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By Jesse Berst

 

It's smart to stick to your core competencies, and Cisco has decided to do just that in the smart grid. While emphasizing its continued commitment to the sector overall, the firm has decided to back away from building energy management, both at the residential and the commercial levels. I see it as a smart move, one that will let it put more effort into security and network management for the smart grid, places where it can add great value. (Cisco smart grid chief Laura Ipsen blogs about the decision here.)

 

Earlier this year, both Microsoft and Google exited the residential space, which is overcrowded with dozens of me-too products aiming at the same tiny market. (Tiny today. It will be big in another 10 years.) The commercial space is where the money is at in the short term. But that market is dominated by giant building controls companies such as Johnson Controls and Schneider, which have deep and long relationships with customers, as discussed recently in our article explaining why building automation is both a threat and an opportunity for utilities.

 

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

 

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Cisco, Microsoft and Google - on target

Cisco's move out of building energy management makes perfect sense, just as did Microsoft's and Google's moves out of home energy management. These are all terrific companies that dominate their space, but networking, PC software, and search are not energy management. Right now, there's a vacuum in the area of home energy management, with companies like Ecofactor, Tendril, and Control4 starting to take significant steps. Consumers still see their electric utility as the natural energy advisor, so expect to see a lot of innovation from utilities - including via partnering with these three innovators and others. Westar, Bluebonnet, Reliant, and - perhaps surprisingly - PG&E have some of the best innovations. Among them, they offer engaging websites, weekly emails of usage data, bill-to-date and month-end bill estimates, and alerts for price changes (going from one tier to the next).

Chris King - 08/12/2011 - 08:12

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