Cisco and Itron announced a strategic alliance that promises to “advance the transformation of the world’s energy infrastructure”. It sounds pretty big, yes? The press release would be a good source for smart grid “buzzword bingo”, with the announcement of a joint collaboration on a standards-based, open, highly secure, interoperable, scalable, reliable, enterprise-class, IP-based, end-to-end, reference-design platform. The hour-long press/analyst call didn’t seem to clear up the confusion, judging from the number of calls I fielded from various folks just afterwards.

So just what did Cisco and Itron announce? It seems Itron and Cisco will develop network software, initially instantiated within Itron’s OpenWay smart meter hardware, leveraging IPv6 and other “Cisco IP” goodies, for a highly secure, open, and interoperable RF mesh field area network. Itron will embed and license “Cisco IP technology” within OpenWay as well as distribute Cisco networking equipment and hardware. Ultimately, this “platform” will be offered to all (i.e. other AMI and smart grid vendors) to help grow the market. Neither vendor would answer questions about product specifics or timing of when the “platform” would be released.

Still seem fuzzy? Itron has already embraced IP in their recent revamp of the OpenWay network. An IEEE 802.15.4 working group is working feverishly on a RF mesh utility network standard, and the IETF is nearing completion of an IP-based ZigBee stack redo to be included with the eagerly anticipated Smart Energy Profile 2.0. So is there anything new and interesting in this alliance?

Plenty – at least potentially. Buzzword bingo aside, there are no “highly secure, open, and interoperable” AMI neighborhood area networks today, except perhaps the PLC-based smart meter interoperability demonstrated last year in Europe between Itron, Landis+Gyr, and Iskraemeco under the influence of EDF’s 35 million meter checkbook. Other smart grid application domains, such as distribution and substation automation, are similarly challenged. These are all rapidly moving toward IP, and while IP adoption is necessary, it is far from sufficient for delivery of the “secure, open, and interoperable” promise.

Cisco may be the only vendor with the technical capability, financial heft, and market audacity to bring a unified end-to-end smart grid communications architecture to fruition, and this venture with Itron should be seen in this context. The “Cisco IP” that Itron is licensing and embedding should be understood as both “Internet Protocol” and “Intellectual Property”. This includes much of the “special sauce” that is required to actually operate a robust end-to-end network. And providing differentiated (even proprietary?) special sauce such as network management, security regimes, and performance monitoring and management, within the context of IP standards, is largely how Cisco came to lead in the market for enterprise and telecom networks.

What Cisco gains from this partnership is an opportunity to proliferate such “Cisco IP” to a growing base of smart meters. This is key puzzle piece in for an integrated end-to-end network offering, where the rewards in the home and enterprise parts of smart grid may be Cisco’s biggest opportunity. Having Itron as a channel for Cisco equipment is an obvious and necessary bonus.

Itron gains badly needed “street cred” as an IP-based AMI supplier, especially versus Silver Spring Networks, who has given them fits. More importantly however, Itron likely realized that the walls of the AMI garden are down, and gaining pride of place within Cisco’s unified smart grid architecture is a strong competitive move. The actual technology Itron can leverage, especially for security, won’t be bad either, allowing them to concentrate on the actual AMI hardware and applications instead of reinventing the network wheel.

There are a few warning signs customers should monitor. In the press release, Cisco’s Paul De Martini calls Itron’s current-generation OpenWay solution “an excellent candidate for future upgrades”, though the Itron execs were somewhat less equivocal during the analyst conference call. And historically “Cisco IP” has no less vendor lock-in power than the most proprietary SCADA or AMI system today.

Other smart grid vendors may feel a bit uneasy, especially Silver Spring Networks, who is still building momentum for their seemingly perpetually-imminent IPO on the strength of an IP-based system. Some Itron partners may also need reassurance, particularly Certicom, a supplier of public key encryption and key management technology, who could easily get squeezed out of OpenWay.

Given the vagueness of the specifics and timing around this announcement, it will take some time before we can assess whether any of the potential promise is being met. We’ll be watching to see how Cisco assembles additional pieces in their smart grid puzzle, especially around broad architectural technologies such as network management and security. We’ll also see how Itron’s AMI roadmap evolves to match up with such Cisco architectural initiatives.

So it may be some time before we can declare “bingo”, but in the meantime, let the buzzwords fly!

In the weeks since our smart grid networking and communications report was released, we’ve had some interesting industry reactions. Some press folks and, well, utilities just ask “which technologies are the winners and which are the losers?” Perhaps anticipating this, vendors have been quick to reinforce how their particular networking flavor is better than their competitors.

Technically, there are many potential points of comparison, including bandwidth, latency, range (particularly for wireless), reliability, security, and of course, cost. Since the suitability of any given technology depends on application requirements, we outlined the key smart grid applications and their requirements: HANs, AMI NANs (Neighborhood Area Networks), AMI backhaul, Distribution Automation WAN, and Substation Automation WAN. We defined the requirements rather broadly, as they vary considerably on a case-by-case basis. We then surveyed over 16 different communications technologies and outlined their attributes against these applications requirements.

The complications arise when trying to offer summary comparisons between the technologies, as attempted in the nearby table. For example, bandwidth might seem like a straightforward metric to characterize, however the bits-per-second of a link may be a poor predictor of actual application throughput. Node-to-node performance in a mesh network is highly dependent on the number of hops and link contention within these hops. Depending on customer deployment decisions, a network with 19.2 kbps links could outperform a network with >100 kbps links. Extending this logic, a star-based topology, such as a 3G public network, might then seem better compared to a mesh. And yet, the latency across an IEEE 802.11 broadband mesh (aka “metro Wi-Fi”) may still be an order of magnitude less than that of a public wireless network when all the access protocols and various backhaul networks hidden within a public network are factored in. And some technologies may offer a wide range of bandwidth options depending on range (e.g. WiMAX) or cost (e.g. satellite). Which data point to choose for a comparison? Even cost has many variables: the cost of fiber cable and equipment continues to drop, but that hardly matters if digging up an interstate highway or crossing a mountain range in order to install it.

The bottom line, as we are careful to point out in our report, is that any summary comparison needs to be understood only as a starting point. Ultimately, for any given project, the various choices – technology and individual vendor – need to be evaluated against carefully constructed use cases. As for winners and losers, there are some general principles that do seem to universally apply:

1. Standards are important. If the evolution of data and telecom networks have demonstrated anything, it is that proprietary technologies invariably yield to industry standards. Distressingly, the largest smart grid application in terms of number of nodes (smart metering and AMI), is the least standardized. This will change.

2. Security must be baked in. A secure network means much more than having a bit of link encryption or vague support of the “IP security suite”. It must include a comprehensive end-to-end security regime including strong key management, and is a business process issue as much as a technical concern.

3. Evolution flexibility trumps application-specific bells and whistles. The smart grid is a big, long-term endeavor, and none of us really knows quite where it will lead. Flexible layered network architecture is key to accommodating as yet unforeseen changes.

So, while our report may imply some winners and losers within our per-application forecasts for each of the 16+ smart grid networking technologies, ultimately, it is up to you to pick the ‘winner’ for your application. I hope we can help, and good luck!

In the frenzied smart grid discussions of networking topologies, standards, and frequencies, the first fundamental question is whether utilities should build their own dedicated private communications infrastructure or leverage existing public telecom networks. To anyone from the telecom industry, this seems like a silly question. Why duplicate a broad-based infrastructure when multiple competing providers have already spent billions blanketing the globe with wireless and wireline networks? Are smart grid communications needs really that special?

It seems the answer is a definite maybe. Some utilities with which we’ve spoken are adopting a “use public when we can, build our own when we must” approach. They say that smart grid bandwidth needs today are relatively modest but are likely to grow, and leveraging telecom networks provides flexibility to adapt. Bolstering this view are telecom carriers including AT&T and Verizon in the U.S., supported by vendors such as SmartSynch, who have recently refocused on the smart grid with tailored pricing and support offerings. Though public wireless is common for C&I smart meters, neighborhood AMI networks are typically considered a “build where we must” application. However, even this may be changing. For example British Gas aims to leverage Vodafone’s GPRS network to connect over 1 million smart electric and gas meters in the UK starting this year. Competitors in the UK quickly point out the standards and regulatory dance has not yet finished in the UK’s unique market, but there is no doubt that public wireless is gaining a toehold in AMI applications where it previously had none.

On the other side of the argument, there is an opposing adage: “build our own everywhere we can, unless economically not feasible.” Proponents offer a long list of reasons for this approach, but it usually boils down to control. The grid communications infrastructure is often critical and becoming more so. Having complete control of the reliability, availability, performance, security, and coverage of this infrastructure is seen as necessary. To paraphrase more than one utility exec: “A major event where I most need my communications is likely to be the same moment everyone will grab their iPhones to see what’s going on – I do NOT want to have to compete for bandwidth”. Similarly, as smart grid cyber security issues are getting greater attention with new NERC CIP requirements, NIST standards, and even looming U.S. legislation, having full ownership seems like a safe bet. Much to the chagrin of the geeks, one major issue is not technical at all. Private network infrastructure gets included in the “return on assets” equations that figure into how many utilities make money; “phone bills” generally do not.

Despite these different philosophies, our research points to similar results: smart grid networks are hybrids of private and public technologies. We are forecasting strong growth for telecom carriers in the smart grid domain, yet we see private technologies remaining dominant for most applications. Accelerated adoption of public wireless will likely need broader deployment of 4G technologies that deliver greater service level guarantees.

In any case, a simple answer to the simple question of “public or private?” will remain elusive, requiring utilities to understand their individual requirements and longer-term roadmaps, and make their choices accordingly.

The first Smart Grid Cyber Security Summit was held recently in San Jose. IBM’s Andy Bochman, in his excellent Smart Grid Security blog (http://smartgridsecurity.blogspot.com) provides a good review of the proceedings, and I’ll add a few of my own thoughts.

The attendance of approximately 75 people was not bad for a first time event, but well below the typical 200-300 people drawn other smart grid conferences. There were few utilities present. My informal count was three, including invited panelists, with none from California. Interestingly, the California PUC was there in force. A similar cyber security event I spoke at in Washington, D.C. in June attracted no more than 25 people, despite a strong speaker lineup. Is cyber security simply not that high on the industry’s priority list?

After listening to some of the expert presentations, it certainly ought to be. The refrain was consistent: the current grid, with its hodgepodge industrial control system (ICS) technologies, is highly vulnerable to a cyber attack that could destroy critical generation and T&D assets. Resulting outages could last for weeks, causing economic devastation. Smart grid integration could make it worse. Utility IT staffs with some security knowledge don’t understand ICS, and operations groups that do don’t trust, or even like, the IT groups. Nationally, very few experts (perhaps tens to low hundreds) understand enough ICS and IT to be useful. Most industry executives have their heads in the sand. The few that don’t are thwarted by clueless regulators that deny rate cases for even modest security improvements. The recently discovered Stuxnet infestation targeting Siemens SCADA systems (see: http://www.symantec.com/connect/blogs/stuxnet-introduces-first-known-rootkit-scada-devices) provides the first hard evidence that we should be afraid – very afraid. The passion of the alarm sounded by these speakers was hard to ignore, yet where is the progress?

As a recovering marketing executive, I wondered why this message is apparently not getting through. One completely unscientific (and probably unfair) observation is the security messengers appear to be culturally worlds apart from their utility audiences. They are more likely to be in tee shirts than ties, have longer hair and beards, have body piercings and tattoos, and are proud to have been fired more than once for “telling the truth” to their management. Many have chosen to live in rural locations, have backup generators, and own more than one gun. It is hard to imagine a starker contrast to the buttoned-down-white-shirt-and-tie utility executive. Could this be a major impediment to grid security?

The good news from the conference is the tide appears to be turning in recent months. Smart meter vendors in particular have ramped up security R&D efforts considerably. To paraphrase one panelist: “I’ve cried that the emperor has no clothes, and now he’s hired me to be his tailor”. The virtuous cycle of a recognized need creating market demand that spurs robust vendor R&D seems to be underway. Security standards efforts are in full swing, and though some will argue their efficacy, FERC and other agencies are ready to push them. And judging from side conversations amongst the conference expert comparing their congressional briefing calendars, the US Congress is one group that is listening, with some rare bipartisanship.

At Pike Research, we have been forecasting significant opportunity in the smart grid cyber security arena for some time. Most recently, my colleague Bob Lockhart (also at the conference), authored a report on Smart Meter Security, highlighting specific opportunities in this slice of the smart grid. Security needs be a baked-in part of the “smart” in the smart grid, and the innovation opportunity extends across the value chain, including silicon, software, equipment, communications and services. Let’s hope we get there in time.