Cisco and Itron team up to build "definitive" smart grid platform

Networking giant Cisco and smart meter specialist Itron announced yesterday that they have joined forces to deliver an IP-based communications platform to the smart grid market.

The two companies have said they want to create a definitive platform that establishes a standard for smart grid infrastructure and technologies.

Under the terms of the deal, Itron will license and embed Cisco IP technology in its meters and also distribute Cisco's software and equipment.

The two companies said they will also jointly develop a standards-based, highly secure technology that allows smart meters and other automated smart grid systems to integrate with the latest version of the internet protocol, IPv6.

According to experts, IPv6 offers several benefits over the current and widely used IPv4 standard, notably integrating network security into its framework and allowing for simplified processing of data by routers and other network devices.

The companies claim the partnership will help advance more consistent and reliable delivery of energy across the electric distribution system and into homes and businesses, while also helping to ensure consistent and interoperable wired and wireless communications among the various components of the smart grid.

Laura Ipsen, Cisco senior vice president and general manager for the Smart Grid business unit, said: "The alliance between Cisco and Itron represents a major step forward in the realisation of a modern, more intelligent energy infrastructure. As a result, utilities will benefit from an energy grid that is more secure, scalable and reliable, as well as solutions that are easier to maintain and able to support future needs."

Analyst firm Pike Research recently predicted that the market for smart grid infrastructure will be worth $200bn (£130m) by 2015, but it also warned that the anticipated spending boom is being held back by the absence of standards in the industry.

Currently smart grid communications vendors use a variety of networks, often proprietary, to collect and send data, making it difficult to guarantee robust security and Interoperability. The alliance between Cisco and Itron could potentially reduce costs for energy companies and customers because smart grid vendors would all have to plug into the same system, forcing them to compete more openly with each other.

So far Cisco and Itron have refused to say when the fruits of their collaboration will come to market, but some market watchers still hailed the move as a major step forward in Cisco's smart grid strategy.

Other analysts downplayed the potential significance of the deal, pointing out that the agreement is not exclusive and could pave the way for Cisco to forge alliances with other smart grid networking companies.

However, Itron's stock, which has seen around 19 per cent wiped off its value in the last three months, bounced back strongly on the news, rising by around 9 per cent yesterday to reach $58.85.