It has a pilot project with the Department of Defense related to the electric sensor technology as well as an exclusive partnership on the water side with HydroPoint Data Systems, a company that helps companies analyze and monitor water usage. The Belkin sensors are one of 22 projects that the DoD selected to pilot, and those 22 were selected from 468 proposals.

To learn more about these sensors, branded Echo Water and Echo Electricity, I spoke with Kevin Ashton, the general manager, global product management for Belkin Business, and the guy who says he coined the term “internet of things.” Ashton joined Belkin when it acquired his startup, Zensi, three years ago. Now he’s excited to share the last three years of his work with the world.

There are two elements to the Echo sensors: a water management platform and an electricity management platform. Customers deploy sensors in buildings or on pipes to measure electricity by tracking voltage and a few other elements to determine what’s sucking power and how it’s behaving, and then the sensors send that data to the cloud. On the water side, sensors located under a sink detect pressure and vibration to understand water usage, and sends that information to a cloud-based service.

Once the data is collected, Belkin runs algorithms to figure out if things are behaving properly, where energy savings might be had and general patterns around usage that might help companies or homeowners optimize their appliances or even behaviors. At Zensi, the original plan for the voltage-reading technology was to create an itemized electric bill for different apartments or even different gadgets inside the home.

Now, Ashton said the system is still as precise, but the use case is still evolving. He said that the plan is to open this data up to utilities and other services eventually, but right now the focus is on getting this deployed and in use in different buildings. Ashton said that so far partners and Belkin are fielding calls from commercial customers but also new homebuilders, who see this as a good way to help “green” new homes for high-end clients.

Of course, the real power for these sensors — the algorithms, data and insights they produce — is linking them to other gadgets, perhaps enabling a true demand-response system between a customer and utility or even helping a homeowner set devices to react to the cost of power. Aston realizes this, which is why he’s a proponent of open standards and making it easy for people to switch out devices and talk to management systems. “We hope to let the magic happen with well implemented open standards,” Ashton said in an interview. “The value in this system may be in places we don’t expect.”

I’m pretty confident that the value is in the algorithms that Belkin’s Echo sensors use to glean insights, but I’m glad Belkin’s planning to let others build on those smarts to make the overall information exchange even better.

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This week we’ve analyzed the state of cleantech venture capital and used data to discern myth from reality. In summary, we’ve found that:

• There will be sufficient late-stage capital in the next few years to feed the ’06-’08 “baby boom” of cleantech start-ups, but there may be a corresponding dearth of Seed/Series A money.
• Contrary to conventional wisdom, cleantech VC is not sucking wind compared with VC overall. The two are performing about the same on an interim basis and cleantech investment has actually overdelivered on IPOs.
• Half of successful cleantech start-ups stumble on the way to the finish line, enduring a down round that disproportionately hurts founders and employees. Entrepreneurs should approach fundraising with a long-term orientation and be wary of sky-high valuations.

A few parting thoughts as I muse on these points:

• It’s still really early. Cleantech venture capital investment only became substantial in 2006, and the average VC-backed start-up takes eight years from founding to exit. That means the real fruits of this labor are yet to come. If there is ever to be a cleantech IPO boom, one would expect it to start in the middle of this decade.
• Limited partners should reassess early-stage cleantech. More and more cleantech venture capital is earmarked for late-stage growth equity deals. As a result, these investment rounds are likely to engender price competition that depresses returns. In contrast, Seed/Series A cleantech financing looks to be cyclically underserved, and the enhanced return profile that accompanies scarcer capital could help offset early-stage technology risk. If I were at an LP institution right now, I’d be looking for the sharpest early-stage cleantech investment team that can zig while most investors zag.
• New company founders should weigh alternatives to VC. While CEOs at late-stage firms will have adequate financing options in the next few years, new cleantech founders will find themselves fiercely competing for capital. Think of it this way: Since 2009, about 50 cleantech ventures per year receive Seed/Series A funding. Do you want to place all your bets on being one of the fifty? There are plenty of other underexploited options for cleantech entrepreneurs – including grants from agencies like ARPA-E during initial technology development (case study: FastCAP Systems), funding from a large corporation in exchange for a preferred license or other IP rights (case study: Liquid Metal Battery Corporation with Total), and early sale to a corporation with an executive job in the bargain (case study: Zensi with Belkin).
• The optimal investment vehicle remains to be figured out. I pointed out in the second post that VC firms have, so far, mostly restricted their funding to companies that fit in the venture “box” – i.e., $10-30 million invested over the life of a technology company, all in equity, for an outcome in five to 10 years. By definition, this excludes big-payoff categories with mondo capital requirements (like nuclear fusion), fields that have acceptable capital needs but stretch the timeframe (like advanced materials), adjacent investment opportunities in cleantech value chains (like land deals for biofuel feedstocks), and financing the deployments of technologies versus the technologies themselves (an odd one, since more value tends to get created downstream). All of these omissions leave money on the table.

A number of VC firms – mine included – are blazing a trail by shaving these square pegs for the venture model’s round hole, and flexible alternative investors like family offices, superangels, and corporations have a window of opportunity exploit. Despite this, I can’t shake the suspicion that a truly purpose-built cleantech investment vehicle lies in the future, not the present.

Thus ends our whirlwind tour of cleantech venture capital. Studying a fuzzy topic like this keeps a person humble, because most of the predictions you make are likely to be wrong! Please don’t hesitate to contact me with your own, especially if they differ.

Matthew Nordan (@matthewnordan) is an energy VC investor at Venrock, one of the oldest and best-performing VC firms. Earlier, he co-founded and led the energy tech analyst firm Lux Research and forecasted technology futures at Forrester. There’s more where this came from at mnordan.com.

Image courtesy of RSinner.

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Since the iTunes Music Store was announced in 2003 with only 100,000 tracks available for purchase, press and bloggers have been asking, “when will Apple release a subscription model?” Each time a new music service pops up from Microsoft, RealNetworks and Sony, the question is asked again. Jobs repeatedly insists people want to own content, and a subscription plan doesn’t allow for that. The thing is, when he makes a claim like that, it suggests Apple has considered the idea and decided it will never go that route.

If you look back at Jobs’ past quotes about mobile phones, tablets and even cloud services, he shot those ideas down publicly to the point where the person asking feels like an idiot. “The iPod is not a good device for watching video,” he said in 2004, but the iPod Video came out a year later as a “revolutionary way to watch video on the go.” Actions speak louder than words, and in the case of the Netflix partnership, Apple has given us two directions to ponder for the rumored Apple iTunes Subscription Model.

Netflix is a subscription service. You pay a set dollar amount each month, and Netflix mails you a DVD that’s in your queue, as well as providing access to Netflix Instant, which allows anyone with an Internet connection and a computer or gaming device to watch streaming movies any time. The selection of videos available to stream isn’t great, but it’s steadily improving. Over the past two years, Netflix has grown the Instant accessibility by partnering with hardware makers like Sony televisions, Panasonic’s Blu-ray players and Microsoft’s Xbox to make streaming available via gaming devices.

The inclusion of Netflix on Apple’s latest television appliance was a surprise to me, mostly because it shut down any rumors that Apple may one day offer a subscription service. Including Netflix on a web-connected television appliance isn’t a lure for potential buyers, since most of Apple’s potential Apple TV customers have one or more devices in their home capable of using Netflix Instant (computer, iPad, Blu-ray player, Xbox, etc.).

Did Apple add Netflix simply to play catch-up, or was it only Jobs’ way of saying, “Here’s a subscription service. Trust us, we’re not going to do one”? What about movies Apple wants you to rent for 99 cents through iTunes that you can now get through Netflix?

My far-fetched theory is that Apple is keeping an eye on Netflix and how consumers use this subscription model. I’m pretty sure that Apple realizes that the selection of new releases available within Netflix Instant is mediocre, and this is only a strategic partnership to help sell Apple TV to the consumers who prefer to use one device for all television and movie viewing, and Apple fans who don’t mind having four devices that all include the same access.

The day that Apple realizes it’s losing sales to Netflix Instant or it finally sees a viable business model for offering a better subscription service than Netflix, we’ll see this feature yanked from Apple TV. Of course, it’s not like Netflix is a music subscription service. Those rumors about an Apple music subscription service can keep flowing no problem.

The rumors that Apple TV would be getting an App Store treatment excited a lot of people, myself included, because app developers like Netflix and Hulu could easily build apps in the SDK and circumvent Apple’s built-in features. We all know Apple can do whatever it wants with its store, but with both apps available on the iPhone and iPad, Apple shows it doesn’t really care that using these services is just as easy as renting a movie the Apple way.

Apple’s partnership with Netflix indicates the company isn’t interested in the subscription business right now, but as soon as this becomes a priority, you can bet that Netflix won’t be an Apple TV feature anymore.

For example, as I describe in an article at GigaOM Pro today (sub. req’d), five-year-old Efficiency 2.0 has developed algorithms around an energy reduction recommendation service that it sells to utilities. Its service uses publicly available data, like real estate info and income data, to make highly personalized and targeted energy efficiency recommendations to utility customers. Efficiency 2.0′s CEO Thomas Scaramellino thinks of his service as the Mint.com of energy.

EcoFactor, a smart thermostat software maker, also uses publicly available info, like weather data and real estate data, to shave off energy use via connected thermostats. Zensi, a startup recently bought by Belkin, uses algorithms similar to facial recognition software, to listen to the voltage noise of appliances in a home.

Regen Energy, a Toronto-based startup, has developed a wireless node that uses algorithms based on “swarm logic” — in which each individual makes a decision based on the actions of the group — to reduce energy consumption of HVAC systems in commercial buildings. The idea is if energy-consuming devices in buildings were made to act like a swarm of bees, a school of fish or a flock of birds, it could significantly cut energy consumption.

The potential business opportunity is massive, and when utilities invest billions of dollars into smart grid infrastructure over the next 5 years they will be overwhelmed with the amount of energy information that is unleashed. These energy info innovators will be crucial to helping utilities make sense of the data, and help them reach their energy efficiency targets. To read my entire analysis go check out my article on GigaOM Pro, and come to Green:Net today to learn more about the intersection of algorithms and energy.

Read the full article here.

Image courtesy of woodleywonderworks photostream.

Of course no word on the acquisition price that Belkin paid for the team, which had five founding members, plus a number of consultants, and was based in Los Angeles. Ashton wouldn’t even give a range — making it about as easy to guess that it was a pretty low price as it was to determine that Buzz Aldrin would get kicked off Dancing With the Stars in the early rounds.

But getting bought by a company like Belkin in a company’s infancy — even if it wasn’t for a lot of money — has a definite upside. As our business-savvy readers know, if you don’t raise funding, you don’t have to give away a percentage — often around 30 percent — to venture capitalists. Belkin can also offer Zensi a large platform for mass production of its technology as well as its longtime expertise in developing slick consumer interfaces.

Secret Energy Sauce

So what exactly was Zensi’s secret sauce and why did Belkin (and others, supposedly) want its technology so bad? Ashton says that the technology, which was developed at the School of Interactive Computing at the Georgia Institute of Technology and the Computer Science & Engineering and Electrical Engineering department of the University of Washington, can pick up the different voltage noises that various home appliances emit through the electrical infrastructure. For example, different kinds of TVs, from plasma to LCD, use different voltage and produce a different voltage noise.

While any electrician knows how voltage noise works, says Ashton, the secret sauce is the smart algorithms that the team created. Those algorithms can process the voltage noise and determine what type of appliance created it and how much energy it is consuming. The technology takes advantage of signal processing technology, which Ashton points out is a little bit like facial recognition software in that it can figure out “who is who.”

Zensi’s original product was actually a system for generating an itemized electricity bill. Ashton says the company brought that product to an “advanced prototype stage” and had begun  talks with a variety of utilities for its service. But working with utilities and working with a consumer electronics company like Belkin are at different ends of the spectrum. When I asked Ashton what Belkin planned to do with its technology, given the differences in the market — Ashton said there’s several options: sell a service bundled with a smart meter, sell a product directly to customers (like Belkin does now), or use the technology to add features onto existing Belkin products. Asthon said he wouldn’t rule any of these options out, but the end goal is to help consumers view more of their energy usage.

In other words, the union is still in the research and development phase, and Ashton said that any type of product is more than a year away. Like most moves from consumer electronics companies eying energy management, this is a small step and could end up being more experimental than anything else.

But as Ashton put it to me: “Everybody is looking at this space right now. There is a lot of interest among larger companies about this emerging market.” There has been a lot of talk about broadband service providers moving into the market of selling energy management services to consumers (though I was expecting more attention in early 2010 than we’ve seen so far), including Verizon, and Comcast (see Broadband Service Providers Are About to Ride the Home Energy Wave on GigaOM Pro, subscription required). Recently startups have been developing applications for the iPad that can control home energy consumption (see How the iPad Could Disrupt the Home Energy Management Market), hoping the iPad could be next breakout home energy device.

Image courtesy of mark sebastian’s photostream.

This week saw me doing another flip-flop on my working browser, something I do from time to time. I have switched to using Safari full-time on the MacBook, which is my main desktop system. I love Firefox, don’t get me wrong, but I spend so much time in the browser that I need it to be as fast as possible. I tested the latest version of Safari and found it to be faster than Firefox, so I have switched back to Safari for now.

I still use Firefox on Windows, because I don’t find Safari to work as well as either Firefox or Chrome on that OS. I find Firefox to be the best on Windows, so that’s what I use. I am able to keep Firefox and Safari bookmarks in sync using Xmarks on both the Mac and Windows. It sure makes it easier to switch back and forth as needed with no penalty as far as bookmarks are concerned.

Palm at hand

The good folks at Verizon sent me a Pre Plus and a Pixi Plus to evaluate. Both of these phones are available from Verizon, in fact Big Red has the exclusive on them both.

Overall I like both phones, although they can be a tad sluggish at times. This happens mostly when there is a lot going on. I must confess that even though the screen is smaller on the Pixi Plus, I am finding it to be the phone I prefer using. The Pre Plus is nice enough, but having the keyboard always available on the Pixi Plus is convenient. Sliding the Pre up to expose the keyboard has never felt totally natural, and the Pre Plus is the same.

The keyboards on both phones are roughly the same size and easy to use. The keyboard on the Pre Plus does have a mild curvature to it that the Pixi Plus lacks. In other words the rows of keys are in a slight “smile” shape, while the Pixi Plus rows of keys are straight across. I have to admit I don’t feel any difference typing on either one, so for me the difference is rather moot.

I have been testing the Palm Mobile Hotspot that is available on both the Pre Plus and Pixi Plus. A special Mobile Hotspot plan is required for $40 monthly, that is on top of the $30 monthly smartphone data plan required with these phones. Some folks may find that price to be reasonable as the Mobile Hotspot allows up to five devices to be tethered to the phone over Wi-Fi for sharing the 3G connection.

It’s a nice arrangement but I have run into an issue while testing the Mobile Hotspot in Houston. The bandwidth has been consistently slow using the Hotspot function on both phones, especially when compared to speeds obtained with the MiFi which uses the same 3G network as the phones. I’m not sure what is causing my consistently bad results in Houston, I have tested it here in San Francisco and have seen good bandwidth on both phones. It seems to be a Houston thing, although the MiFi doesn’t reflect the bad connection speeds that I see on the phones.

Some folks like to know what mobile gear I bring on trips like the one I am on now, and I am sharing that with you now. This trip is only a two day trip, my favorite kind as I can travel as light as I want with no ramifications.

To that end here’s my SF mobile kit that I am using:

• MacBook (13-inch)
• 2nd MacBook battery
• MiFi
• iPhone 3G
• Palm Pre
• Kindle 2

This kit is nice and light yet fully functional. I meant to bring the new Magic Mouse along for the ride, but I ran out and forgot to throw it in the bag. I am finding I don’t really miss it that much as the MacBook trackpad is more than adequate.

I also threw the Palm Pre Plus and Pixi Plus in the gear bag, but that was only to show some of the GigaOM folks who wanted to check them out. I didn’t even bring the chargers for them.

e-Books of the week

This week I continued the epic journey into the world of the Wit’ch series by James Clemens I started last week. I am already in Book 4, Wit’ch Gate, as I can’t put them down. There is more action in these books than many fantasy books, and the story is told in great style. I am sad there is only one more book to go.

Wrap-up

It’s after midnight and I am running out of steam so I’d better bring this to a close. I have an early morning too, so I’ve got to get some sleep. I hope you enjoyed this week’s column and that you’ll come back next week.

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Many went on to proclaim that the web had failed. It seemed a tad sensationalist to suggest that, for only a handful of sites went on the blink. I didn’t hear that Google, Facebook, Yahoo, Microsoft or MySpace broke down. For them, it was business as usual. Nevertheless, this morning, I decided to check two sources that monitor the performance and traffic patterns of the web. From web monitoring service Keynote Systems:

Beginning during the late afternoon pacific time major news sites, including those of ABC, AOL, LA Times and CBS all started to show marked slowdowns in performance. Beginning at 6:00 p.m. Eastern time until 8:00 p.m. Eastern, the following sites showed became nearly unavailable (down to nearly 10% availability): ABC, CBS, LATimes, AOL, CNN Money.

Beginning at 5:30pm (EDT), the average speed for downloading news sites doubled from less than four seconds to almost nine seconds. During the same period, the average availability of sites on the index dropped from almost 100% to 86%. The index returned to normal by 9:15pm (EDT).

I got further details from Akamai, which operates a global content delivery network that gives it a unique view into traffic patterns on the Net. Around 6:30 p.m. EST, Akamai’s Net Usage Index for News spiked all the way to 4,247,971 global visitors per minute vs. normal traffic of 2,000,000, a 112 percent gain. Of this, 3,556,495 visitors were accessing sites from within the U.S., Akamai said.

Akamai’s data shows that the traffic started to build around 5:30 p.m. EST and peaked just before 8 p.m. The big spike to online news sites appears to have lasted about 20-30 minutes. This morning, the traffic to these news outlets remains higher than the daily average; at last check it was around 3 million visitors worldwide.

The data collected by the two agencies shows that sure, there was massive spike in the traffic that lasted for a little while. And then things pretty much returned to normal.

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