Silver Spring Networks strategy update: One platform to rule them all
By: SGN Staff
By Jesse Berst
Silver Spring Networks (SSN) was undeniably one of the most influential early smart grid companies. It helped transform the sector's approach to open standards, meter communications, utility sales, platforms, partner ecosystems and more.
Given SSN's penchant for blazing trails, it pays to keep a close eye on where the company is going next. With that in mind, I spent time with Anil Gadre, Executive Vice President of Products and Chief Marketing Officer. He tells a story that is both thrilling and terrifying.
Thrilling because companies like SSN are leading us into an amazing period when smart technologies will transform, not just utility backrooms, but everyday life for everyday citizens all over the world. Terrifying because utilities are going to be smack in the middle -- and some of them will get run over by these changes. Many utilities are not culturally set up to manage rapid changes like the ones discussed below. What's worse, many utilities are not allowed to radically transform because of regulatory restrictions.
But resolving the regulatory quandary is a topic for other articles, like the recent story on the 5 steps to get America the transmission it needs. The subject of this piece is what's coming from SSN and what it will mean to electric power utilities. Please use the Comment form to add your own insights to enhance and enlarge this picture of our joint future.
If you haven't paid attention to Silver Spring Networks (SSN) for a while, here are a few of its most important progress points. SSN has significantly:
Â· Strengthened its platform position with additional capabilities
Â· Strengthened its partner ecosystem with additional partners
Â· Expanded its product line, with notable additions in demand side management, distribution automation and smart street lighting
Â· Expanded its presence in the muni market (where the SSN street lighting story is a great entree)
Â· Evolved its core message
The evolving message
Over the years, SSN's position has grown from "the network for metering" to "the network for electric power" to "the network for energy" to "the network for everything" to "the platform for the everything network." To understand why, glance at the nearby chart, which the company often includes in its presentations to analysts. As you climb the chart, the addressable market goes from 10s of millions to billions. And that means SSN's potential revenues climb as well.
Silver Spring Networks now positions itself as a platform for the much larger "Internet of Everything" market.
In the early days, conversations with utilities were about building the business case for an AMI network. Now, says Gadre, "the conversations we have are all about how to deliver unexpected value from their original grid investments." Typically, that means layering on applications such as demand side management or distribution automation.
The surprising success of street lights
Of all SSN's new offerings, smart street lighting may be the most successful, at least in terms of pace. Smart streetlights have hit a tipping point due to the convergence of two trends. The first is LED streetlamps. By swapping in LEDs, cities can (according to SSN), save roughly 65% on energy costs and 90% on maintenance costs. The second is the ability to network the street lights so they can be managed remotely.
Since street lights typically blanket the entire city; and since they already have power; and since they already sit up high; they make an ideal place to create a "canopy network" for the entire city. Ideally, a city will be able to swap in the LEDs and add the communication module with a single truck roll. "Once you have that canopy network, a lot of things can get on to it," Gadre explains. "And a city network is not constrained by the regulations that restrict most AMI networks at utilities. It becomes a network for any smart infrastructure."
SSN finds itself at the cusp of an exciting growth phase, but also at the door of a new set of problems:
Successfully repositioning themselves. SSN has had a positioning problem for years. In early days it was often lumped with smart meter companies. In fact, it never made meters, it makes communications modules and networks that work with meters from many different manufacturers.
Yet even the "meter communications" label is terribly inadequate, since SSN goes far beyond metering and far beyond communications. Indeed, if you look at SSN's current lineup (including that provided by partners), it is beginning to challenge some of the Big Boys in the breadth of its offerings.
But the difficulty of positioning itself within the electric power sector pales in comparison to the problem of positioning itself as a smart city provider. Companies such as Cisco, IBM and Microsoft are spending tens of millions to raise their smart cities profile. It's hard for a smaller company to get noticed amidst all the noise. Perversely, SSN's success in the smart grid space may haunt it if it gets locked into that box. (And I'm not even including the challenge of repositioning itself with the financial analysts who influence its stock price, some of whom prefer companies with a narrow focus.)
Competing from the middle. SSN was early to the smart grid space and pioneered many of the seminal concepts. Today, however, the smart grid formula is well known. And when it comes to the smart city market, SSN is behind much larger companies such as Cisco, IBM, Accenture and others who have been plowing that ground for years, as mentioned earlier.
Convincing the world that RF-mesh can scale. SSN's competitors often hint that the Silver Spring network can easily run out of headroom. That's wrong, says Anil Gadre who claims that "we've never been stopped in a deal by network constraints." What's more, SSN is not locked into RF -- it has had cellular-based solutions for some time. Gadre promises that "we will use the right technology for the right problem. What matters is to get the job done at lowest cost to connect and operate."
Even so, SSN is not just competing with other vendors of RF-based solutions. It must now contend with the giant cellular companies, who are determined to make machine-to-machine (in general) and smart grid (in particular) a major part of their business. Lesson: SSN has to make scalability a stronger part of its marketing message.
Getting better at supporting the competition. Few utilities are going to rip out an existing communications network that is performing well, even if it lacks the headroom to add more applications. We're in a world of mix-and-match "hybrid" networks. If SSN wants to have one platform to rule them all, it will have to expand its ability to use its control and security platform to manage networks other than its own. For instance, competitor Trilliant is out with a new version of what it now calls its "multi-technology platform," trumpeting its ability to combine "global 2.4 GHz RF mesh, M2M cellular, broadband mesh, and other standards-based technologies."
Growing its partner network. In the platform world, long-term success correlates closely with the size and success of your partner network. The best examples -- Cisco and Microsoft come to mind -- do several things very well. For one, they have a partnering "engine" in place with standard approaches to testing, certification and joint marketing. For another, they work hard to bring business to their partners. Related to this is the ability to manage co-opetition. They leave some of the spoils strictly to partners. But they occasionally choose to build out an application themselves and they manage to do so without angering the partner community. It's a delicate dance. SSN is off to a strong start, but it's going to be a long race against better-funded competitors.
More to come
The next time we take an up-close look at SSN, I predict we'll be talking about analytics. SSN has partners and offerings in that space, but it is working on ideas to separate "Silver Spring-powered analytics" from the pack. And I also think that SSN -- in line with most of its competition -- will offer more services. You'll certainly see lots of cloud-based analytics, of course. But perhaps even a hosted network. If utilities are willing to rent a network from a phone company, would they rent one from other entities as well?
That's for tomorrow. In the meantime, use the Comment form to leave your opinions of SSN's strengths, challenges and opportunities today.
Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.
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