Cisco: Smart grid is 'the next phase of the internet'

Cisco is gearing up to invest aggressively in smart grid technology, which it sees as the successor in opportunity and scope to the internet, the networking company's chief executive John Chambers has said.

At the Cisco Live show in London on Tuesday, Chambers told ZDNet UK that the smart grid market presents an opportunity at least as big as the original internet did in its infancy and that the networking giant will invest "aggressively" in smart grids.

"This is the next phase of the internet. Instead of moving around zeros and ones, you're moving around electricity," Chambers said. "You can differentiate it by carbon emissions, you can differentiate it by cost, you can allow people to select what type of electricity they use based on emissions, and even paying differently for it."

Smart grids make it possible to wire homes, businesses and associated hardware devices into unified data networks to garner specific, targeted information on power usage.

"We think it could be as big as the original phase of the internet, and it isn't just about the grid — the superhighway — it's all the access points and all the devices that feed in because through that you can connect the devices, service them and support them in a different way," Chambers said.

In September, Cisco revealed plans to purchase Arch Rock, a company that has technology for collecting information from mesh networks of IP-based wireless sensors — technology suited to smart grids. Cisco also announced at the time plans to collaborate with Itron on IP-based smart grids.

However, smart grid security remains an issue, according to Chambers. The smart grid "has 360 protocols and no security...you want to take down a nation, take down their electrical grid."

Cisco has started to win $5m (£3.1m) and $7m accounts in the smart grid space, Chambers said. However, he anticipates that the smart grid push, which Cisco started in mid-2009, will take years to come to profitable fruition. "You have to invest early," he said.