Cisco Buys Up Arch Rock for the Smart Grid

Cisco’s (s csco) smart grid assault continues. This morning, the networking giant announced that it plans to acquire Arch Rock, a startup which has been selling wireless network products for data centers and buildings for years. In June, Arch Rock announced its first smart grid wireless network product based completely on open standards. Terms of the deal were not disclosed, but Cisco said Arch Rock’s technology will be used for its smart grid offering.

Cisco’s acquisition announcement today comes after it said yesterday that it has teamed up with smart meter heavyweight Itron (s ITRI) to develop a reference design for smart grid network architecture, and several months after it launched a home energy management product, a hosted residential demand response-type service and upgrades to its building automation programs. In May, Cisco launched its first smart grid product, which was basically hardened networking gear for utility substations.

With the acquisition of Arch Rock, Cisco will now own a wireless mesh network technology product that can connect smart meters to utilities’ control stations and could link up to its other building automation services, its box for home energy management and its smart grid substation gear.

While Cisco only entered the smart grid market a few months ago, the company has been signaling its entrance into the market for some time. Cisco CEO John Chambers has said that the company has an ”unlimited” budget for the smart grid, and Cisco Senior VP of Smart Grid Laura Ipsen told us she sees a $20 billion opportunity in the smart grid.

Arch Rock’s network product, dubbed “PhyNet-Grid,” has been designed to connect smart meters to the utility back office using wireless mesh technology — an architecture where each node can act independently and is self-healing — and is based on the wireless standard created by the Institute of Electrical and Electronics Engineers (IEEE) called “802.15.4g.” Arch Rock CEO Roland told me that the gear — which it was targeting to third-party manufacturers first, not directly to utilities — was the first that was based “from top to bottom on open standards.”

Of course, Cisco, with its Internet infrastructure background, has been basing its smart grid network technologies around Internet Protocol and open standards, too. Other potential competitors have as well, like Silver Spring Networks, which was actually called “the Cisco of the smart grid” before Cisco entered the scene.

I’m expecting to see more small acquisitions like this one as Cisco tries to figure out its smart grid strategy and looks to offer real products to utilities. To date, a lot of the products that Cisco has announced — like its reference design plan with Itron — aren’t market-ready. Earlier this year, Cisco announced an investment in Grid Net, which makes smart meter software and started out with an emphasis on the wireless standard WiMAX.

Cisco’s Ipsen told us in April that Cisco has been “looking across the landscape, from (electricity) generation to consumption,” for potential acquisitions in the smart grid, and that Cisco could acquire into “spaces where our customers from an architecture approach are looking for technology.” She said while there’s a lot of play in smart meters right now, Cisco also thinks “distribution automation” — networking of the power grid at the level where electricity is distributed, in contrast to the building level — is a hot area.

For more research on the smart grid check out GigaOM Pro (subscription required):

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