A system and approach for developing a periodic water usage profile and demand for controlling a water heater. A mode may be selected for demand for a certain amount of water of a particular temperature range to be available for use from the water heater. Data on hot water usage may be collected and the usage profile and demand may be calculated from the data. The water heater may be programmed to operate in a certain fashion based on the usage profile and demand. A control knob may be on the water heater control to select a particular demand. Control of the water heater may be operated from a remote device connected in a wireless or wired fashion. An optimization program may be implemented in the control of the water heater for achieving one or more beneficial goals related to water heater performance and hot water production.