Last week, smart grid company Ambient announced the shipment of its 100,000th smart grid node. That’s the utility-pole-mounted box that combines multiple smart communications systems with the processing power and memory to perform a host of different functions for the grid.
It’s an important milestone for Ambient, which has put its nodes at the center of its plan to become a one-stop-shop for utility smart grid communications. It’s also driving big growth for the Newton, Mass.-based company, which reported 2011 net income of $4.8 million on revenue of $62.3 million in February, up from a loss of $3.2 million on revenues of $20.4 million in 2010.
There’s only one problem with these otherwise cheerful figures -- they’re based on one big customer. That’s Duke Energy, the Charlotte, N.C.- based utility that’s using Ambient’s nodes to connect about 800,000 smart meters and other grid devices, mainly via deployments in the Cincinnati, Ohio region.
Ambient hasn’t broken out specifically how many of its 100,000 nodes -- up from 75,000 deployed as of January -- have been bought by Duke. But the utility definitely represents the “vast majority” of the company’s business so far, Donald Pollock, vice president of global sales and marketing, said in a Tuesday phone interview.
That means that, for Ambient, “The most important thing we have to do is to grow our customer base,” he said. “It’s not just about seeing that deployment in Ohio finish. It’s also proving the commercial case, the business case,” both for new deployments with Duke and with other utilities around the globe.
Duke and Ambient have been working together since 2005 on building a node that combines hardware and software that support the utility’s multi-modal communications plans. Those include networking lots of meters and other grid devices that use communications ranging from powerline carrier to wireless mesh and Wi-Fi, and connecting it all to backhaul networks ranging from cellular to fiber.
Duke could continue to be a big customer for Ambient, of course. But that will require a lot of developments at the utility, including progress on smart grid projects that have faced opposition in other states, as well as a conclusion of Duke’s bid to become the country’s biggest utility via its proposed merger with Progress Energy.
So far, Ambient would appear to have a strong lead on its would-be competitors for Duke’s business. That includes Echelon Corp., which is supplying the smart meters for Duke’s Ohio deployment, but saw Duke cancel a $14.5 million contract for Echelon’s node devices last year after Indiana state regulators rejected the utility’s request for a statewide smart meter rollout there.
It also includes Cisco, which has named Duke as a big test customer for its smart grid router products, but has remained quiet about how else it may be working with the utility -- or how much money it’s being paid to do so.
In the meantime, Ambient is looking at new customers, new markets and new functions for its nodes, Pollock said. Last month, it announced it was testing its power quality monitoring technology in the U.K. for distribution grid operators, a move that could be the first into the European market, he said.
It’s also working on a pilot project with New York utility Consolidated Edison, a one-time investor in Ambient, Pollock said. He declined to provide more details on the project.
ConEd’s $1.4 million 2002 investment in Ambient was back in the company’s first incarnation as a would-be provider of broadband over powerline technology. That market that was also the target of companies like Current Group, before it became clear that utilities weren’t going to be able to compete with telcos and cable providers by using their power lines as broadband pipes.
Since then, Ambient has spent much of the past decade repositioning itself as a broader smart grid communications provider, and last year took their shares to NASDAQ from the pink sheets via a 100-to-1 reverse stock split.