Until now, Cisco has done more talking than doing on the smart grid.
Yes, Cisco has made investments, including a notable stake in GridNet, and it has been involved in some prominent smart-grid projects and trials. But those efforts have been tentative, and they haven’t involved Cisco introducing new products specifically built for utility customers pursuing smart-grid deployments.
Earlier today, though, Cisco rectified that situation, announcing a hardened, ruggedized router and a similarly hardened, ruggedized switch, both of which are designed for deployment in utilities’ electricity substations. The new Cisco IP-based smart-grid products — the Cisco 2000 Series Connected Grid Router (CGR 2010) and the Cisco 2500 Series Connected Grid Switch (CGS 2520) — are adaptations of existing Cisco gear.
As reported by Network World, the CGR 2010 is based on Cisco’s Integrated Services Router (ISR), whereas the SGS 2520 is based on Cisco’s Catalyst 2000 and 3000 series products. The SGS 250 comes in two four-slot versions, with speeds and feeds similar to those of ruggedized switches from smaller players that have been active in the market well before Cisco’s arrival on the scene.
Like those competing offerings from the likes of RuggedCom and GarrettCom, Cisco’s smart-grid networking gear adheres to IEEE 1613 and IEC61850-3 standards for utility substation environments, including the capacity to withstand extreme temperatures. The devices also provide enhanced protection against electrical surges and electromagnetic interference.
Although smart meters and advanced metering infrastructure (AMI) receive a lot of media coverage because of their consumer-facing orientation, smart-grid products and technologies — such as substation networking gear — built for utilities’ distribution networks could possess a greater likelihood of achieving near-term commercial success.
While nobody seems sure whether or when consumers will want to fiddle about with smart meters and home-energy management systems to derive potentially modest savings on their electricity bills — consumers’ willingness to subject themselves to demand-response initiatives also remains unknown — utilities will have a need to upgrade and overlay their electricity-distribution systems with two-way communication networks. Those networks will provide efficiency savings by capturing and transmitting data from multiple intelligent electronic devices in the substation back to utility data centers for analysis.
By making their distribution networks smart, utilities will be able to quickly and accurately identify, isolate, diagnose, and perhaps even automatically repair network faults. They’ll also be able to reconfigure networks on the fly to circumvent trouble spots and keep electrons flowing.
For Cisco, the kingpin of Internet routing and switching, these new products represent a logical entry point into the smart-grid marketplace. Cisco already is a market leader in switching and routing. To get into the smart-grid space, all it had to do was adapt existing products to the specific requirements of substation deployment.
Cisco is hoping to benefit from the inherent conservatism of the utility sector. Utilities prize reliability — and hence risk mitigation — above all else. Utilities prefer to go with the tried and true over the conceptually interesting but unproven; and they also tend to favor established, well-known vendors over startups. Cisco is hoping its Internet market leadership, in enterprises and service providers, carries over to the utility industry, allowing it to tap an opportunity that it believes could be a hundred to a thousand times the size of the Internet, representing a $20-billion market in just five years.
The networking giant’s success isn’t assured, though. While Cisco is the top dog of enterprise networking, it’s a newcomer to the utilities. Even though its brand is known, it’s not known directly by many utility customers. It will have to build a base, as well as relationships and credibility.
In an email message to Forbes, Forrester analyst Doug Washburn discussed the challenge Cisco faces:
“It’s going to be critical for Cisco to forge partnerships with smart grid solution providers, the Accentures and ABBs of the world. Those companies] specialize in the utility industry and can engage the utilities at a business and strategic level, not just the IT and operational level.”
In talking with EE Times, Washburn elaborated further:
“I did not hear much from Cisco on this topic, and it’s an important one since these players (Accenture and ABB, and the like) help utilities determine their smart gird strategy which ultimately drives technology and vendor decisions.”
But Cisco has drawn Accenture’s support. In a press release announcing its hardened networking gear, Cisco includes a salutary quote from David M. Rouls, managing director of Accenture Smart Grid Services:
“Accenture and Cisco have a shared Smart Grid vision. We believe that the inherent value in moving toward a Smart Grid is derived from securely transporting, integrating and analyzing the vast amount of information that results in the transformation from analog to digital. Accenture is particularly excited to enable the data management, event processing, and analytics functionality delivered with the Accenture Intelligent Network Data Enterprise (INDE) and leverage the advanced networking capabilities of the Cisco CGR 2010 for our utility clients.”
Besides, when it comes to entering new markets, Cisco knows the drill, even though this challenge might be qualitatively different from those that have preceded it.
Internet historians will remember that Cisco was once new to carriers. It had to develop domain expertise, develop and acquire new skills, and build and nurture new contacts and long-term relationships. It was largely successful in that endeavor, and it will follow a similar blueprint in attacking the smart-grid opportunity in the utility sector.
The company already is following the well-worn playbook, hiring utility insiders to join and lead its smart-grid team, obtaining essential skills and valuable customer contacts in the bargain. It’s building relationships with early customers, too, including three utilities that will use its new products in substation automation trials.
Network World reported that both Cisco products, the router and the switch, start at about $6,000, with the router available in July and the switch available in August. Meanwhile, EE Times reported that the router starts at a list price of $7,800, with the switch prices starting at $5,300.
Cisco has taken a while to make a product splash on the smart grid. This first tangible foray might not have the superficial glamor of a home-energy management play, but it’s a logical first step that allows Cisco to build a bridge from its successful past into a potentially lucrative future.