Verizon Still Eying Energy Management, Slowly


Last year a spokesperson for telco Verizon (s VZ) told a reporter that the company was looking to launch energy management services by the end of 2009 or the beginning of 2010. Well, the ball dropped and ushered in 2010 and nada. Now CNET is reporting that Verizon wants to launch energy management services later this year.

I would be surprised if Verizon makes that date, too, but if it does it would do a tremendous amount to boost the fledgling energy management industry. Here’s what you’ve got to remember about telcos and cable operators. The massive companies investigate a lot of projects and spend months and years sussing out the market to see if their experiments will have legs. If the service providers do actually launch the product, they usually do so in a very specific, small test market to see how customers will react. Even if a product launches in one market, it may never move out of the trial phase.

So if Verizon does launch energy management this year, I’d expect an isolated, small trial in an early-adopter market. At the same time the energy management service will likely be just one part of a much broader home automation system that the telcos have been talking about for years via their fiber services.

CNET reports that Verizon’s service would piggyback an existing home network and broadband connection, and that Verizon plans to use the cloud to deliver the services so they can be accessible from multiple screens. Verizon spokesperson Jim Smith tells CNET: “As for the business model, we see home services as a fourth leg on the stool, joining phone, Internet, and entertainment as another essential, not a bolt-on.”

The motivation behind a broadband service provider like Verizon launching an energy management service is that a broadband company could differentiate themselves and win over new customers with energy tools (reducing that nasty thing called customer “churn“). At the same time third party energy management startups could offer services to the network providers and potentially move into the market much more quickly than via other avenues like through utilities or directly to the consumer.

EcoFactor, a 3-year-old startup that has developed smart algorithms to control thermostats and shave off power from heating and cooling homes, told me last November that it would soon announce partnerships with some broadband service providers. iControl, a 5-year-old company that sells a home energy management product, is backed by cable operator Comcast.

When I talked to Pike Research analyst Clint Wheelock a few months ago about how long he thought it would take telcos and cable companies to get into energy, he told me that while his research indicates that several big players are looking to make investments, or a direct play, in this area, broadband service firms are still moving tentatively. “My impression is that the cable companies and telcos smell opportunity in this space, but most have yet to settle on a strategy…I haven’t seen any indication that the plans are finalized yet.”

To read my full article on how Broadband Service Providers Are About to Ride the Energy Wave, check out GigaOM Pro (subscription required).

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