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Cisco buys into WiMax for Smart Grid, acquires stake in Grid Net

Cisco Systems has been scouting for major plays in the Smart Grid infrastructure arena for about a year — some analysts even speculated that it would buy wireless networking provider Silver Spring Networks. But today, it announced its decision to go with Grid Net, one of the first and only companies to trumpet WiMAX as the ultimate solution for transmitting data between utilities and smart meters.

Most utilities and meter makers rely on cellular networks or proprietary broadband networks to get the job done, arguing that WiMAX is still too expensive for broad deployment. But Grid Net says price won’t be an issue for long. Not only does WiMAX offer higher speeds and more bandwidth, but it will be extremely cheap in the future because it’s an open standard, says Grid Net CEO Ray Bell.

So far, it’s unclear exactly what Cisco wants with the company’s WiMAX expertise. It’s made a lot of noise about being a major force in the Smart Grid market, appointing Laura Ipsen to head up a dedicated program, and announcing that it would dedicate unlimited budget to the cause.

But so far, the company has little to show for it. At VentureBeat’s GreenBeat conference in November, Ipsen said Cisco would be rolling out its first Smart Grid networking products in the first half of 2010, but this remains to be seen.

The deal makes sense, considering that Bell formerly worked on networking solutions at Cisco. One can assume that he giant will be integrating WiMAX into its own Smart Grid products when they do hit the market. Even being involved in WiMAX development puts Cisco on the cutting edge of the Smart Grid industry.

I reported yesterday on the scuffle between companies promoting public network communications (SmartSynch) and those endorsing private networks (Trilliant, Silver Spring). If WiMAX comes along as fast as Grid Net says it will, it could immediately trump both of those options.

Some Smart Grid players have dismissed WiMAX out of hand, but it looks like that’s the direction the whole industry might move. In addition to Cisco buying into WiMAX, General Electric also announced today that it’s launching its own Smart Grid pilot project that will test WiMAX in tandem with Consumers Energy, a utility based in Michigan.

This is also the second big recent win for Grid Net, which just snagged Austin Energy Chief Information Officer Andres Carvallo to sell the idea of WiMAX to utilities. Carvallo is credited with spearheading the country’s first Smart Grid deployment in Texas.