Networking giant Cisco and smart meter leader Itron have joined forces to deliver an IP-based communications platform to the smart grid market, but the announcement is light on details, such as when the companies will deliver on their promises.
The two companies want to create a “definitive” platform that defines a standard for smart grids, a catch-all term for energy-transmission networks which are more efficient, interconnected, and intelligent. The market for smart-grid infrastructure is projected to reach $200 billion by 2015. That projected spending boom is held back by the fact that there are virtually no standards at present in this industry: Smart-grid communications vendors use a variety of networks, often proprietary, to collect and send data, making it difficult to guarantee robust security and interoperablility.
Having more interoperability between networks also could reduce costs for companies because vendors would then have to all plug into the same system, forcing them to compete more with each other.
Itron will license and embed Cisco IP technology in its meters and also distribute their software and equipment. But at least one analyst is scratching his head over what this announcement means. Bob Gohn of Pike Research said the companies essentially promised to deliver “a platform … someday.”
Though the “smart grids need standards” argument is something of an old canard, Gohn said the Cisco-Itron collaboration is still important: “A committment by arguably the top metering vendor to deliver a secure, open, interoperable program with a top networking vendor is kind of a big deal.”
“For Itron, this builds their IP street cred. For Cisco, it gives them a channel to proliferate some of their special sauce that goes into IP that goes into millions of meters that are being deployed out there,” Gohn added.
It’s also something that utility companies have been clamoring for.
“If they’re going to spend money and install the smart grid system and it’s going to communicate with their software and all the stuff they have on the backend, they want to make sure 20, 30 years down the line, their software systems can still talk to all these meters,” said Jacob Grose, senior analyst for Lux Research.
There’s no definite date on when the market would see this platform, though — in a press conference earlier today, representatives were tight-lipped on their timeline. And overall, Grose said the announcement isn’t significant since the two companies don’t have an exclusive agreement – Cisco will be able to shop the product around to other smart grid networking companies.