By Michael Kanellos
German engineering giant Siemens (SI) is buying Energy4U, a consultancy that helps utilities implement management software that is made by SAP. It's an example of one way smaller companies and startups can fit into the emerging smart grid industry by helping two giants talk to each other.
Siemens didn't disclose what it paid for 60 percent of the Essen, Germany-based Energy4U, which serves utilities in Germany, Austria, Switzerland and Croatia. The acquisition is set for October 1, pending approval by German antitrust authorities.
Siemens and SAP's relationship in Europe could be compared to the one between transmission and distribution bigwigs like General Electric (NYSE:GE) and ABB and the host of IT giants – IBM, Cisco (NASDAQ:CSCO) and Oracle (NYSE:ORCL), to name a few – that are now collaborating on smart grid projects in the United States.
GE, Siemens, ABB, etc. have the gear to control what the electricity grid does. SAP, IBM, Oracle and the rest want to give utilities software to make it easier and more useful. Cisco wants to provide the network between those two sides.
Smart grid startups haven't tackled the heavy engineering and manufacturing side of the business that companies like GE, Siemens and Swiss-based ABB dominate.
But many – Silver Spring Networks, Trilliant, Ambient, Current Group, and others - are, at least in some ways, within the smart grid networking realm that Cisco is eyeing. Another host of software startups – eMeter and GridPoint are two notables - are handling pieces of the smart grid functions that IBM, Oracle, SAP, and potentially Microsoft and others, would like to control.
And that's not to mention the plethora of home energy management startups that may face GE, Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG) and others in the future. Or the ongoing standards-setting work that's expected to see most vendors comforming to certain industry-wide ways of integrating their products and services. In that environment, it's good to be able to fit in.