is such a low percentage of new home builders incorporating and using home automation installers. According to Dada, generally there are no reliable installers for new home builders to use, and the mark up margins that home builders are familiar with are not available in custom home automation setups; therefore, most new home builders do not even provide a home automation option.

Before new home builders start to offer home automation options, consumer and dealer installers must be a proven commodity. So, Smarthome is building a 3000 square foot house in Florida to test their technologies. Dada expects home automation custom installations to start making headway as an option from new home builders later into 2007.


Dada has restructured SmartLabs so Smartlabs Technology can focus on extending the Insteon technology. In the next year or two it will be interesting to see if Insteon can continue to gain support from more and more vendors (like HAI!). Also, the geeks are interested in watching how the next generation of home automation technologies evolves by seeing if the highly engineered Zigbee solution can infiltrate the mostly DIY industry.

Dada and SmartLabs, Inc. were busy during CES 2006 releasing four different press releases:
“SmartLabs Partners With Leading Electronic Home Control Software Companies to Add INSTEON to Home Control Software”
“SmartLabs Introduces the ICON Line of Affordable Home Control Lighting Products”
“SmartLabs Announces First in a Family of INSTEON Chips”
“Smarthome Inc. New Parent Company SmartLabs Inc. Formed With Group of Three Companies”

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