Itron is one of the top smart metering and advanced metering infrastructure (AMI) networking companies in the world. The company is dedicated to end-to-end smart grid and smart distribution solutions for electric, gas, and water around the globe. Itron’s smart metering data collection and software systems are used by nearly 8,000 utilities worldwide. The company has partnered with numerous names for its network solutions, such as Cisco for its open grid platform, along with Tendril, IBM, HP, EMC, Alstrom, Lockheed, Microsoft, and Oracle. A recent partnership with Landis+Gyr will result in the integration of the two companies’ communication technologies into their advanced meters.
Itron uses two-way, unlicensed RF mesh communication in its smart meters, dubbed the OpenWay CENTRON. The meter also includes a ZigBee chip for communication within the home area network (HAN). The company has landed a number of major smart meter deployments, including nearly 5 million meters for Southern California Edison, along with rollouts for Sempra (San Diego), CenterPoint in Houston, and Detroit Edison. Additionally, Itron earns nearly two-thirds of its revenue outside North America, with numerous international contracts held by Actaris, a company Itron purchased in 2008 for $1.6 billion. Actaris offers electric, gas, and water meters in Europe, Africa, South America, and Asia.
In recent news, Itron has been selected by Detroit Edison to provide 800,000 OpenWay smart meters using Tropos Networks networking. Itron scored an even bigger deal earlier this spring when BC Hydro selected the company to provide two million meters for its customers over the next two years. The BC Hydro deal (with networking provided by Cisco) is valued at $270 million. Itron also recently acquired the established French software company Asais, which specializes in energy data management, hoping to expand its end-to-end portfolio. The company has also newly expanded upon a partnership with SAP.
Primary competitors: GE, Landis+Gyr, Silver Spring Networks, Elster, Sensus
Analyst Note: While at first glance, the advent of the age of smart grid and ‘smart cities’ looks like the best thing that could possibly happen to this Spokane-based metering giant, over the long term, the question of ‘Will Itron survive smart grid?’ is an interesting one to pose.
While Itron has been the most dominant player in AMR (last-generation, drive-by style) meters, AMI has forced Itron to move into technologies that historically were outside the company’s core competencies, such as networking, software, data management and cybersecurity. In fact, increasingly, Itron has looked to partner with leaders from these other domains (most notably, Cisco) in the realm of grid communications. Further, and perhaps somewhat surprisingly, a recent partnership with Landis+Gyr (now owned by Toshiba), Itron’s primary competitor, has the company willing to split utility deals by offering different technology pieces of the overall AMI solution.
While all of this is actually very good news for the utility industry as it increases interoperability among the major players (and thereby, in effect, begins to establish a set of de facto standards), it’s unclear whether this is actually in the best interest of Itron. After all, there is a reason why companies, such as Itron, despite their best efforts on the marketing front, have basically resisted open standards. The current trend in metering hardware, i.e., using a system-on-chip (SoC) design and replacing discrete solutions (multiple chips) with a single board, will drive metering hardware closer to commoditization. Further, it highlights the question of what part of smart grid Itron is left holding, as metering profits narrow and as AMI increasingly becomes seen as simply an application of the smart grid, rather than the crown jewel (as perceived by many in the industry three to five years ago).
One area where Itron does appear to be getting it right is in meter data management (MDM). As evidence, the company provides its solution to utilities that use other vendor’s meters and networks (current customers include Southern Company and Nevada Energy [Sensus], Pepco Holdings, Powercor/CitiPower Australia and Florida Power & Light [Silver Spring], and Idaho Power and Bangor Hydro [Aclara]). The company is now attempting to parlay these efforts into the realm of data analytics – the next big growth area in smart grid, as predicted by GTM Research, but to be frank have been slow to enter the analytics game.
While these concerns may be most pertinent in the longer term (and, to be fair, could be asked of any of the legacy metering players), Wall Street has not been kind to Itron over the past three years; presently, its shares are trading around the $30 mark, way off the 2010 peak of $79 and its 2008 peak of $106, which was probably part of the reason why the company’s last CEO was recently shown the door (officially, he retired -- after a mere 20 months with the company). Former CEO LeRoy Nosbaum was then re-instated by the board.
If one of the big players of T&D, such as ABB or Siemens, wants to take control, we can’t help but point out that Itron is now “on sale” at more than 60% off last year’s price.
Despite it all, Itron currently continues to be the dominant player for both AMI, and last generation AMR, meter shipments in the U.S, which gives the company a breadth of utility relationships that most of the vendors in this report can only hope for.
To learn more about The Networked Grid 150 report in its entirety, visit http://www.greentechmedia.com/research/report/the-networked-grid-150