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Philips and Cisco Form Global Strategic Alliance

AMSTERDAM, The Netherlands — Philips (NYSE: PHG, AEX: PHIA) and Cisco (NASDAQ: CSCO) Wednesday announced a global strategic alliance that will create new value in energy savings, building efficiency and employee productivity, made possible by the Internet of Things (IoT) in modern offices. This alliance brings together Philips’ LED-based connected lighting system with Cisco’s IT network to address a global office market estimated to be worth EUR 1 billion.¹

Lighting is everywhere, making it one of the easiest ways to bring the Internet of Things (IoT) to office buildings. Light points in the Philips system, equipped with sensors and software applications can be connected using Cisco technologies. This lighting network creates a pathway for information and helps enable new services. Philips and Cisco will also collaborate on a joint go-to-market strategy.

Bill Bien, SVP, Head of Strategy and Marketing, at Philips Lighting, said “Our alliance has two of the world’s biggest and trusted lighting and connectivity brands working together to bring the Internet of Things to life in offices and commercial buildings across the world. Customers will receive the best energy efficient lighting experience in the connected world and be able to use information acquired from their connected lighting system to save energy, reduce costs, improve productivity and optimize their workspace environment. Lighting that is connected to highly secure, reliable IT infrastructure will form the backbone of the smart office of the future.”

Together Philips and Cisco aim to accelerate adoption of this technology in the market and deliver increased connectivity, comfort and efficiency, constituting the most innovative features of a modern building.

The integrated solutions will replace standard copper wire with ethernet wire, introducing the potential to take union labor out of the equation. In regard to this issue, Steve Steinhilber, VP of Strategic Alliances from Cisco said, “I think that there is a new opportunity, a new ecosystem that is emerging. So, when you look at the copper… in terms of wiring individual luminaries, that’s one aspect that is minimized with this particular solution. On the other hand, you do have an extended role for the commissioning and the deployment of the PoE cabling networks, as well as switches, and the ecosystems associated with that, and the luminary devices as well. And so I think that there is a new ecosystem emerging that will create new opportunities and new jobs in that environment.”

Bien adds that the focus of this alliance is on new builds and extensive retrofits, which “leaves a large portion of the market to be addressed by other technologies, including copper wiring. I think that you would see that the ease of this solution makes it such that, really, existing installers could also install it. But there is still a sizable market that goes on for those installers and for our distributors, which we’ll continue to support and work with closely to make sure they have the best technology in the marketplace to be able to offer their customers.”

Edwin Paalvast, SVP EMEAR, Cisco and executive sponsor of the Cisco – Philips Alliance, said “The world is becoming digital, and by working with Philips, we can help building owners more quickly digitize their lighting networks to drive better user experiences and efficiency. By partnering with Philips, we are delivering a reliable PoE-powered LED lighting solution using a highly secure IT network.”

Lighting is a logical first-step to bringing IoT to enterprises worldwide. Equipped with sensors, connected lighting becomes intelligent to sense and measure the environment. For example, occupancy sensors in the system can provide information on space utilization to help reduce costs.

Typically, lighting is responsible for 40 percent of a building’s electricity use. Nearly 80 percent in energy savings and reduced building maintenance costs can be realized by managing, integrating and controlling a Philips LED connected lighting system through a network with Cisco.

To make offices more comfortable, office workers can personalize and adjust LED lighting to their preferences and tasks. For mobile access, office workers can use a smartphone app to access other building services through a communications network.

To showcase how Philips and Cisco can work together to unlock the benefits of the IoT in offices, Cisco is installing a state-of-the-art Philips connected lighting system at its Canadian headquarters in Toronto.

“The possibilities of this connected lighting system are endless,” said Richard Lees, Senior Project Manager at CBRE Limited, a commercial real estate and investment services firm. “There are so many capabilities of this system that we haven’t even explored yet.”

¹ Estimate by Royal Philips on the size of the total addressable office lighting market.


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