Blink too fast, and you'll miss the stampede of Internet giants migrating away from the home energy management green field. First Google trampled over PowerMeter in June 2011. Read about here http://idc-insights-community.com/posts/2fda4905df. Or the extended version here http://www.idc-ei.com/getdoc.jsp?containerId=lcUS22921411 A few weeks later, Microsoft left Hohm in the dust when it announced it would stop supporting the cloud based service in 2012. Now, Cisco's announcement make
Specifically, Laura Ipsen, Cisco's SVP and GM of Smart Grid, blogged last night:
"Over the past two years the home and building energy management markets have evolved in such a way that we believe we can provide more value to our customers and the industry by enabling interoperability through our core networking products and solutions (for example, EnergyWise) as part of our integrated architecture within the broader smart grid effort.
For building energy management, this means we are actively pursuing several strategic options for Cisco’s Network Building Mediator and Mediator Manager product line, with an emphasis on minimizing the impact on current customers, partners and employees. For energy management in the home, we will transition our focus from creating premise energy management devices to using the network as the platform for supporting innovative applications and architectures that will improve our customers’ value proposition in the consumer energy management market."
Read Ipsen's complete post here: http://blogs.cisco.com/news/evolution-of-cisco%E2%80%99s-energy-strategy/
Cisco's Network Building Mediator and Mediator Manager are the building energy management products Cisco branded following the Arch Rock acquisition announced in September, 2010.
CORRECTION: Cisco's Network Building Mediator and Mediator Manager are building energy management products Cisco branded following the Richards- Zeta Building Intelligence Inc. acquisition announced in January, 2009. http://newsroom.cisco.com/press-release-content?type=webcontent&articleId=4735825. The Arch Rock assets were incorrectly referenced and will not be impacted by this recent decision. The Arch Rock network technology (6LoPAN) will continue to be integrated into the end-to-end smart grid network strategy Cisco has pursued for the past two years. There are no plans to change direction with regard to Arch Rock assets.
What was out of alignment with Richards-Zeta was that Cisco was pursuing a building management strategy as part of its smart grid strategy. Building energy management is not the domain of utilities, which spend the big money on smart grid. Rather, building energy management has different business drivers, requires a different go to market sales and marketing structure, and requires product offerings independent of utilities needs.
Speaking with Paul De Martini, CTO & VP, Innovation, Connected Energy Group, he explained the discontinuation of Cisco's Network Building Mediator and Mediator Manager followed an assessment of the adjacent and competing products available to the building energy management market. A determination was made that resources would be better utilized by focusing on enabling interoperability of its core network that enable building energy management through such product solutions and technologies as EnergyWise and IOS software products.
On the home energy management front, Cisco's Home Network Controller, introduced last year, and all device product work will end according to Ipsen. (Cisco's Home Network Controller is a countertop touch-screen display that allows people to monitor electricity usage and to program home energy to reduce waste and take advantage of off-peak pricing.)
Clarification: Paul De Martini confirmed the Cisco Home Network Controller was discontinued with the announcement. He pointed out that new device product development for home energy management is under assessment but future plans have not been determined. However, he further indicated that the networking company is assessing options to deliver value to the home energy management market through its existing home based consumer products i.e. Linksys (LAN products) or Scientific Atlanta (set-top boxes).
Work with and investment in Control4 may have been influential in that decision…. http://www.idc.com/getdoc.jsp?containerId=lcUS22701011. Just like the influence that other partnerships such as Schneider Electric may have had on its decision to refocus investment in building energy management…. http://epoverviews.com/articles/visitor.php?keyword=%20Cisco
The announcement was likely precipitated by a few factors:
> Home energy management is a crowded space with lots of solutions in the market place. Traction is limited as utilities have not fully figured out how to tackle the in-home technology frontier to enable increased consumer participation in energy management. In the end, the level of business cannot viable support the current stable of competitors
> Cisco management is under Wall Street pressure to trim 'fat' and boost profitability in the face of a prolonged weak macro-economic environment and slow growing enterprise networking equipment market. The utility sales cycle is long and Cisco needs results yesterday. On top of that, rumors are stirring of Cisco's eventual exit from the home and SOHO network market via its Linksys product group.
> In a rush to establish credibility in the smart grid opportunity space, it acquired assets not fully vetted at the risk of future abandonment. Some of those assets could have been considered experimental. I personally believe this is not the case but I proffer its possibility.
With this announcement, the company's decision does not reflect kindly on Cisco's smart grid strategy and ability to implement since we look at strategy as a long term 3 - 5 year plan. The upside is Cisco is likely learning fast and willing to make quick adjustments when needed despite how it looks to the public. Cisco is a resource rich company trying to dig into an (utility) industry that traditionally has not moved at Internet speeds. Will Cisco be able to adapt to the slower speed that utilities operate? Are they overreaching in their smart grid growth expectations? Does this move make you question its commitment to the industry? Share your thoughts?