Smart Grid: The Next Big Thing

Posted on May 11th, 2009 by admin in Smart Grid

After having watched so many “Next Big Things” emerge into the markets over the years, we have developed a viewpoint that usually serves well to see what is in fact next. The key idea is the Next Big Thing is not a surprise, and actually arrives quite well developed. Traction is observable. The Next Big Thing has always already arrived.

Two easy examples: cell phones and the internet. Both had substantial players, plenty of customers and industry conferences way before the general business press paid much attention, and certainly before the public understood the enormity of them. I’ll always remember a seminar offered by a guy named Jerry Lucas who produced two days on “Commercializing the DARPA Network”—in the late 1980s! The Internet exploded around 1993 as the Mozilla browser took hold. Jerry knew nothing of browsers, but the DARPAnet was a real opportunity to him and many others, then.

Now, a Next Big Thing is the Smart Grid. Independently of the fact that president Obama has marked the industry with billions of government dollars, the technologies, markets and business models are advancing rapidly.

What Is the Smart Grid?

The electric power grid, whose basic architecture is over 100 years old, is a system that connects power generating plants to consumers through a vast network of power transmission lines and switches.

The grid has a variety of measurement and control systems attached. However, it is severely limited in its ability to provide utility companies with important functions such as:

  • Indicators to operators as power capacity is approached
  • Warnings when outages are imminent
  • Locations where maintenance is needed immediately
  • Rapid diagnosis of large scale power outages

In other words, we don’t have a “smart grid” that can measure itself and its power demand and adapt to produce desired performance.

Smart Grid Investment Opportunities

Smart Grid requires new technologies and new businesses. These have been developing steadily under the business mass media radar. It’s time to take a close look. So we begin a series of posts about Smart Grid business and investment opportunities.

Collaboration with

Beginning our series focusing on Smart Grid also marks a collaboration with  Steve Bell, a Silicon Valley entrepreneur and tech insider who runs PulseOfTech, a hot blog focused on connecting start up firms with angel investors. We will write a series about technologies of the Smart Grid, particularly those of Smart Meters and the associated services and software. PulseOfTech readers are more interested in engineering and funding  than on securities market investments. That’s our job!

To learn more about what the Smart Grid is and why Smart Grid is a really big deal, check out our post at:

RocketCap post on why Smart Grid is a big deal

The Smart Grid Companies

To understand Smart Grid from an investment viewpoint, let’s begin by listing the industry players. These are firms that operate the grid (the electric utilities) and the firms that supply the stuff to design, build and operate the grid (the suppliers). Some of these players are publicly traded. Most of these players are privately held. The important public ones we have identified are listed in Table 1. Note that the firms in bold text are electric utility companies. By no means are most utilities directly involved in advancing the Smart Grid, so the listed ones are leaders. They all are conducting some form of trial. The other firms are suppliers of hardware and software for the Smart Grid, and usually sell to the utilities, but sometimes to other suppliers.

Table 1: List of Publicly Traded Companies Supplying or Using Smart Grid

Public Smart Grid Firms

Public Smart Grid Firms

These 21 public firms all participate in Smart Grid value chain. Six other public firms also are vendors for Smart Grid, but in our judgment are probably not as strongly focused as are the 21 others on making Smart Grid a major business for their firm. These excluded six are:

  • Accenture
  • Alcatel-Lucent
  • AT&T
  • Microsoft
  • SAP AG
  • Sharp Laboratories of America,

We have identified another 52 privately held firms that focus on Smart Grid. These are listed in Table 2.

Table 2: List of Important Private Firms Supplying or Using Smart Grid


Private Smart Grid Companies

Several of these are quite small, including several startups. We will discuss these in later posts. The startups, of course, are important sources of innovative technologies and products.

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