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. By Jesse Berst
The largest category of all, a full 50% of the market, was smart sensors and devices, predicted to hit $85.5 billion. (IT hardware and software was the fourth and final category at $39.4 billion).
Smart sensors and devices will be worth far more than meters and communications combined.
Pundits proclaim that we are moving to the machine-to-machine (M2M) age, also called the "Internet of things." And the grid is going to have a lot of things. In fact, it's likely to be the most heavily instrumented network of all. Unlike other digital networks -- telecommunications, cable, satellite TV – the smart grid has to deal with the physics of delivering electric power and the real-time realities of balancing supply with demand.
Bottom line: We're going to need a lot of sensors and monitors. And somebody is going to make billions selling them.
I first signaled this trend to you last fall in my smart grid trend alert on NXP's chipset with a built-in metrology engine for measuring voltage, current, etc.
This enormous market is currently very fragmented, but I want to call your attention to three companies you may not know yet. They are taking three different approaches to creating value from the coming sensors-and-devices gold rush. Click the company's name to jump to its website if you'd like to learn more.
Embedded hardware linking to cloud software
This Palo Alto California-based startup provides hardware (and software) to electronic device manufacturers. It competes with NXP to some degree, although it takes a much different approach.
People Power sells chips to the manufacturers of consumer electronics. Once a manufacturer embeds the People Power chipset, its products gain real-time energy monitoring and control. People Power also has a cloud-based "energy services platform" that turns that data into useful information while actively engaging with customers (via competitions, comparisons and energy management tools).
Home energy management competitors are trying a variety of ways to get the upper hand. People Power's secret sauce is to quietly become the default energy management chipset inside millions of consumer devices. Although the company uses phrases such as "open source" in its marketing, for practical purposes manufacturers will be locked into People Power's proprietary network and software.
Thousands of electronics companies are seeking to make their devices energy aware. Most of them don't want to develop their own chips, networks and software. Many of them may choose to use People Power's products instead. If they do, People Power could show up to the home energy mêlée with millions of devices already talking its language and already connected to its cloud-based software.
Monitoring critical grid equipment
The health of equipment such as transformers is critical to the health of the grid. Santa Clara, California-based LumaSense -- a global leader in temperature and gas sensing for several different sectors -- is now turning more and more of its attention to the smart grid. It manufactures sensors that other manufacturers can install in their devices. And it sells equipment directly to end users.
Only five years old, LumaSense was conceived from the beginning to grow by buying up smaller companies and building them into a group with global reach. “There’s a vast, what I call, a cloud of dust — $5 million to $15 million companies, many of them with fabulous technology, great products, but which don’t scale globally for a number of reasons," CEO Vivek Joshi told the Silicon Valley / San Jose Business Journal in November.
Now that LumaSense is building a strong name in transformer monitoring, its next step is to expand the devices it can monitor. Ultimately, the company wants to be able to scan the entire substation. Meanwhile, it is also expanding its software efforts. It wants to help customers convert all that data from its sensors into useful information. And to collaborate with the asset management software that is now starting to proliferate at cutting-edge utilities.
Software to manage devices
Dhyan Infotech doesn't want to build devices. Or chips that go into someone else's devices. It wants to monitor and manage all those devices. And when I say "all" I literally mean that the company has ambitions of a device management platform that will span the entire value chain, from generation to transmission to distribution to meters and right on down into the customer premise.
The firm is headquartered in Fremont, California and has a development center in India. Its Dhyan Smart Grid Management System is scalable network management software to manage many types of equipment – routers, meters, substation IEDs, even home devices. The word "manage" embraces the full life cycle, from deployment (to help with the rollout), to managing and maintenance, to tracking defects, even to managing upgrade.
The firm typically "white labels" its software to meter makers and others so they can in turn offer a complete solution to the customer. For instance, its software has been deployed by Echelon as part of its smart meter pilot with Duke. If that pilot goes to full deployment, the Dhyan software will ultimately be managing more than 5 million meters.
Soon, we'll have tens of millions of smart, energy aware devices attached to the grid. They represent a major new challenge for utilities that will need to manage all of those devices and all the data they create. And a major new global profit opportunity for the suppliers who serve those utilities.
Are you seeing this trend yet in your own utility? Have you bumped into other interesting young companies that illustrate this trend? Use the comment form below to share with your colleagues.
Jesse Berst is founding editor and chief analyst of Smart Grid News.
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SGN Discovery Showcase: Is IDROP the forgotten engine for next-generation demand response?
Smart grid trend alert: Smart appliances will soon proliferate
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