Cisco Jumps Into Energy Management for Computers, Buildings

Cisco Systems Inc. is getting into energy management.

The big question now is who benefits, and who gets left behind.

The EnergyWise system is essentially a software console/application platform for controlling phones, computers, lights, air conditioners and other energy-consuming devices. When employees walk out of the building, for example, a signal (transmitted when their RFID-enabled ID car walks past the security gate) might be sent to shut down the phones and lights in their office.

Launched Tuesday, the EnergyWise system is available for free for customers using Cisco's Catalyst switching system. Cisco will first link the program to control power to the network and IP phones and later this year to allow customers to control PCs and servers with it. Next year, it will move toward building control. Although free, the program gives the networking giant an opportunity to sell switches, routers software and other services.

Cisco will rely extensively on partners to make applications and devices that sit on top of and interact with EnergyWise, Inbar Lasser-Raab, senior director of network systems, said in an interview last week.

For smart grid companies, EnergyWise could be their new best friend, or their worst nightmare. Partnering with Cisco could open the door to large customers that may not be willing to speak to start-ups now. Verdiem, which has software to control power consumption in PCs and other devices, is already working with Cisco.

"They are trying to get to the point where building management systems are driving by IP networks," said Vijay Parmar, CEO of GainSpan, which exploits WiFi for energy management.

Cisco buys lots of companies too so it could become a popular exit strategy for start-ups. (see Will the Computer Giants Invade Lighting Too?).

On the other hand, the program could create competition for companies that already sell demand response networking and communication technology, a list that includes EnerNOC, GridPoint, Silver Spring Networks, SmartSynch and Trilliant. It all depends where you sit in the ecosystem. EnergyWise will also help companies track carbon emissions, so all those start-ups with carbon counters now have a new person in the room to worry about.

"A heavyweight like Cisco entering the space will certainly lend increased attention, always good when it comes to smart grid initiatives," said Adrian Tuck, CEO of Tendril. "It's unclear who may get hurt by this move. Smaller, closed energy management technologies could suffer as the industry begins to expand and see more heavyweights like Cisco enter."

Three smart grid execs said that companies focused on LonWorks and BacNet, like Johnson Controls and Honeywell have been, could feel the most impact.

Success is not guaranteed. Cisco remains a relative newcomer to the often conservative power industry. Smart grid execs like Trilliant CEO Bill Vogel have said that experience and familiarity are strengths that aren't easily replicated.

Companies working on the "smart grid" – a catch-all term for smart meters, demand-response systems, home energy monitoring devices and the communications and networking systems that let them talk to each other and the utilities that provide their power – also have been buying each other up at a rapid clip, leading to speculation as to when a giant like Cisco might start its own buying spree (see Acquisitions in the Smart Grid: Get Used to It).

IT giants like IBM, Hewlett-Packard and Sun Microsystems are putting increased emphasis on making more energy-efficient equipment and supporting services to manage their power use. IBM has also made several smart-grid related deals in the past year (see IBM Snags Another Smart Grid Deal).

Summing up the competitive landscape, "Today there are a number of individual solutions available," including PC management, HVAC system controls, lighting management and the like, "and they're all disparate," said William Choe, product management developer for Cisco's LAN switching business unit.

But: "This is the first time you're seeing a broad solution to go after power management across the complete environment," he said.

In its first phase, EnergyWise will operate with devices powered over Ethernet cables, such as Internet protocol (IP) phones and wireless access points, Choe said. Cisco has partnered with network management software developer SolarWinds to help create the energy management "dashboard" for that service, he said.

The next phase, to be released this summer, will add control of PCs and other IT equipment, Lassen-Raab said, and will work with Verdiem on this. (see Verdiem Gets New CEO, Makes Plans to Move Into Energy Management).

In the first half of 2010, Cisco plans to extend EnergyWise's capabilities to controlling a wide array of building devices, from heating and air conditioning systems to lighting, security and sensor devices, Lasser-Raab said. Cisco has partnered with Schneider Electric, which makes building control systems, and is in talks with other giants in the field, such as Johnson Controls, she said.

As for hooking up utilities to the buildings using EnergyWise, Cisco not surprisingly supports Internet protocol-based communications, Choe said.

"If you look at the grid technology today, a lot of it is really based on proprietary protocols," he said, but "the telemetry systems they're involved with really have an opportunity to lend themselves to IP."

So, will Cisco's move be viewed as competition to other smart grid communications and networking companies? It depends. If anything, it will bring greater visibility to smart grid technologies, said Eric Miller, chief solutions officer for Redwood City, Calif.-based Trilliant. It will also bring greater standardization.

"The idea of being able to have intelligent power use for networking devices and equipment is a huge step forward and a great energy efficiency move," Miller said, since most of the gear involved wasn't designed with power management as a priority.

At the same time, Miller said that "the networking equipment to actually connect buildings to the utility in a real-time communications link is quite different than corporate networking."

Corporations and utilities worried about security and performance issues won't necessarily want to open their networks to one another, he predicted -- while Trilliant and competitors like Silver Spring Networks and SmartSynch make communications systems to bridge that gap.

 Editor-in-Chief Michael Kanellos contributed to this story.