Blog Post

Cisco's Latest Consumer Play: The Smart Grid

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

The announcement this week that Miami could soon be home to the nation’s largest smart grid project brought together some of the biggest companies in the space, GE and Cisco; one of its most promising startups, Silver Spring Networks; and the utility arm of the nation’s largest wind and solar energy generator, Florida Power & Light (FPL). But despite all the stimulus-friendly talk of being “shovel-ready,” the project was first outlined in D.C. at a dinner meeting just six weeks ago, according to Cisco spokeswoman Jennifer Greeson. In other words, there are plenty of details yet to be worked out — including what roles each of the partners will play.

Some things are clear: GE will provide a million smart meters and certain in-grid technology; Silver Spring, which we’ve referred to as the “Cisco of smart grid,” will provide the core networking infrastructure, from the utility substation down to the home, as well as some of the back-end management software. Cisco’s role, meanwhile, is less clear.

As part of the Energy Smart Miami announcement, Cisco CEO John Chambers repeatedly called the smart grid an “instant replay” of the Internet. But while Cisco’s role in the Internet revolution has largely been to provide the workhorse networking tools for large-scale data centers, the company isn’t angling for a major role in FPL’s backend systems, according to the partners, though it will act as an adviser on some key networking issues. Instead, Cisco has its best opportunity yet to leverage some of its recent acquisitions in the consumer space by providing devices and networking that will help FPL’s residential customers manage their energy use.

In our Smart Energy Home report, we predicted that as online video and Internet-connected devices became increasingly mainstream, home energy monitoring tools would merge with home networking systems. Over the last few years, Cisco has been edging its way further and further into that space. It acquired Linksys in 2003; KiSS Technologies, a manufacturer of networked TVs and devices, in 2005; and set-top box maker Scientific Atlanta in 2005. In 2008, it shelled out $120 million to acquire home-networking company Pure Networks, and most recently it acquired Pure Digital, maker of the Flip digital video cameras. Through the smart-grid partnership, Cisco may be able to leverage the skills and technologies that made these companies good acquisition targets to begin with.

For example, with its Pure Networks purchase, Cisco got the HNAP protocol, which can be used for easily managing various hardware devices on a home network as part of a single system — exactly the kind of tool a robust home energy management system needs. Tie that to the Scientific Atlanta set-top boxes, and Cisco could offer an easy way to display energy information — on consumers’ TVs. That would be a win for energy management, and for Cisco, which would get its devices into consumer’s homes under the feel-good energy-saving marketing message.

Greeson wasn’t able to confirm which consumer-side technologies might be part of the deal, but Marthin de Beer, senior VP of Cisco’s Emerging Technologies Group (which last year took an unnamed smart grid player under its wing), says the company is working on energy management tools, so startups hoping to get a piece of the Miami action may soon be facing a fierce new competitor. But Cisco will also bring other expertise to the table that could ultimately create a stronger smart grid market overall. Both Greeson and Silver Spring Networks VP of Markets Eric Dresselhuys said that Cisco had an important role to play in cyber-security issues, interoperability standards, and the overall architecture of an end-to-end smart-grid network. Dresselhuys says his company’s work and Cisco’s are “very complementary” in these areas.

Cisco also has other non-consumer products (such as EnergyWise) already aimed at the smart energy space, and it could wind up snagging parts of Silver Spring’s anticipated role in the project. But Dresselhuys pooh-poohed this idea: “What we do isn’t what they do, and what they do isn’t what we do,” he said, a sentiment that fits nicely with the third leg of Cisco’s innovation strategy: “Build, buy and partner.” And when asked if Silver Spring could become a potential acquisition target for Cisco, Dresslehuys deflected the question: “I hope that we find increasing numbers of things to do cooperatively in the market,” he said.

This article also appeared on

22 Responses to “Cisco's Latest Consumer Play: The Smart Grid”

  1. Jimmy Crackhorns

    The home of the future will require some kind of user interface…whether it’s the laptop or the set-top, both are already there and would require nothing more than app downloads and added input connections….I see no reason to add yet another device to consume power and manufacturing inputs. With LED and DC Current the primary use of electricity I am not sure why allmost all sockets in the house become CAT5 jacks. The TV, the Stereo, lighting, the PC or laptop or iPod and phone chargers….all use step down transformers.

  2. Celeste LeCompte

    Akash — You’re right that Linksys will play a big role in the home network for energy; Cisco’s confirmed that. But the set-top box could also provide an easy/useful tool in terms of giving consumers a way of viewing and managing their energy use data on a device they already own (their TV), especially if Cisco is turning its home router products into a tool for managing IP-addressable energy devices. Just because the MSOs are the big players in set-tops right now doesn’t mean Cisco couldn’t expand the utility of those devices down the road, right?

  3. […] This week, Cisco made its first official move into the smart grid space as a partner in the $200 million Energy Smart Miami project. While the smart grid, which some have called the “Internet of energy,” might seem like a perfect opportunity for the networking giant to court utilities’ needs, the announced project offers Cisco its best opportunity yet to leverage its recent acquisitions in the consumer space — by providing devices and networking that will help residential utility customers manage their energy…. […]
    Oops…forgot to say great post! Looking forward to your next one.

  4. Celeste, I don’t see too much synergy between STB acquisitions by Cisco and SmartGrid. Linksys devices for home networking will definately come in play but STB are closed devices, controlled by MSOs (cable guys).
    Cisco will definately puts its internet infrastrcutre experience to play in making smart grid truly and fully connected.