Is It Time for DC Power?

In the 1880s, the War of Currents was raging between the two main factions - direct current (DC) which was heavily promoted by none other than Thomas Edison and alternating current (AC) advocated by George Westinghouse. The DC system was developed first and worked well for lighting which was the primary use of electricity in its early days. The AC system, however, has proven to be more efficient for powering motors and for carrying energy across long distances. In the end, AC won and the rest is a history. Today, our electricity grid is AC based.

Thomas A. Edison

When I look around my house today, I see a number of motor-based appliances including the washer, dryer, refrigerator, heater, air conditioner, etc. Those appliances use AC and that is the more efficient source of power for them. Yet increasingly, more and more of my electrical devices use a power adapter because they run on DC power: computer, printer, iPhone, iPad, PC speakers, cordless phone, Apple TV, TV set, alarm clock, radio, not to mention the many devices that use batteries: camera, keyboard, mouse, flashlight, fire alarm, etc.

Using all the power adapters to generate DC power is a hassle because of the lack of standardization. We practically have a different adapter for each device which is hugely inconvenient. Traveling with a bag full of power supplies is a major pain as I have written about in my post Environment and the Power Charger. In addition, power supplies are only about 70-80% efficient which means that about a quarter of the energy we produce (and pay for) is wasted on the AC to DC conversion.

This situation is particularly absurd for the increasing number of households that use solar panels to augment their power supply, often making them entirely independent from the AC power grid. The power produced by the solar panels is DC power. All the solar systems today require expensive inverters to invert the DC current into AC current. These inverters are expensive, often representing a significant portion of the entire cost for the solar power system. They are also inefficient, with efficiencies ranging from 50-90% - this is where we lose up to 50% of the energy produced by the solar panels!

So we are inverting DC solar power into AC current to power the house while losing up to 50% of the energy. At the same time, our devices increasingly use the DC power which requires an adapter that loses another 25% of the energy. So we are losing a significant percentage of the energy that we pay for. That sounds pretty inefficient, doesn’t it?

LED light bulbs may be the trigger

The story becomes even more interesting with the advent of LED-based light-bulbs. Lighting represents about 20% of household’s energy consumption today and switching to the LED light bulbs offers great opportunity to save on the monthly energy bill while doing something good for the environment at the same time. The LED lights are still pricey but those prices will surely go down, just like they did for the fluorescent light bulbs a decade ago. The problem with the LED light bulbs is LEDs work on DC and so each LED bulb has to contain a power converter which converts the house AC into the DC that the LED lights need. More AC/DC craziness, not to offend any rock fans...

All of this begs the question - is it time to wire our houses for DC power? We have standardized DC power in our cars with a slew of gadgets and appliances using the "cigarette lighter outlets" - from phone chargers and GPS to air pumps and mini-refrigerators. Many airlines provide a DC outlet in every seat to power our laptops and other gadgets. Why not have such DC outlets in every room of the house? Why not have the lights wired on a DC circuit?

USB outlets exist today

Sure, we will still need to transport power across long distances and we’ll need an AC circuit to power the big appliances with motors. But most houses have a separate 220V circuit for big appliances in addition to the standardized 110V wiring. In Europe, most house have 220V (well, 240V really) and they also have a 380V circuit for their washer, dryer, water heater and other big appliances. Why not have a separate DC circuit for all the devices? AC would come to the house like it does today but one single converter would replace all of those individual power adapters. On top of that, DC power is easier to store and a couple of batteries could provide an effective backup power supply.

Re-standardizing something as essential as the power system is a major undertaking. But we live in the times of major undertakings. If Google can take pictures of every street in the world and Tesla can build a network of charging stations throughout the entire country and SpaceX can fly to space, we might be also capable of switching to a more efficient power circuitry. We even have a standard - USB - which may not be meeting all the needs, but could be a starting point. Of course, we would first have to convince Apple to add USB interface to all their devices...

PS: Thank you, Brett, for an inspiring dinner conversation!

Sometimes, Common Sense Beats ROI

Return on investment (ROI) is supposed to be the magic that makes any software sell instantly - the ultimate silver bullet for any sales person. You simply offer a logical, monetary justification of the solution’s value and the customer has no alternative but to buy. Right? Yeah, right...

The reality is that ROI can be a very elusive value proposition. For one, it rarely considers any competition. You have a problem and you can solve it by reducing your cost by x% for the price of $y which represents the initial and ongoing fees for the solution. Well, chances are that the competition has a similar solution and - what an audacity - they claim the same cost savings! It will be rare that your solution has a quantifiable capability that results in a unique and competitively differentiated ROI.

More often than not, your competitive advantage lies on a different level - product architecture, user experience, quality of service, or...ehm...price. Sure you can argue that each one of those characteristics too has an ROI but now you start overlaying one ROI calculation of a solution characteristic on top of business value ROI which is probably going to be too complex and less and less credible.

Let me give you an example. Say that the solution in question has to do with accounts payable where we know the cost for processing each invoice and a proposed solution results in a 15% cost reduction per invoice. Every CFO usually knows the number of invoices processed each month and the resulting savings can be compared with the cost of the solution and voila - we have an ROI! Pretty easy, right? But of course, every competitor can claim similar savings, assuming the cost of the solution is comparable.

We could in theory add a set of ROI calculations that estimate the savings of a particular user experience compared to the competition, or the savings resulting from a better product architecture but let’s face it, this will be a tough one to make credible.

That brings me to the main issue with ROI. Some solutions - like my accounts payable example - have a very measurable, credible ROI. Others don’t. Usually, anything to do with knowledge worker productivity or customer experience is difficult to measure. Often, it is impossible - or impossible to make credible.

Just take knowledge worker productivity (or effectiveness) which is a frequently quoted value proposition. What’s the ROI of the telephone on your desk? Or the wi-fi network in your office? How about the ROI of email? It’s hard to argue that these tools don’t contribute to the knowledge worker productivity but the benefit is so obvious that we just don’t bother calculating it. Sure, we can calculate the ROI moving from traditional PBX phone system to Voice-over-IP (VoIP) phones. But we don’t need any formula to justify purchasing phones for every employee.

Any calculation that deals with knowledge worker’s time savings is dubious. Sure, a transactional type of work is really measured in hard numbers but most of the knowledge workers are switching between tasks, going to meetings, spending time brainstorming, thinking, creating, and communicating with others. It is not credible to argue that because a particular solution saved 30 minutes a day, it results is a measurable productivity increase.  

The bottom line is that ROI is not a magic bullet. It may very much help to establish the need or even justify the purchase for certain types of solutions. But there are many solutions purchased not because of an ROI: communication, collaboration and social software, knowledge management, document sharing, office and personal productivity applications - all such offerings are usually purchased because they just make sense rather than as a result of a hard ROI.

Don't sweat the ROI too much. Because sometimes, common sense beats ROI.