Intel backs Z-Wave in wireless home automation bid

MANHASSET, N.Y. — Less than a week after Intel Corp. joined the Z-Wave Alliance home automation group, Intel's investment arm announced a strategic investment in Zensys, developer of the Z-Wave wireless mesh networking technology upon which the alliance is founded.

Intel Capital also said it invested in Z-Wave Alliance member iControl (Palo Alto, Calif.), a developer of a software and services platform designed to lower cost barriers for home and business remote monitoring.

Z-Wave is a 900-MHz wireless technology being promoted as an alternative to ZigBee for lighting and home automation. Zensys launched its ZW0201 chip for Z-Wave communications in 2005, claiming that higher performance at lower cost would make Z-Wave the de facto standard for home automation.

Intel's funding of Zensys follows Cisco's earlier investment in the company and strenghtens the Z-Wave developer's hand as it takes on the ZigBee Alliance for control of the home automation market.

"This is our first investment in home control and automation. Its time has come; the market is ready," said Curt Nichols, vice president of Intel Capital and managing director of its Digital Home Fund.

While Intel has invested in other companies for content distribution—Nichols cited Intellon for powerline communications and MovieBeam for video-on-demand—it views Zensys strictly as a home control and automation play for consumer electronics and other electronic and electrical devices.

"We chose Zensys because it has product out there [that] is cost-effective and is interoperable. With the Z-Wave Alliance, they're all working together, and there's a lot of companies behind it," he said. Partners include Leviton, Danfoss, Intermactic, Cooper and, as of last week, Monster Cable.

Steve Troyer, vice president of marketing at Zensys, said the partners want to drive Z-Wave and its RF mesh and control capabilities into Intel's Viiv entertainment platform. "We will work together to develop third-party applications surrounding Z-Wave," Troyer said.

The ZigBee Alliance, for its part, is targeting home automation with a mesh networking protocol designed to run atop an IEEE 802.15.4-compliant radio. But Troyer claimed the Z-Wave Alliance is "setting the pace. We really don't see competition from ZigBee, because we've had such a big jump in the market. We have a hundred [product lines] now, will double that by the summer and will triple that by the end of the year."

Bob Heile, chairman of the ZigBee Alliance, was unimpressed, citing what he said was Zensys' narrow applications range. Instead, Heile said, another home automation effort, the Insteon Alliance, should be concerned about Intel's home automation push.

Zensys raised $16 million in a financing round led by Bessemer Venture Partners in July 2005. Other companies participating in the second round included existing first-round backers Palamon Capital Partners and Vaekstfonden, a Danish growth fund.

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