The owner's approach

The overall strategy that the Times Company employed was a good one. To achieve a competitive marketplace, the Times Company built a full-scale daylighting mockup and invited two sets of manufacturers to install their shading and daylighting equipment. This field test formed a key strategic cornerstone for accelerating an industry response to the building owner's challenge to a sleepy market. At LightFair 2004, the major US lighting convention, Glenn Hughes, Director of Construction at the Times Company issued a challenge to industry in the form of a "big, hairy, audacious goal" — made popular by the Harvard Business Review:

1. there should be no premium for a dimmable system in a commercial office building,
2. lighting control systems need to self-commission, and
3. whoever can do this will own the market.

At the same time, the Times Company publicized the project garnering interest from many architectural and engineering publications and gave tours of the daylighting mockup to interested parties, including major building owners and developers in the Manhattan area. At the end of the field test, the Times Company incorporated what they learned about each system and created a procurement specification. This procurement specification was let out to eligible manufacturers for competitive bidding. The resultant market response was significant.

The business model for transforming the markets for dimming ballasts and dynamic shading is based on creating a much larger market for these systems, and shifting the market perspective from the current "low volume, high cost" to a "high volume, low cost" paradigm. This requires purchasing power and ideally large volume purchases by a small number of owners to minimize transaction costs. The initial target buildings are thus large owner-occupied buildings where the owners have a long-term stake in the future operations and occupant satisfaction in the building. In the case of dimming ballasts, we have studied component and manufacturing costs and concluded that it is possible to meet target sales prices of $20-25/ballast, although current prices were in the range of $75-120/ballast. At these prices the products have little hope of widespread adoption. The final bids received by the Times Company were in the range of $30-75/ballast, indicating that we were successful in moving the market toward more affordable prices.

This bid price range needs to be qualified. The lower cost range ($30 to mid-$50/ballast) was a bundled cost, which could include the lighting fixture plus DALI ballast or the lighting controls system plus DALI ballast. The bundled cost in some cases included engineering, quality control and testing at the factory, packaging, and shipping to the job site. It did not include the electrical installation at the job site. However, the commissioning of the dimmable lighting system was included. The higher cost range (mid-$50 to $75/ballast) was a stand-alone ballast cost where there was no internal manufacturer's discount. Some vendors were not willing to sell ballasts for a standalone price.

The Times Company examined the various costs associated with procurement and installation of the daylighting systems, then engineered solutions that maximized the value added for each cost increment. These costs were minimized using various strategies given in the Mainstream solutions section of this website.