Best Communications Company You Don't Know?

SGN’s Vendor Watch articles evaluate leading Smart Grid suppliers, assessing their long-term prospects and viability.

If there's one thing holding back rapid deployment of the Smart Grid, it's the complexity and cost of communications. The complexity issue arises from the long list of competing technologies all claiming to be the best solution. It also stems from the growing realization that most utilities need a mix of communications types and, therefore, a system that can manage multiple pathways.

The cost issue comes from the fact that many utilities still think in terms of their own single-purpose, custom-built communications system.  Unfortunately rolling out communications to every customer premise is far too expensive to allow that luxury.  Instead, we need to find ways to build a single cost-shared communications infrastructure that serves many purposes.

Enter Tropos Networks, a Sunnyvale California company that claims it can build municipal-scale wireless networks capable of piggybacking many different applications, all at the same time. In other words, the same network can be used for public Internet access, and for police and fire, and for smart metering.

Current Status

Tropos is a venture-backed firm based in Silicon Valley and staffed by veterans of the telecommunications and networking industries. In recent years, it has found success building municipal WiFi networks for small to medium-sized cities.

First-generation citywide WiFi installations were plagued by financial problems. And, as the Wall Street Journal reported in December, by technical snafus as well: “Finding ways to overcome geographical and architectural barriers to signals has proved daunting in many cases.”

Tropos has developed a system that overcomes many of those hurdles. As a result, Tropos is gaining momentum in the municipal WiFi space. CEO Tom Ayers told SGN his company has worked with more than 500 cities in 40 different countries. Most of those cities use the network for Internet access or for governmental applications (emergency response, traffic, etc.)

Now Tropos wants to see more Smart Grid applications built for its networks. It is currently designing a prototype for Burbank, California, to model a citywide system for smart metering, distribution automation, substation automation, and plug-in hybrids.

Core Offerings

Tropos sells municipal-scale wireless broadband based on proprietary mesh networking technology. The product line includes:

• Routers of various flavors, including dual-band capabilities and versions for outdoor or indoor use
• A proprietary mesh network operating system
• Network management and testing tools

Tropos has built a network of value-added resellers who market applications built on top of the Tropos network. Examples include:

• Public broadband access
• Public safety
• Intelligent transportation systems
• Smart meters

Key Differentiators

Tropos claims the following advantages:

• Optimized for the difficult outdoor environment (hardened for temperature extremes and outdoor conditions)
• Proprietary algorithms for more reliable wide-area meshing
• Reliably manage 3,000 to 5,000 nodes (indoor systems typically top out at 300 to 500)
• Symmetric architecture uploads as fast as downloads
• Low backhaul requirements, significantly reducing overall costs
• Based largely on inexpensive COTS hardware
• Takes less than 5% of the total bandwidth to manage itself

In an indoor environment, a system merely needs to calculate the shortest hop to the next node.  It's not that easy in an outdoor, wide-area setting.  According to Ayers, factors such as foliage, topography, and sunspots make it impossible to predict the best path.  For this reason, Tropos doesn't try to predict, nor does it take the shortest hop approach.  It literally measures the ideal path for each packet before sending it on its way.

Strengths

Tropos has several advantages, including 14 patents with another 50 in the process. I also like its go-to-market strategy. It partners with firms to provide the underlying networking technology.  Those firms then add value to the Tropos network via installation, maintenance, and applications. Many of the firms resell Tropos technology under their own brand. It is already building partnerships with key players, notably Honeywell and Johnson Controls in the building automation space, and Itron in the metering sector.

Challenges

Like all technology firms, Tropos runs the risk of obsolescence.  Although Tropos seems to have an edge over today’s 3G cellular architectures, it could be displaced by future 4G approaches, by future versions of WiMax, or by some breakthrough that is sitting on a lab bench somewhere right now.

The company's competition comes in large part from WiFi providers with an indoor orientation, including giants such as Cisco. They may not have Tropos’s experience in outdoor environments, but they do have big budgets and brand recognition. Never underestimate the ability of a mediocre solution with great marketing to overcome a superior solution that is underfunded.  (Can you say Microsoft?)

Tropos lacks experience with Smart Grid applications, and visibility with Smart Grid buyers. Tropos's decision to sell through partners insulates it somewhat from the challenge of selling to utilities –but not from the challenges of fine-tuning its technology for utility needs and utility psychology.

For instance, many utilities have concerns about sharing a communications network. They want the quality-of-service guarantees, and the ability to take priority in the event of an outage or emergency.  CEO Tom Ayers has answers for this, but I suspect most utilities will want to see on-the-ground pilots and real-world proof.

Tropos’s value proposition makes sense when costs are spread over many applications. That model works best in a municipal setting, where a single city government can mandate collaboration. But municipal utilities serve only a fraction of the nation’s electric customers. Getting a large investor-owned utility to pay for part of a municipal WiFi network somewhere in its service territory may prove problematic.

Opportunities

Tropos’s core business opportunity is to widely establish its base technology, and then come back year after year with new applications to layer on top.  In addition to the applications mentioned already, tremendous potential exists for such things as:

• Video surveillance
• Mobile video for police and fire
• Telemedicine
• Military bases
• Streaming video to and from consumers

As we enter the iPhone era, it's clear that the world will soon be populated with tens of millions of mobile computers, all demanding bandwidth wherever and whenever they go.  "The iPhone changes the game," says Ayers.  "It is so much more than voice."

Tropos seems well on the way to becoming one of the go-to providers of wireless broadband.

   MuniWireless article on Rock Hill, SC and its use of shared WiFi for AMI