I just finished writing how it will take time before we see any specifics on the vague “platform” announced by Cisco and Itron. I guess time is up. Cisco announced the intention to acquire Arch Rock Corporation, the long time IP-based wireless sensor network technology company. So much for needing patience….

I should have seen it coming. We sat down with Arch Rock back in May, where they previewed an impressive, very well thought out, end-to-end, IP-based AMI software platform, formally announced in June. This leverages all the important existing and emerging standards. And with Arch Rock folks active in most of the relevant committees, their pre-standard implementations should be well informed.

The big problem I saw in the Arch Rock effort was a business issue: they aimed to license the platform to existing smart grid vendors, most of which already had products in the market and aggressive IP-based R&D underway. I thought it highly unlikely Arch Rock could get major players to dump their own efforts and outsource this key architectural component, and thereby spur the market for a generic IP-based ecosystem for sub-1 GHz wireless communications. I still think I was right – Arch Rock couldn’t – but Cisco can, as evidenced by the big Cisco/Itron strategic alliance.

The Arch Rock platform will undoubtedly undergo some evolution in the collaboration with Itron, leveraging Itron’s experience in successfully deploying large-scale AMI mesh networks. The value of this experience should not be underestimated. In a similar arena, some in the IP community mocked the ZigBee wireless mesh networking stack as a bloated mess, until these once warring groups started collaborating (thank you, NIST!). The word on the street is they’re struggling to keep the new IP-based ZigBee stack within the same code footprint and functional capabilities as the existing ZigBee PRO stack, but the ultimate collaboration should result in a stronger standard and products. 

So the path forward on the Cisco/Itron platform appears significantly clearer. Starting with Arch Rock’s technology, Cisco adds their special sauce, and Itron integrates it all into the OpenWay platform, refining it along the way. None of this is a slam dunk, as Itron only knows too well and Cisco/Arch Rock may need to learn.  What will happen to Arch Rock’s hardware products is unclear, but I would expect them to fade away. The competitive threats to other AMI vendors such as Silver Spring Networks and Trilliant are now clearer (and stronger), though they at least now have a reasonably detailed product spec to push against instead of a vague platform ghost.

All in all, if a standard AMI communications platform is the goal, then I cannot imagine a better combination than Cisco’s architectural breadth, Itron’s experience (and savvy), and Arch Rock’s technology. I may not be ready to cry “bingo” yet, but I think we at least have “b-i-n” in place. Now let’s see where the “g-o” will come from….

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!

The energy efficiency retrofit industry for public buildings is relatively well developed worldwide compared to the private building retrofit industry. It is a large market in the United States, with annual revenues for energy service companies in the vicinity of U.S. $4 billion. However, long-term energy efficiency and carbon mitigation targets worldwide will rely heavily on improving the efficiency of the entire building stock. Public buildings represent only about a quarter of the total commercial building stock in the United States, and retrofits have barely begun to touch the private building stock.

One reason for the sluggishness of efficiency in the private building stock is the lack of post-retrofit data on building performance. Although there are many successful examples of retrofits in the private sector, the industry as a whole needs a robust set of data on post-retrofit performance and payback before they will be convinced that the opportunity to reduce operating costs is real, the risks are low, and the ROI is high enough to justify investments in efficiency.

Today, efficiency retrofits are typically based on a predictive model in which building engineers model energy use based on the building’s equipment, envelope, climate, and usage patterns. However, the actual performance of the building can often diverge significantly from the predictive model, and this discrepancy makes private building owners reluctant to invest in energy efficiency. It also makes financial institutions unwilling to provide the necessary financing to support efficiency projects, as the perceived risks (that buildings will not meet their predicted efficiency levels) are too high.

There is also the issue of payback period. Whereas the public sector is willing to accept payback periods of 10-15 years, the private sector rarely accepts paybacks of over 4 years. Additional post-retrofit performance data would ease concerns about the paybacks of certain measures and reduce the perceived risks. Today there is a tendency toward “cream skimming,” or selecting only measures with the fastest paybacks (such as lighting retrofits, energy control management systems, and retrocommissioning). Reliable data on the ROI for all efficiency measures would give investors the confidence they need to invest in efficiency.

The industry is just now starting to take the first few steps toward addressing this major barrier. For example, the Deutsche Bank Americas Foundation, a philanthropic arm of Deutsche Bank, is starting to compile a set of data on several hundred buildings in New York City. Gary Hattem, the president of the foundation, argues that “if underwriters can determine a predictable savings from retrofits, then they can create a financial instrument backed by these savings to sell on the open market.” In other words, data on post-retrofit building performance would reduce the perceived risks and free up capital for efficiency.

If the Deutsche Bank Americas Foundation and other groups can compile post-retrofit performance data in commercial buildings, it would do a lot to push the needle and lower the bar for private building owners to begin investing in energy efficiency.

Why are we all so excited about the Smart Grids anyway? Potential. Smart Grids hold potential to save consumers money on their energy bill. To save utilities capital expenditure for new generation. To guarantee energy independence for our nation – for your nation, wherever you are. To do more with less energy. Some believe that Smart Grids will save the earth. There is just so much potential!

Bear Bryant once said, “Potential means you ain’t done it yet.” Others heard him say, “Potential is what gets you fired.”

Where is that more true than Smart Grids? We certainly ain’t done it yet and several jobs – and political careers – are being risked in its name. So it may be worth a diversion from our day-to-day worries to consider what could prevent our realizing Smart Grids’ potential.

Here’s one possibility: Fear. And who’s afraid? Ratepayers. Ratepayers that elect politicians.

Anything that sows fear into the hearts of ratepayers – consumers – can make its way back to elected representatives. Those politicians, wishing to remain in office, will oblige their constituents and work to retard Smart Grid deployment. We know that this can happen. Already we have seen several Smart Grid deployments stalled by the outcry over increased energy bills.

Now consider another fear: terrorism. The press reports regularly that smart meters have been hacked. Perhaps the first major story was when a well-known security research firm showed us in 2009 that a smart meter could be successfully hacked.

But they didn’t really show us that a smart meter could be hacked. We already knew that. That any IT device can be hacked is a given – it’s part of our daily lives. Their research showed us how. Full credit for that – it’s valuable research that can only lead to better security. Better security because the threats are better understood, and better security because some meter manufacturers are blasted out of their complacency. That’s okay. This is extremely important work that needs to be done.

What’s not okay is going on national television with a sensational story that smart meters have been hacked. Of course they have. If you have sold 100,000 units of hardware or software and it has not been hacked, there are two plausible explanations:

• It cannot be hacked because it doesn’t do anything

• It actually has been hacked but you haven’t discovered the hack

So what is it to go on TV and tell an uninformed public that doesn’t understand IT that their electric meters can be hacked? How about sensationalism? Or sowing fear? Is all this negative publicity for smart metering bad? Yes.

The public already fears smart meters, after stories in several states of electricity bills suddenly doubling when smart meters were installed. The explanations often turn out to be pedestrian: “Your electricity bill doubled because your old meter was rusted out and not accurately recording your consumption.” But no matter the explanation, mainstream media have been quick to pick up on the thread: Computer geeks botch another technology roll-out; don’t understand the real world, etc.

For sure there have been errors in smart metering roll-outs. Regardless, consumers fear smart meters, and the media seem content to stoke those fears. So what is the need to layer fear of terrorism on top of that? The typical consumer has no idea what a cyber-attack is, let alone whether a worm is more likely to propagate in an RF mesh, an RF star, a PLC network, or none of the above.

What if instead we considered that we are still in the deployment phase – admit that there will be problems, find them through sometimes brilliant research, and then fix them? That’s not to say that we should cover up any bad news. Where there are problems they must be aggressively communicated to the right people and quickly remedied. But telling the general public that as an industry we haven’t got our act together – that only sows more fear in consumers’ hearts. Who will then write their elected representatives, and repeat the cycle we’ve already seen once with billing issues. So why not go easy on the sensational stories for a while?

Sad to say about the Cyber Security world: we’ve chosen a profession where the true heroes are anonymous.