The U.S. WiMAX Smart Grid: Cisco Backs Grid Net, Michigan Pilot

Wow, a smart grid powered by the wireless standard WiMAX has made major strides in the U.S. this week. First General Electric, which makes smart meters, announced this morning that it would work on one of the first smart grid pilot programs based on WiMAX in the U.S. with Michigan utility Consumers Energy. At the same time, WiMAX smart meter startup Grid Net announced that networking giant Cisco has taken an equity investment in the company.

WTF is WiMAX? It’s a high-speed wireless technology that service providers are using for the next generation of broadband services. It competes with a high-speed wireless technology being deployed by cell phone companies called Long Term Evolution, or LTE. The benefits of WiMAX for the smart grid are that it can provide a lot of bandwidth for applications like mobile workforce and can potentially be really cheap in the future because it’s an open standard and has a growing ecosystem of large manufacturing partners including GE, Motorola (MOT) and Intel.

Four-year-old smart meter software maker Grid Net has been one of the chief proponents of a WiMAX smart grid, and the company tells us it has been working on the Michigan pilot with GE and Consumers Energy for some time. We should probably get ready to see more of these utility deals from Grid Net. Last week Grid Net brought on a high profile hire: Former Austin Energy CIO Andres Carvallo, architect of one of the first smart grids in the U.S. and the man who says he coined the term “the smart grid” itself.

The news that Grid Net has received an equity stake from Cisco, changes the landscape of the smart grid infrastructure players. Cisco moved into the smart grid networking infrastructure market last year and at the time CEO John Chambers told the Wall Street Journal that the company had an unlimited budget for smart grid initiatives.

But it has been unclear exactly what Cisco would be selling for the smart grid — at the GreenBeat conference last year Cisco’s Senior Vice President of the Smart Grid, Laura Ipsen, said that Cisco planned to launch some products directly in the smart grid market early this year. However, Ipsen acknowledged at that point at the end of 2009 Cisco was “zero for zero” in terms of smart grid products and revenue. (Laura Ipsen will be speaking at our Green:Net conference on April 29)

Cisco’s investment in Grid Net gives it another tool in its arsenal as a way into the smart grid network market. It’s interesting that Cisco has seemed to move away from WiMAX in other parts of its business, confirming with reporters earlier this month that it would quit the WiMAX radio access network business and would no longer make WiMAX base stations, but would still sell WiMAX edge products like Wi-Fi and femtocells to WiMax customers.

The company that could be the most affected by the Cisco/Grid Net move is smart grid infrastructure player Silver Spring Networks. As the first to move into the smart grid networking space Silver Spring has been dominating the market, snagging utility deals and planning on an IPO this year. Cisco has been one of Silver Spring’s chief rivals, despite the fact that Cisco has been a sleeping giant in this market.

There’s a long history between Grid Net and Silver Spring. As I explained in this early post on Grid Net, Grid Net’s founder and CEO Ray Bell was a former Cisco networking exec, an entrepreneur-in-residence at Foundation Capital, and became Silver Spring Networks CEO in 2003. Bell hired current Silver Spring CEO Scott Lang, but then left Silver Spring in 2005 over what he told me was “a different strategic opinion for how the smart grid should evolve.”

Grid Net has been on a tear as of late and the WiMAX smart grid seem as close to reality as ever. Last week the Federal Communications Commission announced recommendations to Congress, which included that the smart grid should embrace commercial networks and broadband, and be able to provide real-time energy data to consumers.

For more related research on GigaOM Pro check out (subscription required):

New Opportunities in the Smart Grid

The Developer’s Guide to Home Energy Management Apps

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