The smart grid won’t really be truly smart until all its different networks are merged into one. First, you’ve got to build a platform that can tie them all together. Then, maybe, you can control them all in unison.
While companies like Silver Spring Networks try to expand existing smart meter-specific networks to cover more functions, other vendors are promising a single view for utilities no matter what vendors they work with. It’s called a network management system (NMS), and it’s going to be the most interesting smart grid market to watch in 2012, mainly because it doesn’t really exist yet.
That’s all about to change, however. Tuesday saw two heavyweights enter the ring: Cisco, which launched an NMS product as part of a broader smart grid announcement, and SK Telecom, which unveiled an American subsidiary called GridMaven that’s aimed at the U.S. utility market.
Laura Meadors, GridMaven’s director of smart grid, told me last week that the company released its Network Manager product in September, and has been talking to a few dozen prospective customers for the past year and a half about what help they need in managing their smart grid networks.
“There are all sorts of promises that have been made about what the smart grid can do,” she said, but “it’s not enough to deploy lots of smart devices out there -- you have to intelligently use them as well.”
Meadors wouldn’t name any of GridMaven’s prospective customers, but did note that some have deployed lots of smart meters and are now struggling to manage them effectively. Beyond that, there are hosts of legacy networks -- SCADA systems, microwave radio distribution grid gear, field area networks, etc. -- that utilities want to link up as a whole, she said.
GridMaven’s new cloud-based platform ties wireless or wire-line networks into a single view, and then monitors them for faults -- the communications kind, not the electrical kind. The idea is to catch dropped devices, missed data and other such problems, not just within a single network -- say, the smart meter system -- but across all the networks: grid automation, outage management, demand response, workforce communications and all the rest.
As for controlling the networks, the platform could theoretically “push” commands into networked grid devices as well as monitor them, but, Meadors said, “I don’t know if, as an industry, we’re there just yet."
The distinction between monitoring and control is a critical one. Utilities have traditionally operated in siloed networks -- one for outage management, another for demand response, another for distribution grid equipment, etc. Smart meters have increased the communications and data workload by orders of magnitude, and few utilities are ready to take on the telecom-sized task of monitoring it all.
Whether they are also willing to cede control to a master network is another matter. Cisco announced a slew of new smart grid products on Tuesday, among them a “Cisco Connected Grid Network Management System,” which promises “end-to-end monitoring and control of the network communications.” But Cisco hasn’t given many details on just how much control will come with its “enterprise-class visibility" built to scale to up to ten million endpoints.
The Competitive Landscape
One thing’s for sure: Cisco and SK Telecom’s entry into the smart grid NMS market marks the start of a defining new stage of the smart grid, according to GTM Research senior smart grid analyst Emma Ritch. That’s because the companies could open a market for a solution to a problem utilities are only beginning to recognize, let alone manage -- that of proliferating smart grid networks.
Ritch drew a contrast between an NMS and a network built to manage just one class of smart grid gear, such as smart meters. The latter are more properly classified as an element management system, or EMS, she said, and since vendors are promising to manage their own gear, not anybody else’s, they have had little incentive to invest in making them more easily interoperable.
“We’ve seen utilities with more than a dozen platforms to manage, and each one has its own software,” she said. “Twelve platforms to manage each time there’s an incident means that a lot of valuable data isn’t being captured. To get full functionality from the smart grid, you need full functionality to be shared across your networks.”
Cisco and SK Telecom aren’t the first entrants to the market, she noted. Telcordia, now owned by Ericsson, has a smart grid NMS offering. Startup Proximetry, which recently landed smart grid bigwig Andres Carvallo as chief strategy officer, is aiming at much the same market, Ritch said.
IBM has a host of smart grid projects aimed at helping utilities integrate their disparate networks as well. Smart grid services offerings from the likes of General Electric, SAIC and Lockheed Martin presumably have some way to tie their views together. But it’s hard to match the deep networking expertise of an SK Telecom or a Cisco, she said.
GridMaven itself only has about 8 employees right now, but it has its parent company behind it for the long haul, Meadors said, along with its proven track record in network management systems at home. SK Telecom is also a partner in Korea’s Jeju Island smart grid pilot project, giving it some hands-on experience on the field.
Cisco, for its part, has been promoting the “network of networks” concept ever since it launched its smart grid business in 2009, which makes its NMS announcement more or less a foregone conclusion. As far as real-world smart grid networks, it’s rolling out about 2 million smart meters with partner Itron at utility BC Hydro, and says it will link smart meters and field-area devices over a single platform there. Other big clients include Duke Energy, Ausgrid and State Corp. of China, to name a few.
What’s the Market?
GridMaven, Cisco and others aren’t saying how big the smart grid NMS market could be, and Ritch agreed that it’s hard to gauge it at present. But typical network deployments may put up to 10 percent of overall project cost into NMS-type features, she noted, and U.S. utilities are expected to spend $2 billion or more per year on smart meters between now and 2015, according to GTM Research.
Of course, not every utility or smart grid deployment will require the master control capabilities of a network management system -- and others may have a hard time figuring out whether they do or not. After all, it’s hard to know just how faulty one’s disparate networks are until you’ve invested the money in a system to find out. Nor are vendors likely to advertise their own failures to deliver on their networking promises.
But we’ve seen rumblings from the industry that all the smart meter deployments of the past few years may be in need of some tune-ups. “Utilities have told me that vendors have made promises about their ability to manage their AMI systems that haven’t been realized,” Ritch said.
Meadors agreed that utilities have reported running up against problems with their smart meter networks, both in bridging the gaps with the communications technology of choice -- RF mesh, mostly -- and in getting their performance monitoring capabilities up to snuff.
Beyond monitoring, NMS platforms could lay the groundwork to run all kinds of applications. Cisco is likely to make its newly launched NMS a control point for both its new field-area network offering, which ties together smart meters, distribution automation and other systems.
GridMaven, for its part, is advertising a billing management application to help rectify the inevitable problem of lost or corrupted data infecting a billing systems, which can lead to overbilling and lots of customer relations problems. But Meadors said it’s too early to talk specifics on that product and what kind of monitoring or control capabilities it might have.
But while Meadors saw a longer-term potential in expanding GridMaven’s monitoring role to add new functionalities to a utility’s networks, she wasn’t ready to talk specifics.
“We’re very much defining a market here,” she said. “It’s a complicated process, working closely with a utility to help them understand how they can tie their networks together, given how they want to use their networks and how their business is structured.”
Ritch noted that one source of competition will likely come from existing utility networking vendors, such as Silver Spring, Trilliant, Grid Net and the major meter vendors. Silver Spring, for example, is seeking to build on its leading position in smart meter networking by adding distribution automation, demand response and other functions. Presumably it will also be under pressure to supply utility customers with monitoring and diagnostics that prove its networks work across all those applications as well.
One big test for the top-down NMS approach to smart grid convergence will be in how players in the market evolve from simply monitoring to actually improving network performance, Ritch noted.
“This market is absolutely exploding,” she said. “But it’s a matter of creating value for the grid.”