Several years ago I closely covered the muni Wi-Fi fad: city-wide wireless that was supposed to (and often failed) to offer consumers a cheaper wireless option than those offered by phone and cable companies. Now the next new thing in wireless — the smart grid — is starting to offer new life for some of these older, fading muni Wi-Fi firms. Last month it was Tropos’ move into smart grid tech, and today it’s SkyPilot Networks. This morning smart meter developer Trilliant says it has bought up the Santa, Clara, Calif.-based wireless mesh network company to connect smart meter data at an aggregation point on the network back to the utility office.
Up until this point Trilliant has largely been focusing on connecting energy data at the neighborhood and home level, and has been working with various third parties — cellular companies, wireless mesh network firms like SkyPilot, ethernet providers — to connect the data from the collection point (where the smart meter data is brought together on the network) to the utility, commonly called backhaul. Its acquisition of SkyPilot will enable Trilliant to use its own wireless gear to offer an end-to-end packaged network solution to utilities.
The companies didn’t announce the terms of the deal but the 9-year-old wireless gear maker couldn’t have been too expensive given one of its once core markets, muni Wi-Fi, is as depressed as the average attendee of a conference on ethanol bankruptcies and acquisitions might be. Trilliant can afford it, having recently raised at least $40 million from an affiliate of MissionPoint Capital Partners and Zouk Ventures. Trilliant is also familiar with acquisition strategies, having merged operations with OZZ Energy Services in 2007, and built its company on the acquisition of Nertec, an automated metering veteran founded in 1985.
Trilliant’s senior vice president of solutions, Eric Miller, told us in a call that he thinks utilities are increasingly looking for private, dedicated networks for smart grid backhaul that can be owned and more easily controlled by the utility. He says that if a utility is using a network like cellular for backhaul, there’s always the concern that other users could clog the network and impact a critical signal.
Miller says that SkyPilot’s wireless gear also offers a larger amount of bandwidth to utilities for smart grid applications than some of the more traditional smart meter connection options. He sees this as a growing trend, as smart grid networks act more like the Internet for energy, with comparable bandwidth needs. SkyPilot makes wireless mesh network gear that is basically a souped-up version of Wi-Fi. In addition, Miller claims SkyPilot’s wireless network backhaul option is significantly cheaper than cellular or the wireless standard WiMAX, and can provide a return on investment for a variety of smart grid applications in less than a year.
One thing is clear: Trilliant is stretching out across more of the smart grid, and expanding its business for competitive reasons. Silver Spring and Cisco have declared their intentions to cover the network portion of the smart grid, so Trilliant could find itself overlapping with those two large players. With the billions in investment from the stimulus funds, and the likelihood of cap-and-trade regulation being passed in the U.S., the smart grid market is set to grow by more than 20 percent — to a $17 billion U.S. market and a $171 billion global market — in the next five years. The market will be big enough for a variety of network players, but companies will need to start positioning their angle and value-add now while the pie is still being divvied up.