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Powering Times Square via Shanghai: How a global smart grid can fuel our insatiable data appetite

Lex Coors, Guest Contributor — Sat, 11 May 2013 17:30:43 +0000

For the first time, this year the number of internet-connected devices is predicted to exceed the global population. While that growth is exciting, all of these devices in their many forms come with dramatically greater demands for connectivity and bandwidth – and will generate large amounts of data that require additional storage space and compute power. Add to that the increasing adoption of cloud computing, big data analytics and other power-intensive activities, and it becomes obvious that the world’s compute power demands will quickly outpace the energy supply that today’s data centers can provide.

To get ahead of these growing demands we will need a smart grid that interconnects power plants and natural energy sources with consumers to intelligently optimize the consumption and distribution of power.

Data centers will become hubs

In order to take full advantage of innovations in smart grid technology, we must first transition data centers into the center of our power and computing activities to monitor and maximize efficiency and plan future energy and cooling sources – all while keeping an increasingly centralized society working, connecting, living and communicating.

Historically, communities were built around religious structures, such as the town church, which brought people together and became an irreplaceable pillar of the community. Today, we are experiencing a similar phenomenon wherein the data center functions as that same pillar but for an online community of enterprises and consumers, positioned at the heart of the digital economy. This will become even more pronounced in the near future, as researchers predict that nearly 75 percent of the world’s population will live in cities by the year 2050.

Efficient distribution of greener power

Many countries are already making strides to develop smart grids within a given region. The primary benefit of smart grid technology is that it allows power from, say, wind farms in Spain, to be distributed to consumers in Denmark with very little energy lost in transport and at a manageable cost. That way, areas that may not have strong natural resources to generate sustainable energy aren’t forced to rely on coal or natural gas to power their infrastructure. This will become an even more important structure as data centers proliferate to match growing global compute and power demands.

Extending the smart grid’s role

By positioning data centers as the epicenter of everything high-tech, we can extend the scope and role of the smart grid beyond efficient structures and smart power distribution. The current concept of the smart grid ensures that buildings are running as efficiently as possible as standalone structures, but also in combination with a green energy source that is distributed via a smart power infrastructure. By constantly measuring and planning future energy sources that require very little energy to generate and have little impact on the environment, data center operators could power their facilities with significantly fewer resources.

Further, by adding an autonomic planning element to the smart grid that can track energy availability and usage throughout the day, operators would be able to rely on the smart grid to determine when to switch between solar, wind or tidal energy, to name a few. This way operators can rely on the smart grid to determine the best time of day to use different types of power, streamlining the switch from one to another and contributing to a more sustainable environment by using clean energy sources.

For instance, if wind farms create the most energy in the late afternoon whereas solar panels pointed east are most useful in the morning, the smart grid can automatically switch from one power source to the other when it is the most viable and beneficial. With this level of intelligence incorporated into data centers and the smart grid linking them with one another, it’s possible that we could support continuous compute growth over many decades.

The need for a global initiative

While this may seem like a radical concept in territories like the United States or India (where the current electrical grids appear to be duct-taped together rather than planned), Europe is a great example of a region that has made significant progress to unite its energy sources and consumers. New resources are being discovered and explored regularly, offering additional juice to power the growing European smart grid, and consumers in large cities like London, Paris and Madrid are already able to benefit from energy gathered from turbines in the ocean and wind farms in the countryside.

In order to achieve true energy efficiency that goes beyond sustainable power sources, though, this must be a global initiative that is collaborated on by universities, governments, non-profits, corporations and even individuals. With global cooperation, we could see solar panels in China powering nightlights in New York City, orchestrated by a network of data centers strategically positioned around the globe.

Lex Coors is vice president, data center technology and engineering group and chief engineering officer for Interxion.

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Silver Spring Networks closes its first quarter as a public company

Katie Fehrenbacher — Wed, 01 May 2013 21:16:22 +0000

Smart grid company Silver Spring Networks just finished its first quarter as a public company after it held an IPO on the New York Stock Exchange in March. The company’s earnings were basically flat for the quarter, reflecting the inherently slow pace of rolling out smart grid networks for utilities, and signing up new cautious, risk-averse utilities.

Silver Spring has decided to focus on its non-GAAP (general accepted accounting principles) numbers, because it said non-GAAP numbers more closely reflect its cash flow. The company takes many months to do pilot projects with utilities and then many more months, if not years, to deliver a broader commercial rollout of its network. It recognizes GAAP revenue for those customers significantly after the deal is closed and the tech is deployed.

For the first quarter of 2013, Silver Spring said its non-GAAP revenue was $73.78 million, which was up from its non-GAAP revenue of the first quarter of 2012 of $59.50 million. On a GAAP basis, revenue for the first quarter was $53.70 million, which was flat from the same quarter a year earlier of $55.45 million.

When it comes to the quarter’s net loss, the GAAP vs non-GAAP numbers actually made a much larger difference. The company’s GAAP net loss for the first quarter of 2013 was $64.37 million, which was a far greater loss than its GAAP loss of the first quarter of 2012 of $18.43 million. Silver Spring Networks execs said that the greater GAAP net loss was due to one time charges related to its IPO. However, its non-GAAP net loss was more reasonable for the first quarter of 2013 at $8.39 million, a slightly larger loss from its $5.27 million net loss from the first quarter of 2012.

In the earnings call, Silver Spring Network execs touted new customer wins including CPS Energy, the largest municipal utility in San Antonio with 700,000 homes and businesses, and Singapower Power, which was its first utility deal in Asia. In addition, Silver Spring also said that it has been working with Masers Energy in Malaysia and moved its partnership with Dominion Virginia Power from a pilot project to a deployment for 195,000 homes and businesses.

Silver Spring Networks sees growth in beefing up its services, beyond its networking hardware, and also in international markets. The company has already contracted with many of the early adopter U.S. utilities, and is looking to gain marketshare in Asia, and South America.

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Siemens and Teradata team up over grid big data

Katie Fehrenbacher — Mon, 15 Apr 2013 16:14:06 +0000

Power giant Siemens and data warehouse veteran Teradata have joined hands to sell big data tools to utilities, including a system that can combine data from both smart meters and grid operational data. As GigaOM Pro analyst Adam Lesser wrote recently in his report on energy data, when smart meters are fully deployed they could generate 1,000 petabytes of data a year, about five times the amount of data on AT&T’s network.

Teradata sells software that can pull together disparate data from different sources and make it available to be analyzed. The company already works with utilities Southern California Edison and Oklahoma Gas and Electric. Utilities can use Teradata’s software tools to analyze data around things like blackouts, power supply and demand, weather conditions, and energy efficiency programs to help them manage the grid better.

Siemens is one of the largest power grid technology suppliers in the world, and in recent years has been bulking up its grid software assets. That move has included acquiring venture capital-backed eMeter, which manages smart meter data, as well as partnering with some of the leading grid software companies.

The union between the big data player and the power grid gorilla shows how the power grid is slowly adopting the network technologies of the internet and other IT-based networks. With grid assets like smart meters and substations increasingly becoming connected, the power grid could be one of the largest “internet of things” type networks in the world.

And to manage those connected things, utilities will need to embrace the most cutting edge data analytics tools.

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Last week on Pro: smart meters, smart watches, and more

Connie Hwong, Community Manager — Sun, 07 Apr 2013 13:00:01 +0000

It was a busy week for our startup, social, and mobile readers — all eyes were on Palo Alto on Thursday, as the Zuck took to the stage to announce Facebook Home launcher for Android devices, dispelling earlier rumors that the social network would release its own phone – at least, for now. Meanwhile, over on GigaOM Pro, our analysts have been getting smart: this week’s featured research includes a flash analysis on the future of the smart watch, a deep dive into big data and smart grid technologies, and more.

Note: GigaOM Pro is a subscription-based research service offering in-depth, timely analysis of developing trends and technologies. Visit pro.gigaom.com to learn more about it.

Cleantech: How energy data will impact the smart grid
Adam Lesser

“The time has come for software development to tackle the smart grid,” declares Analyst Adam Lesser in his latest research report. Now that we’re collecting petabytes of energy-use data from millions of connected devices, companies working in home energy management, building energy management, and utilities must leverage new, affordable big data tools to monitor and impact energy usage. As solar has given cleantech investment a bad name, software (and, to a lesser extent) hardware startups are offering a new range of products meant to increase efficiency of a fossil fuel source, as opposed to advancing renewable energy options. Lesser analyzes the risks and opportunities for these companies and highlights the major trends and takeaways from the companies already working in the space, such as Nest, Opower and ENBALA.

Connected Consumer: Flash analysis: smart watches
Michael Wolf

With the success of projects like the Pebble watch on Kickstarter, followed by rumors that Apple might release its own device, the smart watch is no longer a gimmicky sci-fi gadget. Instead, early offerings from startup companies (or recipients of crowd sourced funding) have proven that there is interest and excitement from consumers, investors, and larger consumer products companies. Analyst Michael Wolf looks at the results of a reader survey conducted last month across GigaOM and GigaOM Pro, summarizing responses about smart watch price points, feature requests, and use cases and adoption rates, among other data points. The report also goes on to look at the Pebble’s market position in relation to potential offerings by giants like Apple and Samsung, as well as the company’s prospects in the near term future.

Social: What is of highest value in today’s business?
Stowe Boyd

In his latest weekly update, Analyst Stowe Boyd looks at the changing nature of work in the American economy. Looking at recently-released data from the New York Federal Reserve, Boyd notes that since 1975, major shifts in labor — from manual, routine jobs towards nonroutine, knowledge-based work – has increased by about 20 percent. Boyd looks at how this shift is affecting operations, culture, and structure in the workplace at large.

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Weightless finalizes its white spaces networking standard for the internet of things

Kevin Fitchard — Wed, 03 Apr 2013 16:05:17 +0000

The Weightless Special Interest Group has put the finishing touches on its wireless radio standard for that uses white spaces spectrum to glue together the internet of things. The SIG finalized the 600-page set of specifications at its Plenary Conference in Cambridge, U.K., on Tuesday.

The final approval is largely a formality, since Weightless SIG members such as Neul, CSR, Cable & Wireless, ARM and Google have already begun working with the technology. Neul has developed its first commercial Weightless chip, and has launched an experimental smart grid network in Cambridge. Google has begun using the technology in broadband trials in South Africa.

But the approval does cement the standard, allowing the SIG’s membership to begin developing products without worrying about technical specs shifting from under them. As defined, version 1.0 of the standard is pretty flexible, allowing it to be used for any kind of machine-to-machine (M2M) communications network, whether it aggregates tiny transmissions from millions of nodes, such as in a smart grid, or utilizes a more traditional high-speed mobile data connection.

The SIG is also making some pretty astonishing claims about the technology’s capabilities: a range of up to 10 km (6.2 miles), allowing for far-flung networks; device battery life for up 10 years, which means monitoring devices could be deployed in the field for long periods of time without maintenance; and chipset costs of less $2, making the barrier of entry for including Weightless in a device extremely low.

Those three specs make up the holy trinity of wide-area M2M communications and would make the technology feasible for all but the cheapest devices in the future internet of things. But it remains to be seen whether Weightless can live up to those promises.

White spaces broadband in the U.K. is taking a different shape than in the U.S. On this side of the Atlantic, white spaces are viewed more as unlicensed broadband wireless technology — sometimes dubbed “Super Wi-Fi”. White spaces are the unused frequencies between TV transmissions, and since the TV airwaves are much more crowded in urban areas, white spaces likely will be most useful for rural broadband in the U.S.

Feature image courtesy of Cillian Storm.

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Silver Spring targets Asia’s smart grids with Singapore deal

Katie Fehrenbacher — Wed, 27 Mar 2013 12:30:14 +0000

Recently public smart grid player Silver Spring Networks has started working on a deal with Singapore utility Singapore Power to build a wireless smart grid network including smart meters. The deal is Silver Spring’s first in Asia and Silver Spring Executive Vice President, Global Development Eric Dresselhuys tells me he hopes it will be the “anchor customer in the region.”

Asian markets are growing at a fast pace and Silver Spring is trying to get a toe hold into the region. Dresselhuys says utilities in countries like Malaysia, Indonesia, Thailand, Laos and even India, look to Singapore Power as a leader. The utility has 2 million customers, and the deal is actually with the company’s division that owns the electricity transmission and distribution, SP PowerAssets.

The pace of the growth of smart meters in the U.S. has been expected to slow down in 2013 and 2014, and then pick back up, according to Pike Research. That’s partly because the early adopter utilities in states like California have already adopted smart meters. The temporary drop is also because the Department of Energy stimulus funds gave smart meters a temporary pop a couple years ago. Networks in some states, like ComEd’s, have faced other types of logistics hurdles.

Outside of the U.S. there’s a lot of growth going on, and particularly in developing countries where economies are booming. Silver Spring has already built networks in Australia, but is looking hard at Latin America. According to Pike Research, while less than 4 percent of the world’s 1.5 billion electricity meters were smart in 2008, that figure grew to over 18 percent by 2012, and is expected to jump to 55 percent by 2020.

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How energy data will impact the smart grid

Adam Lesser — Fri, 22 Mar 2013 15:55:45 +0000

The deployment of smart meters combined with the growth of cloud computing infrastructure has created opportunities to build business models around the volume of emerging energy data. Estimates indicate that when smart meters are fully deployed, they will generate 1,000 petabytes of data a year, about five times the amount of data on AT&T’s network.

That said, challenges remain in terms of dealing with utilities as business customers, getting consumers interested in their own energy behavior, standardizing protocols for effective device-to-device communication, and providing a compelling ROI case beyond just energy efficiency. Energy efficiency plays that use data to solve customer problems and leverage decades of software development and advances in big data will attract investment dollars.

To read the full report, go to GigaOM Pro (subscription required).

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Silver Spring Networks’ stock jumps up close to 30% in debut

Katie Fehrenbacher — Wed, 13 Mar 2013 15:02:49 +0000

Smart grid company Silver Spring Networks saw its shares soar by close to 30 percent in early morning trading on the New York Stock Exchange Wednesday. Late last night the company priced its shares at $17 (the mid point of its range), and its stock reached a high of $22.49 in morning trading.

By 11:00 AM EST, the stock had dropped a bit and has been hovering around $21. As of 3:00 PM EST, the stock was at $21.68.

Silver Spring also last night decided to make 4.75 million shares available, which was 1 million shares more than the company had originally planned. Silver Spring raised $81 million in the process. In addition, longtime investor Foundation Capital also plans to purchase $12 million worth of stock at the IPO price in a private placement.

Silver Spring sells wireless networks and smart meters to utilities that can be used to run power grids more efficiently and offer new types of grid services. The company counts large utilities as customers like PG&E, Florida Power and Light, Oklahoma Gas & Electric, and Baltimore Gas & Electric.

The company filed to go public back in the summer of 2011, and waited out the entire year of 2012 before actually going public. The company’s lead investors include Foundation Capital and Kleiner Perkins.

Silver Spring Networks CEO Scott Lang told me in a phone call from the New York Stock Exchange this morning that the company “couldn’t be more pleased” with the IPO and that the process was “oversubscribed.” In response to my question of why it took so long to go public, Lang said that there were external market conditions and volatilities that were outside their control.

“We had a strong year in 2012 and we were patient,” said Lang. Lang owned 2.8 percent, or 1.04 million shares, before the IPO. At $21 per share, that percent is worth $21.84 million. Typically investors and executives have to hold their shares for at least six months before selling them.

Updated at 3:00 PM EST with the most recent stock price.

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Silver Spring Networks prices boosted IPO, raises $81M

Katie Fehrenbacher — Wed, 13 Mar 2013 13:24:32 +0000

Smart grid company Silver Spring Network’s long awaited IPO is finally here. On Tuesday night the company priced its IPO at the midpoint of its planned range, at $17 per share, and also made 4.75 million shares available, which is 1 million shares more than the company had originally planned. Silver Spring will raise $81 million in the process.

Selling more shares than expected is good news, as it means that the company had more interest than expected from investors. Silver Spring will start trading on Wednesday morning on the New York Stock Exchange under the symbol SSNI.

The IPO has been over a year and a half in the making, the company first filed to go public back in the Summer of 2011. Back then the maximum IPO was listed as $150 million. Along with the debut today, longtime investor Foundation Capital also plans to purchase $12 million worth of stock at the IPO price in a private placement.

Silver Spring sells wireless networks and smart meters to utilities that can be used to run power grids more efficiently and offer news types of grid services. The company is increasingly looking to sell software and services, and not just infrastructure, to help it boost its margins.

The IPO is one of just a few that has come from a smart grid startup backed by venture capitalists. Foundation Capital owned 32.7 percent before the IPO, while Kleiner Perkins owned 15.6 percent before the IPO.

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Silver Spring Networks IPO expected on Wednesday

Katie Fehrenbacher — Tue, 12 Mar 2013 19:08:20 +0000

Smart grid networking company Silver Spring Networks is expected to start trading as soon as Wednesday of this week on the New York Stock Exchange under the symbol SSNI, according to the Wall Street Journal, and other media reports. After first filing for an IPO back in the summer of 2011, the smart grid company now plans to sell 3.7 million shares at a price of between $16 and $18 per share, which at the midpoint would raise $63 million for the company.

That’s a pretty modest IPO for the decade-old company, and is less than half of the maximum that Silver Spring originally planned to raise a year and a half ago. If Silver Spring does go public Wednesday morning, expect it to price its shares late in the day on Tuesday. Along with the IPO, longtime investor Foundation Capital also plans to purchase $12 million worth of stock at the IPO price in a private placement.

Silver Spring has a lot of business, and is one of the leaders when it comes to selling smart grid networks to utilities. However the business is inherently slow going (with long sales cycles), and pretty low margin. In 2012, Silver Spring generated $196.74 million in revenue, which was slightly down from its net revenue in 2011 of $237.05 million. The company generated a net loss in 2012 of $89.72 million, which was a smaller loss than its net loss in 2011 of $92.36 million.

Because its sales cycles are so long, its backlog of deals and billings (what it’s billed customers for but hasn’t converted to revenue yet) are more telling of how much momentum the company has. Silver Spring says it had $304.33 million worth of billings in 2012, which was a jump from its $236.13 million worth of billings in 2011. Silver Spring says it has $508.06 million worth of deferred revenue by the end of the 2012.

We’ll keep you updated on potential pricing and the debut of the IPO.

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