Cisco Rethinking Energy Market Strategy


It was a blink-and-you-missed it comment made during Cisco's fiscal fourth quarter earnings call, but there it was: Cisco is de-emphasizing its investment in the energy management market.

Gary Moore, Cisco's executive vice president and COO, said during the call that Cisco is rethinking its strategy around energy management devices and also its Network Building Mediator product, which addresses utility usage in buildings.

"We communicated this week the decision to adjust our investments in our energy business to match the needs of the market by focusing on energy management through standards-based solutions and will no longer be investing in premise energy management devices," Moore said during the call. "As part of these efforts, we're exploring options for our Network Building Mediator and Mediator Manager product line."

Moore's statements followed reports earlier this month suggesting Cisco was backing off of its building management initiative entirely, and that the futures of the Network Building Mediator products were uncertain.

The energy market has previously been a key "adjacency" for Cisco, but Cisco has changed a lot of the rhetoric around its so-called "30 adjacencies" as the company restructures and looks to refocus on core technology markets.

There's more evidence of changes to Cisco's energy strategy. Cisco, for example, confirmed to CRN and other outlets that Ed Richards, a former director of worldwide business development, had taken Cisco's early retirement package. It was Richards' company, Richards-Zeta, that Cisco bought in 2009 to spearhead its building management market presence.

Cisco also discussed its changing strategy in a post written by Laura Ipsen, senior vice president and general manager of Cisco's Connected Energy Group, and posted to Cisco's Platform corporate blog late Wednesday.

"As with every business, we must be vigilant in applying lessons learned and willing to adapt our strategy to evolving conditions be they economic, technological or policy-related," Ipsen wrote. "So after several customer pilots, we are refining our strategy so we can most effectively apply our experience and expertise in IP-based communications to the electric, gas and water networks globally."

Ipsen also said that Cisco is still deciding what to do next with its Mediator and Mediator Manager products, echoing Moore's comments on the earnings call.

"We are actively pursuing several strategic options for Cisco's Network Building Mediator and Mediator Manager product line, with an emphasis on minimizing the impact on current customers, partners and employees." Ipsen wrote. "For energy management in the home, we will transition our focus from creating premise energy management devices to using the network as the platform for supporting innovative applications and architectures that will improve our customers' value proposition in the consumer energy management market."

NEXT: Cisco's Role In The Smart Grid Ecosystem