The second largest defense contractor Boeing was one of the few tech providers and the only defense firm that won grants in the $620 million round of smart grid stimulus funds announced yesterday (most of the winners, like in the $3.4 billion round of funding announced back in October, were utilities). So what is Boeing’s strategy for the next-generation of digital technology for the power grid?: Use its defense background to move into network security for the smart grid, while its bread and butter defense business faces budget cuts.
Yesterday the Department of Energy awarded Boeing $8.56 million (for a project valued at $17.17 million) to “demonstrate an advanced software technology with military-grade cybersecurity,” for optimizing transmission system operation. In a list of adjectives describing Boeing’s smart grid technology, the DOE put “cybersecure,” as the first term. Boeing has also been working with New York utility Con Edison, which won $45.39 million from the stimulus package yesterday for a demo project that will build a “secure interoperable open smart grid demonstration in New York and New Jersey.”
According to Boeing’s defense chief Dennis Muilenburg quoted in Bloomberg last month, Boeing is looking to reposition its business and “One idea is to take some of our defense technology and use it to help solve problems in the energy sector.” The plan is to use its network technology from its missile-defense program and the Army’s Future Combat Systems to “add a certain level of intelligence to the grid and allow efficiency and reliability improvements” for utilities, Muilenburg told Bloomberg.
The suddenly booming smart grid market, must look pretty good in the face of cuts and budget shortfalls in the defense industry. The most recent Pentagon spending plan saw a meaty contract of Boeing’s broken into several pieces, and a anti-missile program cut dramatically, while Boeing lost several parts of the U.S. Future Combat System project to other contractors, points out Bloomberg. However moving into the smart grid networking and software industry puts Boeing in competition with the likes of infotech heavyweights like Cisco, IBM and Accenture — companies which have much larger portfolios and longer histories in software and networking products.
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