Implementing the “smart grid” — adding more intelligence to the electricity distribution system — should be a national imperative, says Cisco’s New Zealand country manager Geoff Lawrie.
The networking company has chosen the smart grid as one of its priority areas for investment internationally. Ageing equipment and the impending retirement of many of the experts who installed that gear coincides with increasing criticality of electricity supply to commercial operations, says the chief technology officer of Cisco’s emerging markets technology group, Guido Jouret (Computerworld, October 12).
See also: We're a long way to smart already, says Orion chief
The failure of Air New Zealand’s electronic booking systems earlier this month, while not a matter of national grid distribution but of local generator failure, nevertheless underlined the mission-critical nature of electric power.
“We’ve got an energy demand that we understand is escalating, our energy costs are going up,” says Lawrie. “We understand that in order to drive productivity [a frequently stated local economic priority] our energy footprint is going to grow at the same time as we’re trying to reduce carbon emissions.
“I’m sure I can make a national business case for investment in smart grid,” he says.
Cisco’s emerging markets group has identified nine confirmed areas of “market adjacency” — new markets which exploit some of the hardware, knowledge and skills already in Cisco’s repertoire.
“The idea is that there are market extensions available to us where our core capability in networking can be extended into a significant new marketplace — a new geographic area, a specific solution set, a vertical industry or whatever,” Lawrie says.
Jouret outlined the major criteria Cisco uses for choosing a new venture.
Potential for $US1 billion revenue within five to seven years, is one. Many companies, he says, disperse their effort unproductively by investing in too many markets of insufficient size
Timing is another. This does not necessarily mean being first to market, though, he says.
“The iPod wasn’t the first mp3 player and Google wasn’t the first search engine.”
A new disruptive factor in the market is another criteria. Interest in telepresence, for instance, will increase though recessionary search for cost savings and even more through the new awareness of a need for lower energy consumption, he says.
Adjacency is also important. Too many companies make “too bold a leap” into markets where they have no significant transferrable knowledge.
Cisco also looks for a strong point of difference in its offering. There’s no point in merely imitating what someone else has already done, Jouret says.
Besides smart grid and telepresence initiatives, Lawrie sees the physical security area as a promising market for New Zealand. More than $80 million is spent here on devices such as surveillance cameras every year, he says
“There’s no company that has more than one or two percent market share; it’s a totally [fragmented] industry in terms of ownership and it enjoys none of the benefits of the vast investment that’s gone into IP networking. It’s still all analogue; it mostly goes to VCR recorders.”
An IP-based video camera is a fraction of the cost; and you can put it on a network and send the data to other monitoring stations, including mobile devices, he says.
Moreover, the resulting awareness of how people move through a building — especially a retail premises — can be put to use in analysis of direct use to the business outside the security application.
• Stephen Bell travelled to Cisco’s Brisbane conference courtesy of Cisco