The insider's guide to the modernization and automation of electric power
Cisco Certifies Smart Grid as the Next Big Thing
By Jesse Berst
May 17, 2009 - 2:02:24 PM
Today, one of the biggest players in communications, Cisco Systems, has announced an ambitious plan to position itself as the centerpiece of the Smart Grid. The company briefed SGN in advance of its announcement. SGN Founding Editor Jesse Berst analyzes what Cisco is planning and what it means for other players.
Telecom powerhouse Cisco Systems has staked its claim on the Smart Grid, and, trite as it may sound, the world may never be the same. I’ll outline what Cisco is proposing, consider the implications for the electricity industry as a whole, and conclude by identifying who stands to lose from Cisco’s plans.
From Generation to Home and Everything in Between
Cisco Systems, the San Jose-based networking and communications giant, today revealed that it intends to provide “an end-to-end, highly secure network infrastructure solution” for the Smart Grid and everything it touches.
Cisco’s strategy is to ensure that there is one, consistent, IP-based infrastructure for the electric power industry – a standards-based foundation that will ultimately be able to connect any device to any other anywhere at anytime. In other words, an Internet for electricity. Cisco will provide some of the hardware, most of the networking software, and a few of the applications that run on top. It will turn to partners for the rest. Since Cisco intends to build on open standards, both vendors and customers will be free to build their own applications, just as they do today over the Internet.
The Cisco Approach
Cisco’s constellation of Smart Grid solutions consists of four parts: T&D automation, security, smart meter and endpoint communication, and business and home energy management.
Why Go Public Now?
In her briefing to SGN, Cisco VP of Network Systems and Security Marie Hattar identified utilities as the primary customer for the company’s Smart Grid solutions. A widely reported example is Cisco’s involvement with Florida Power & Light’s ambitious “Energy Smart Miami” project (see SGN News Roundup for April 21). Those utilities want Cisco to lay out its future vision to inform their own long-range planning.
As the company that gave us the tools for keeping hundreds of millions of people online at once, Cisco has the experiences and the resources to repeat that success in the Smart Grid world. Indeed, Cisco is promoting their Smart Grid role with an Internet analogy. “It’s like building an Internet in the electrical system,” says Hattar. “We’ve been clear leaders in Internet and will do the same for Smart Grid.” In the long run, Hattar expects Cisco’s Smart Grid business to eclipse the company’s Internet services in number of access points, since more people are tied to the electric power network than to the Internet.
And let’s not forget that Cisco has also built very strong businesses in the telecomm and cable industries as well. It has lots of practice remaking networks.
The entrance of Cisco, with its broad and ambitious vision, entering the Smart Grid space has several far-reaching possibilities:
Winners and Losers
Cisco is exceptionally skilled at working with and manipulating the standards process. In the cable world, Cisco worked with partners to help establish the DOCSIS standard for carrying data over cable lines. The move greatly benefitted Cisco, while companies that waited too long to get onboard went out of business. The same thing could happen to manufacturers of smart meters, substation equipment, and intelligent electronic devices. Although Cisco’s announcement specifically includes plans for legacy protocol translation, it’s unwise to bank on Cisco maintaining those indefinitely.
The message for vendors is clear: Engineer your equipment to work over IP or risk being shut out of Smart Grid communications. Similarly, utilities need to plan for an IP-based infrastructure. Any company who does not follow Cisco’s lead in communications protocols is putting their financial health at risk.
In addition, the list of losers could also include the following:
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