Generac’s new connectivity focus spurs hiring plans in Waukesha

Company doubling team working on IoT products

Generac's headquarters in Waukesha.

Waukesha-based Generac Holdings Inc. plans to double the size of its team working on connectivity technology, part of an increased emphasis on the Internet of Things in the company’s strategy.

Generac’s headquarters in Waukesha.

Aaron Jagdfeld, president and chief executive officer of Generac, said the company would look to grow the team from 20 to 25 employees currently to 40 or 50 by the end of the year. He noted the job growth would be dependent on the company’s ability to find qualified candidates.

The expansion of the company’s strategy would take a company that has grown to more than $2 billion in revenue with a focus on making products like standby and portable generators and add a solutions business that could create new revenue streams.

“Connectivity acts as a gateway to the home’s electrical system, so what could we do with that?” Jagdfeld said. “There might be a second business model here.”

The connectivity team, based at the company’s Waukesha headquarters, has been leading efforts to incorporate connectivity into Generac products. In May of last year, the company introduced a WiFi-enabled standard model for residential standby generators.

The feature comes with several levels of service. The free version allows users to get a monthly status report on their generator’s health. For $50 per year, users can get real-time access to the status of their generator. Generac’s dealers are also able to pay for a third service that gives them access to information on the status of generators they install and maintain.

Jagdfeld told analysts Thursday the company is adding connectivity to its long-term strategic plan, noting Generac’s unique position within the energy market.

“Every one of our machines, these backup generators, is connected to a home or business electrical panel,” he said. “There are very few companies that can probably claim that space, other than the panel manufacturers themselves.”

The idea is that being plugged into homes and businesses could open opportunities for energy monitoring applications. While users might already know how much energy they are using, Generac could potentially develop services to help save them electricity and money.

“We’ve always had it,” Jagdfeld said of information on energy use. “It was just in a closed loop system between the generator and the panel. Because we didn’t have the connectivity layer before, we didn’t have a way to give you that information or give it to us or give it to a dealer, but connectivity now makes that possible.”

He pointed out Generac has not settled on an approach to monetizing the capabilities opened up by connectivity, but possibilities include data subscriptions, aggregating the data and selling it or participating in a user’s energy savings.

“Those things are to be decided yet in the future,” Jagdfeld said. “It’s a pretty new space.”

There are other companies, startups in particular, working on approaches to help save energy users money, Jagdfeld said. Generac’s advantage would come from its existing distribution network, installed units, expertise in electrical systems and brand strength.

Beyond the hiring in Waukesha, Generac is also planning a roughly $10 million increase in capital spending in 2019 to around $50 million.

Jagdfeld said projects the company is working on this year include the build out of technical centers in Waukesha, a new distribution center in Janesville and expansion of production testing capabilities in Oshkosh.

Investments are also being made in automation, a new headquarters for the Country Home Products business in Vermont and combining some operations of Selmec and Ottomotores in Mexico.

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Arthur Thomas
Arthur covers manufacturing for BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.