Cisco Rethinking Energy Market Strategy

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In recent years, Cisco Chairman and CEO John Chambers has described smart grid as a potentially $20 billion-a-year-business.The smart grid energy market overall has been eyed for some years by vendors and solution providers alike as a potential golden opportunity for IT investment. In a 2010 study by ABI Research, global investment in smart grids and smart metering technology was pegged at about $45 billion by 2015.

Cisco's changing energy strategy comes as some of the industry's best known vendors rethink their own moves specific to the market. Microsoft, for example, is in the process of closing down Hohm, its energy management service. Google is also shuttering its home energy monitoring service, PowerMeter, later this year.

Meanwhile, IBM acquired building management software specialist Tririga in March, joining companies like Honeywell (buying Akuacom and E-Mon), Schneider Electric (Vizelia and D5X) and Siemens (SureGrid) that have bought building management-centric assets in the past 18 months.

There are also a number of companies like Redwood Systems that focus specifically on the building management market and offer installation and integration opportunities through channel partners.

Cisco made several moves in 2010 focused on the market segment, including its September 2010 acquisition of Arch Rock, a maker of IP-based wireless network technology for smart grid applications, and its strategic alliance with power metering vendor Itron, announced that same month.

The greater role for channel partners in the segment remains vaguely defined. In an interview with CRN last fall, Paul DeMartini, vice president and CTO of Cisco's Smart Grid team, said the opportunity is nascent.

"From my own experience, there's an enormous amount of money and effort and basically mindshare being spent on getting the basic systems working," DeMartini said. "Moving to a standards-based platform, there's much more attention and energy that can be focused on getting solutions integrators to create business value for these customers."

In her Wednesday blog post, Cisco's Ipsen said Cisco will remain focused on the segment.

"Our commitment to the industry remains strong and our vision for energy management and Smart Grid has not changed -- to transform energy production, distribution, consumption and management using an end-to-end IP platform," Ipsen wrote.

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