Marie Hattar, vice president of marketing in Cisco’s Network Systems Solutions group in an interview with LaMonica of CNet stated “Our expectation is that this network will be 100 or 1,000 times larger than the Internet. If you think about it, some homes have Internet access, but some don’t. Everyone has electricity access–all of those homes could potentially be connected.”
This is quite a large helping of hyperbole, possibly the product of an unguarded moment of enthusiasm, but it makes a good headline. Kidding aside the Smart Grid is going to be big business for technology companies. In the same interview Hattar said that Cisco believes that just the communications portion of the Smart Grid represents a $100 billion opportunity — “$20 billion a year over the next five years.” Note that this figure is focused only on the communications portion of the projected business for the Smart Grid over the next five years and does not include all the other large capital outlays for physical power grid projects and other capital equipment such as new high voltage transmission lines and so forth.
Although certainly a large figure this is not an unreasonable one considering how much work needs to be done to upgrade the national grid and how slowly utilities and power companies have moved to upgrade their power grids, communications and data networks. In fact, the business culture that prevails in utility and power companies is generally quite conservative wedded as it is to very large and very long term capital and business cycles, unlike the fast and furious pace that is common in the technology sector. However these very large companies are increasingly recognizing that they need to make the large capital outlays to upgrade their increasingly outdated and antiquated grids in order to increase reliability, efficiency and the ability to handle the variable power supplies from renewable sources such as wind and solar.
The Keystone of the Smart Grid is Real-Time Information and Making Good Use of It
Providing real-time information and the data processing, data mining and decision making software to consume that stream of raw data is perhaps the single most important aspect of the emerging Smart Grid. This parallel information network that is being built on top of the existing energy distribution network is what will enable nascent technologies such as smart appliances, home energy management systems and grid wide.
Big established technology companies such as Microsoft, IBM, Google, Cisco Systems and Intel are moving into this space and competing with the up and coming startups such as Silver Spring and others that previously had the playing field left mostly to themselves. All of these players have their eyes on getting a slice of the market for end-to-end communications networking, data gathering, mining and decision making that is needed by the Smart Grid.
The deals are starting to happen and they are starting to become bigger in size. For example Cisco and Duke Energy recently announced a one billion dollar deal in which Cisco will help Duke Energy build out its Smart Grid infrastructure helping to enable it to handle the massive and highly networked environment that is being created by the rollout of millions of smart meters to its customers and the networking of Smart Appliances that is expected to soon follow.
© 2009, Chris de Morsella. All rights reserved. Do not republish.