Once aligned strategically, IBM can then act as a conduit for bringing the new ideas to a larger consumer base than the start-up company could do on its own. Therefore, if IBM is promoting a technology, one can bet that a methodology for bringing that innovation to market is already being developed.
Smart grid technologies are attractive from multiple perspectives. Firstly, it is a fact that a significant amount of power in the United States is wasted. Arun Manjumar, of the University of California-Berkeley, said recently that between 50 and 60 percent of the power consumed in America (around 100 quadrillion BTUs) is lost as waste heat or elsewhere in the transmission process before it is consumed. Smart grid technology, which applies networking techniques to the power grid, could dramatically reduce the amount of wasted power.
Smart grid technology also fits nicely into the traditional venture capitalist model for developing companies. There is no need for the huge investments to build factories, unlike solar and bio fuel companies. Smart grid firms are typically developing software or networking devices, such as smart meters, that manage and monitor various points of the power grid.
As it stands right now, the power grid needs a lot of work before it can be accurately referred to as a “smart grid”. Today’s “dumb grid” was built to do little more than send electrons in one direction; it cannot handle realistic two-way communications.
“Smart grid may be the largest cloud,” added Clark. “It will be expensive, but that also means it will be lucrative” for companies that sell networking devices.
Clear standards for the future smart grid have not been developed. This represents an enormous opportunity for start-up companies. Energy storage, for one, is a lucrative area. Currently, most companies mention placing energy storage facilities where renewable power is generated. Some companies are concentrating on how to store power where it is consumed, within the batteries of soon-to-arrive plug-in hybrid vehicles, for example.
It is likely that the Genentech market will develop much differently than the IT market did. For one, the computer and networking market base was huge: businesses with as few as 10 or less employees needed the technology. Utilities, on the other hand, are the market base for the smart grid and will undergo extensive tests before widespread adaptation of the technology.
According to Clark, this will be good for IBM. Take the example established by Pacific Gas & Electric. The huge utility in California doesn’t want to deal with a bunch of start-up companies. Instead, they are taking a look at large, proven companies that can integrate the technologies developed by the smaller firms into an effective platform.
One thing is for sure, Smart Grids and its associated sub developments like AMI and Smart Meters are the future of the Utility and IT industry and a step closer to a global SkyNet. This is a true marriage of technology. Were the great minds of Benjamin Franklin, Thomas Edison, John Logie Baird, Guglielmo Marconi and Tim Berners-Lee to get together at a Starbucks, Smart Grids would be the end result.
In order for the Smart Grids to succeed, it needs a set of Global Standards. This is not simply an interoperability issue comparable to the Likes of Blu-Ray and HD-DVD, this is a convergence of a multitude of different technologies and herein lies the secrets to its success or indeed its failure. Thankfully most of these individual technologies come with their own set of standards adopted by the world at large; however a standard on how these technologies gel together will be key. An Industry level architecture is required to be the building blocks in which the other technologies can develop onto.
The meter manufacturing companies and utilities need to decide on a back to base communication standard for the Smart Meters, likewise a home base communication standard will be required in order for integration with the likes of industrial machinery, heating and air conditioning and of course home automation equipment. In the absence of a de facto standard a true smart grid will never be achieved.
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