Cisco’s New Building Energy Management Strategy

You probably weren’t on Cisco’s fourth quarter earnings call last Wednesday. And even if you were, there’s a good chance you would have missed Cisco’s Chief Operating Officer, Gary Moore, casually make the following statement:

“We communicated this week the decision to adjust our investments in our energy business to match the needs of the market by focusing on energy management through standards-based solutions and will no longer be investing in premise energy management devices. As part of these efforts, we’re exploring options for our Network Building Mediator and Mediator Manager product line.”

In short, Cisco is rethinking a number of key components of its energy management suite. I would stop short of saying that Cisco is making a full exit from commercial building energy management given that it is retaining and enhancing several key elements of its BEMS platform – including EnergyWise. Perhaps the move could be better described as a shift away from “reinventing the wheel” with energy management, which so many of its channel partners and competitors have made solid strides on, rather than a shorting-out of a central part of its energy management strategy.

Just over two years ago, Cisco launched the Network Building Mediator and Mediator Manager line to build on its EnergyWise energy management platform. Over the last few years, the company has been continuing to enhance the capability of these products, expanding from systems for single buildings to comprehensive, end-to-end systems that enable global energy and facility management.

Over the last two years, however, the commercial building energy management space has become increasingly crowded by a number of good entrants, both large, established building systems players and systems integrators as well as start-ups. Cisco, it could be said, was taking a big bite by developing its own offering rather than honing its usual devices and architectures for smart building applications. When it acquired Richards-Zeta Building Intelligence in January 2009, it was clear that Cisco’s ambitions were big and different from its status quo.

Just a few weeks ago, Ed Richards, the former director of global business development of Cisco and one of the founders of Richards-Zeta, left the company. It would seem that his departure would all but herald Cisco’s exit from building energy management.

Yes, Cisco will almost certainly look to offload the Network Building Mediator and Mediator Manager in an effort to cut its losses. But that isn’t tantamount to an abandonment of its building energy management strategy. What we may end up seeing is a future in which Cisco aims to complement rather than redouble the offerings of other building energy management players, such as equipment vendors (JCI, Honeywell, Siemens, et cetera), IT companies (such as IBM, Microsoft, et cetera) as well as startups such as Optimum Energy and BuildingIQ.

In doing so, Cisco will be able to play to its own strengths – networking architecture development and sales of premium quality devices – while leaving many aspects of building energy management system integration to others. Perhaps this adds up to something less than Cisco originally envisioned, but it’s a safer bet at this point in the nascent commercial building energy management market.

There’s much more to say on the implications of Cisco’s home energy management offering, which my colleague, Bob Gohn, will follow up with shortly.

Article by Eric Bloom, appearing courtesy the Matter Network.

Skip to toolbar