Get Smart: Cisco Energy Offensive Continues With Acquisition


Cisco on Thursday said it will acquire San Francisco-based Arch Rock Corp., a privately-held maker of IP-based wireless network technology for smart-grid applications.

The acquisition comes on the heels of Cisco's just-announced strategic alliance with power metering vendor Itron, furthering the networking titan's investment into the market for smart grid infrastructure and energy services.

Financial terms of the deal were not disclosed. Cisco expects the acquisition to be completed by the end of calendar 2010, and Arch Rock's team will become part of Cisco's Smart Grid business unit.

Laura Ipsen, senior vice president and general manager of Cisco's Smart Grid business unit, said the acquisition further expands what Cisco can do to help utilities manage, improve and optimize how energy is delivered by utility companies.

"Cisco's solutions, incorporating the Arch Rock technology, will help enable a more efficient and sustainable energy future that is based on an open, highly secure and reliable smart-grid infrastructure," Ipsen said in a statement.

Founded in 2005, Arch Rock is self-described as "a pioneer in IP-based wireless sensor network technology." The company's platform, PhyNet, is used for building IP- and web-enabled devices out of wireless sensing and metering points. Among its various offerings are Energy Optimizer, an energy analysis tool sold to end users and used to gauge energy resource use in buildings and data centers, and its PhyNet-Grid, an OEM platform for the creation of wireless mesh products used in energy metering, which it launched in June.

It's another smart grid market play for Cisco, which on Wednesday announced a strategic alliance with Itron, through which it will develop IP technology products and a platform for smart energy grids.

Cisco Chairman and CEO John Chambers has previously described the smart grid market as a potentially $20 billion-a-year opportunity, and Cisco executives see a broad opportunity for solution providers -- especially software developers and integrators -- in the emerging smart grid ecosystem.

The Arch Rock acquisition is Cisco's fourth in 2010, continuing a string of acquisitions for the vendor that's gone largely unabated since 1993. Smart grid is one of the more than 30 market "adjacencies" where Cisco has declared its intent to pursue opportunity; the company in March bought a $10 million stake in Grid Net, the WiMAX energy grid specialist.

Cisco acquisition rumors have become something of a sport for analysts and Silicon Valley observers alike. Earlier this week, TechCrunch and The New York Post separately reported, using anonymous sources, that Cisco has made a bid for popular VoIP software service Skype.