Cisco Adds to Its Impressive Energy Management Products

by: Greentech Media

by Michael Kanellos

Cisco (NASDAQ:CSCO) is graduating from energy control for a building to energy control for several buildings.

The company today unfurled Building Mediator Manager 6300, which allows a company to monitor resources in several buildings at once. Earlier products like the Building Mediator Manager 4800 and 2400 allowed companies to manage resources in a single building.

"You can think of it (the 6300) as a control panel for hundreds of thousands of buildings," said Marthin De Beer, senior vice president of emerging technologies at Cisco, in a teleconference. The system also lets companies monitor IT and data center power management as well as building management.

"You can effectively manage your entire enterprise," he said.

The company also introduced a home energy management console. It will team up with Duke Energy (NYSE:DUK) to use the console on demand response programs. While Cisco historically has been considered a company that sells corporate equipment, it has become (largely through acquisitions) a big player in set-top boxes, DSL boxes, cell phones and video cameras. John Chambers is lurking in your living room and you may not have even noticed.

The commercial and home technologies follow up on the plan laid out in January 2009 when Cisco introduced EnergyWise, the company's energy management platform. EnergyWise was initially targeted at curbing power consumption in telephones and data centers. Building management tools followed later that summer.

The building push in part was paved by the acquisition of Richards-Zeta Building Intelligence, which had created a system for monitoring and curbing power consumption in buildings, to coincide with the launch of EnergyWise. Ed Richards, the co-founder and now a Cisco employee, says that most building owners lose "30 percent of their energy off the bat" in unmanaged buildings.

He's probably right. Buildings consume 40 percent of the energy in the U.S. and about the same level worldwide. That energy isn't particularly consumed in an efficient manner: lights stay on all night, heaters and air conditioners often run simultaneously, and most office buildings aren't connected to demand response programs. If you've ever seen someone wrapped in a Snuggie at their desk in the middle of summer because the air conditioner was set to meat locker levels, you've seen poor building management in action. (Cisco itself saved over $1 million by turning up the thermostat slightly in some of its labs.)

Here's the Churchillian equation: building management can provide some of the greatest gains for the lowest cost with the fewest Nobel Prize-quality breakthroughs in the shortest amount of time.

"The payback time is often less than a year for building management systems", he added. Another great thing about building management versus making smart grid eqiupment: there are millions of customers globally. Smart grid companies, by contrast, have to sell their tools to a small, finite number of conservative utilities.

The picture for home energy control is less clear. While energy can be curbed in homes, the total savings will be far less, which means consumers and utilities will be far less interested in investing in wiring homes for energy conservation. A speaker at The Networked Grid in April noted that Americans only spend six minutes a year studying their utility bill. Plus, the number of home energy consoles has ballooned in recent years: a wide variety of manufacturers produce them.

Cisco's further push into building management is both good news and bad news for start-ups. On one hand, it will make it tougher for companies like BuildingIQ, Optimum Energy or other start-ups to sell their software. Cisco can bundle its offerings with other products and it is a trusted name. Johnson Controls (NYSE:JCI) and IBM teamed up last year to beef up their building management offerings. EnerNoc (NASDAQ:ENOC), the demand response leader, moved into building energy services late last year.

The good news? Cisco, along with Johnson, Honeywell (NYSE:HON) and IBM, like to buy start-ups. Some of the companies that are likely on someone's shopping list: Adura Technologies, Lumenergi, Digital Lumens, Redwood Systems (lighting); eMeter (software applications) BuildingIQ, Optimum Energy (HVAC control); EcoFactor, EnergyHub, Tendril (home control); and EPS (industrial equipment.).

Disclosure: No positions