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Originally published Monday, March 31, 2008 at 12:00 AM

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Brier Dudley

Get ready for home automation

Talk about optimism. Executives at Lagotek, a Bellevue company developing fancy home-automation systems, are convinced they'll sail through...

Seattle Times staff columnist

Talk about optimism.

Executives at Lagotek, a Bellevue company developing fancy home-automation systems, are convinced they'll sail through the housing downturn."We're in the perfect time in the perfect place," said Ilya Billig, vice president of business development.

It's counterintuitive, but Billig said Lagotek is seeing more interest among builders desperately seeking ways to make their homes stand out in a buyer's market.

"Now they listen," he said. "They say, 'We have 100 homes sitting, not selling; what can we do — how do we differentiate ourselves from other builders?' "

Lagotek, now approaching annual sales of $5 million, was started in 2004 by a group of former Microsoft engineers.

They developed a system that wirelessly controls lights, heat, security equipment and entertainment systems, using touch-screen control panels that fit in standard double-gang electrical boxes.

Lagotek's "Home Intelligence Platform" is a distributed system, with no central box. Instead it's powered by processors built into the control panels that work like those in smartphones.

The system syncs with PCs and digital media players in the home, and it seems especially suited to Ultra-Mobile PCs and other handheld computers.

Two weeks ago, Lagotek extended the system to mobile phones, so you can remotely turn off lights, adjust the thermostat, view security cameras or receive alerts if, for instance, you leave a door or window open.

Automation systems are common in high-end homes but they used to cost $50,000 or more.

Lagotek is among a handful of companies bringing prices down to about $10,000, largely by writing better software that simplifies setup and operation.

These companies also are taking advantage of wireless standards that are finally crystallizing, with promises to further lower costs.

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Home automation is also the next step beyond the universal remote controls I wrote about last week. Those devices "have the potential to dramatically increase consumer awareness of the capabilities and convenience that control systems can provide," according to a 2007 report from Parks Associates, a Dallas research company.

Parks expects home-control sales will reach $6 billion in 2012, up from $3.8 billion in 2008.

Other components of the automated home are falling in place, the report said: Among U.S. homes, 42 percent now have programmable thermostats, 36 percent have home theaters and 10 percent have lighting-control systems.

While Lagotek is charging ahead, I'm guessing the next big evolution will come when Microsoft releases the next version of Windows. It's likely to offer new tools to build PC-based home-automation systems, potentially lowering their cost and pushing them further into the mainstream.

Billig said he's not too worried about competition from Redmond, where he used to be a manager. He said consumers are wary of controlling their homes with a PC, and he estimates it would take Microsoft three years and $100 million to build what Lagotek's now selling.

I thought that was a clue that Lagotek might sell for $100 million, but its president, Ron Risdon, said it's worth far more because of its position in a market that's just taking off.

Brace yourself if you're one of those people still trying to program the VCR.

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or bdudley@seattletimes.com.

Copyright © 2008 The Seattle Times Company

About Brier Dudley
Brier Dudley offers a critical look at technology and business issues affecting the Northwest.
bdudley@seattletimes.com | 206-515-5687

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