Palm Springs, Calif. -- Mesh is doomed, claims SmartSynch CEO Stephen Johnston.
"I have two very bold predictions," he said during an interview at The Networked Grid taking place in Palm Springs. "In two years, nobody will ever choose to buy a mesh network again, and everyone that has already picked a mesh solution will be integrating commercial networking strategy to supplement it."
Predicting the demise of mesh networking for the smart grid, Johnston admits, is self-interested, and the volume and acrimony over the protocol debate will get louder. SmartSynch produces software and hardware for connecting meters to utilities over the broadband networks owned by carriers like AT&T and T-Mobile. The company thus competes directly against Silver Spring Networks, which sells mesh networking equipment for essentially the same job.
Silver Spring has won some of the largest contracts in the smart grid world to date, including a multibillion-dollar contract with PG&E. Investors hotly anticipate an IPO. Silver Spring can erect networks for less than the cost and provide better performance than public networks, adds Eric Dresselhuys, chief marketing officer at Silver Spring.
So what will alter that titanic momentum? In the last 90 days, the broadband carriers essentially have had a mental shift toward the grid, Johnston argues. Carriers believe revenue coming from cellular contracts will inevitably decline in the future and see smart grid applications as a way to keep their pipes full. Right now, most smart grid traffic can also be scheduled for the off-hours between midnight and 6 a.m. That will change, but for now, it allows utilities to exploit fallow capacity. And the bandwidth exists. If you pinged all the gas, water, and electric meters in the U.S. every 15 minutes for data and sent it over he AT&T network, a day of data would add 1/500th of one percent to the total amount of data on the network.
Just as important, serving as a smart grid communications provider will allow broadband carriers to offer additional services -- home automation, electric vehicle charging, demand response services -- to the utility, effectively allowing them repeat those familiar "upsell" strategies in a new era.
Potentially, in deregulated environments, carriers could also retail energy. In Australia, a broadband provider already sells the quintuple play: phone, wireless, TV, Internet and power.
One CEO of a large carrier recently told its internal staff that the largest growth opportunity lay in smart grid, according to SmartSynch. Many have begun to more actively respond to requests for proposals from utilities.
"AT&T now has a smart grid team. Verizon has a smart grid team. Sprint has a smart grid team," he said. "This is a very recent occurrence."
In the relatively near future, expect to hear a major announcement about a utility selecting a commercial network for its smart grid rollout, he added.
The price has also come down. Back in 2000, SmartSynch's solution cost about $15 per meter per month, or way too much for utilities. A year ago, it cost about $5.
Now, "it costs pennies per meter per month," he claimed. "Commercial wireless coming to the smart grid will change everything."
Direct comparisons to mesh are a little tricky. Mesh companies sell equipment directly to utilities, which then operate their own networks. The monthly fees thus don't exist. Still, Johnston argues that a cellular/SmartSynch solution will cost less. Other broadband smart grid networking companies make similar claims.
Many utilities, which are notoriously conservative, have been skittish about exploiting public networks and have said they want to control their own networks. Utilities, however, also said they wanted to control their data centers, notes Johnston. Now, over 90 percent outsource data center functions, he said. Although large utilities may want to maintain their own networks, the 3,000 smaller utilities in the U.S. don't have the staff, or the ability to get rate increases, to get their own. In other words, hello Verizon. In its contracts, SmartSynch also runs the help desk, offloading a headache for the utility and carrier.
"I'm not saying there are not very practical and very real applications for mesh. I'm not anti-mesh. But if you are going to build a smart grid and you can pay less for faster technology, why would you put in slower stuff?" he asked.
But then again, look where the contracts are to date. And think of the possibilities for hybrids. San Diego Gas & Electric is building a hybrid cellular/mesh smart grid.
It should be an interesting -- and long -- debate.