Cisco (s CSCO) sees a $20 billion opportunity in the smart grid, and while it may have gotten off a bit late to the party, it’s crashed it in a big way. The networking giant wants to deliver products and services that span the grid, from home and business energy management to a secure, IP-based network to control substations and distributed energy resources.
Cisco is working with big utilities like Duke Energy, Florida Power & Light, Germany’s Yellostrom, and Canada’s Enmax, and its vendor partners include General Electric (s GE), Accenture (s ACN), Oracle (s ORCL), Arcadian Networks, Itron (s ITRI), Landis+Gyr, Siemens (s SI), Schneider Electric and Verizon (s VZ). It also has its EnergyWise platform for controlling building and data center energy use, which could tie into smart grid networks in the future. CEO John Chambers has described the IT giant’s budget for smart grid as ”unlimited.”
Laura Ipsen, Cisco’s senior vice president of smart grid, will explain the company’s standpoint to you at our Green:Net conference on April 29. We spoke to Ipsen last week to see where Cisco stands in its smart grid ambitions, and what to expect in the coming year.
Q). Cisco said it planned to bring smart grid devices to market early this year, but we haven’t seen much yet. What can we expect from Cisco, and when, in terms of announcements across its smart grid target areas?
A). We’re pretty excited about how we’re going after this market. We have a build-buy-partner model, and I think you’ll see some things soon. We have an engineering team coming out with product you’ll see coming out in late summer or early fall that we’re testing with customers now.
The one thing we know about utilities is that planning and framework and testing and piloting are pretty important in advance of deployment. If you look across the country, the horizons on smart grid range from things that will happen in the next two to three years, all the way to 10 to 20 years to full deployment.
Q). EnergyWise, Cisco’s new building energy management system, could be linked with smart grid systems. When will the two be connected?
A). EnergyWise is software we have in our switching equipment. When we launched it, it had open APIs and we want everyone to develop around that. We have some strategic partnerships with IBM (s IBM) and Tivoli, because we feel this is software we can leverage across multiple areas of IT, and ultimately non-IT, we’d like everyone to leverage EnergyWise, to build to it, whether you’re a partner or a competitor — Eventually going all the way to data centers. The utilities are getting ready to mange a lot more data flow than they’ve handled in the past, ultimately 10 to 20-fold from the past.
Q). What new developments are underway with your “Smart Grid Ecosystem” partners, whether in on-the-ground projects or in development?
A). The ecosystem was really an opportunity we have to say, let’s get on the same page and look at this market, and the importance of all the variety of partnerships we included was all about working on interoperability, IP and being open. We’re tackling some tough issues about intellectual property or security.
We do believe there are some areas of the ecosystem we’d like to add that are important to the future of smart grid. It probably includes adding some expertise on security – we have our experts, but we’d like to work with others in security as well.
Q). Cisco recently invested in Grid Net, a startup specializing in WiMAX. At the same time, Cisco has recently said it will quit the WiMAX radio access network business and will cease making WiMAX base stations. How do these two moves compute?
A). I don’t think that Cisco is turning our back on WiMAX. I think in the future we’ll still work towards WiMAX, but it will be through partners and licenses. It’s a very compelling technology in many parts of the world.
With Grid Net, what we find very interesting is their platform approach and how they’re driving IP, With the greater abilities of bandwidth at their head end system, we think it provides a very robust platform. It’s very interesting from where we see the future going, an IP-based and open approach. We’ve made a decision to invest and will make a decision on how we’ll work with them in the future.
Q). What other investments might Cisco be planning in the smart grid space?
A). We’re looking across the landscape, from (electricity) generation to consumption. I think you’ll see us make additional investments whether it’s an investment like Grid Net, or in the acquisition space. First and foremost, in spaces where our customers from an architecture approach are looking for technology. We will either build it, accelerate it through partnerships, or acquire it.
There’s a lot of play in AMI (smart meters) right now. But as utilities scale and as intelligence permeates the utility, we think that distributed intelligence need to be there to support a truly smart grid. We hear from all the utilities, AMI and metering is not a smart grid, it’s a starting point. Now utilities are asking, what kinds of networks do we need to create a truly smart grid, with a lot of focus on distributions automation.