Cisco Systems Makes Smart Grid Acquisition and Strategic Alliance

Through a strategic alliance and an acquisition on successive days last month, Cisco Systems, San Jose, Calif., further staked out its position in the pack of companies pushing to develop the market for intelligent control of electric power grids. At the same time, the company's move improves the likelihood that utilities can avoid being locked into proprietary communication protocols and will be able to make disparate networks work together — potentially creating a solution to one of the thornier problems in rolling out smart grid technologies.

Cisco has said it expects the smart grid to grow to a $100 billion market and began developing its smart-grid offerings last year.

Cisco's strategic alliance with Itron Inc., Liberty Lake, Wash., a manufacturer of intelligent metering systems for controlling electric and water utility systems, has the potential to substantially reshape the smart grid movement. The two companies agreed to work together to develop an open, enterprise-class networking protocol for electric utilities.

Cisco followed that announcement a day later with the acquisition of San Francisco-based Arch Rock Corp., a provider of Internet protocol (IP)-based wireless network technology for smart-grid applications.

The two moves put Cisco — already the reigning behemoth in computer networking — in a position to shape the development of advanced metering infrastructure (AMI) networks for utilities, based on the latest Internet protocol standard, IPv6.

Itron and Cisco plan to collaborate on developing open and interoperable, standards-based, secure technology for IPv6 implementation of field area communications to support smart metering, intelligent distribution automation and customer interfaces, the companies said in announcing the alliance. Such an approach will help ensure consistent and interoperable wired and wireless communications among the various components of the smart grid.

Under terms of the agreement, Itron and Cisco will jointly develop a reference design to define a standard for smart grid field area and smart metering network communications.

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