Cisco has made an equity investment for an undisclosed amount in Grid Net, a move that will give a boost to both in the grid.
Grid Net wants to build broadband networks to connect utilities and their customers. Right now, the company primarily makes equipment and other technology based around WiMax, the long-range broadband protocol originally seen as a successor to Wi-Fi. Grid Net, however, also has plans to adopt high-speed cellular networks.
Other investors include Intel, one of the early and persistent promoters of WiMax, and General Electric. General Electric also licenses the company's technology for some of its meters.
The big debate surrounding Grid Net is whether or not utilities really need this kind of bandwidth. Smart homes will send persistent amounts of data, but in relatively low amounts compared to that used by computers. Rival Silver Spring Networks has been winning contracts in the U.S. by selling mesh networking equipment.
Grid Net, by contrast, has argued that the flow of data will increase, so utilities should build their networks in anticipation of needing more bandwidth. Last year, the company signed a deal with Australian utility SP AusNet. The utility plans to use the next-generation wireless technology to link about 680,000 household customers with smart meters. Recently, it hired Andres Carvallo, one of the more prominent smart grid execs in the U.S., from Austin Energy.
Cisco began to actively pursue the green market in 2007 with a set of rousing speeches from CEO John "Are You Ready?" Chambers. The full strategy got fleshed out in January 2009 with the release of EnergyWise, a software layer designed to curb power consumption in PCs, networking equipment, phones and eventually buildings. After that, the compulsive shopping spree was only a matter of time. Cisco has already bought one outfit in building energy management. Some of its partners in this effort include Verdiem and GridPoint.
Conceivably, the technologies from the two companies will complement each other.
Another common trait: both companies despise Silver Spring. At least that will give them something to talk about during strategy meetings.