Cyber-Rain is a sprinkler controller with a brain – it uses your PC to check the weather and automatically adjusts watering times. Cyber-Rain saves up to 40% on water bills, qualifies for conservation rebates, is good for the environment, is easy to use and typically pays for itself within a year.
Cyber-Rain serves both the residential and light commercial markets segments of the ~$1.5 billion controller market. It has secured substantial wholesale distribution. It is significantly differentiated from competitors through its ease of use, affordability, lack of monthly fees, robust features and two-way communication.
Cyber-Rain is becoming much more than a smart controller. We believe strongly in providing actionable information to facilitate better decisions -- "You can't manage what you can't measure." Cyber-Rain’s unique 2-way architecture and ZigBee based communication gives it the potential to bring ‘smart grid’ capabilities to water. Controllers can be easily localized and automatically updated with local rates, restrictions and water allocations to deliver actionable information to consumers. For example, Cyber-Rain will be able to tell users how much it is costing them to water their front lawn. Cyber-Rain also centrally tracks landscape water usage and savings that can be used by water authorities to enforce conservation programs and measure their effectiveness.
The irrigation controller market is estimated to be $1.3 billion, growing to $1.9 billion by 2015. Smart controllers are currently only a small portion of this, but are expected to be over $1 billion by 2015.
Cyber-Rain obtained SWAT approval in early 2008, which established it as a smart controller and meant it was eligible for most rebates. To prove the product worked, we first targeted the residential market through direct channels such as Amazon.com and home automation retailers such as SmartHome. We now have over 1000 installations and are SmartHome's most successful product launch ever.
In 2009, we laid the groundwork to significantly expand our reach. On the product side, we developed our professional line, which includes the ability to read flow meters and automatic alerts for abnormal current, temperature and flow. We also developed our light commercial line with a more rugged enclosure and long-range radios. With the combination of these two, we are now able to serve a wide range of customers including residential, parks, schools, malls and home owners associations. The light commerical line has been incredibly successful and now accounts for 50% of our business.
We also significantly expanded our distribution in 2009 to incorporate the wholesale market. We are now distributed by Ewing, who is the second largest wholesale distributor in the nation with 194 stores in 22 states. We are also distributed by other regional distributors including Hydroscape, Imperial and Costal Pipco. The wholesale distribution ties in nicely with our light commercial product line and is key to reaching many of the landscape contractors that service these accounts. This segment will get us to operational breakeven.
We are also making small forays into the retail segment through Ace, Sears and Armstrong Garden Centers. The emphasis is currently to learn how to sell through this channel in anticipation of the market switch to smart controllers. For example, California already has a law on its books (AB 1881) requiring that all controllers sold in the state must be smart controllers by 1/1/2012.
Our longer-term interest is to work directly with municipalities to service their customers and take full advantage of our landscape information/localization features. As mentioned above, municipalities can use Cyber-Rain to obtain information benefits that are more actionable than smart meters while also delivering immediate landscape conservation. If municipalities aggregate users onto Cyber-Rain, they will be able to easily monitor and implement water conservation programs. They will be able to track actual landscape water usage and savings by household and plant type. They will be able to automatically incorporate water restrictions and enforce them through reporting/emails to violators. And customers will receive the benefits of a device that conserves water, is easy to use and gives them actionable information on their water usage. Most municipalities report that their #1 question from consumers is how to read their water bill -- Cyber-Rain tells people that they spent $50 watering their lawn and $5 watering their native garden. With better information, consumers will make better decisions.
Cyber-Rain would also like to work with water municipalities to make these conservation and information benefits easily available to everyone. We believe Cyber-Rain should be installed in homes and paid for much like cable boxes. This way consumers get the benefit of the most up-to-date conservation and information technology, while being able to pay a small amount monthly through their water bills instead of a large upfront cost. Municipalities would get the benefits of centralized information and management, so that they can implement and track conservation programs efficiently and effectively.
Cyber-Rain is starting to make this vision a reality. We have secured a water agency to pilot our 'smart grid' capabilities and are in advanced discussions with a couple others. We are applying here in hopes of attracting additional pilots.