Microsoft: Hohm of the Smart Grid?

ATLANTA  - July 1, 2009 – Like the ‘big kid’ at the summer pool party doing a cannon ball, Microsoft jumped into the smart grid deep end this past week with its announcement of the Hohm energy management solution.  With fortuitous PR timing coinciding with the Department of Energy’s release of final guidance for smart grid stimulus funding, Hohm has the potential to become a market game changer in the space and positions Microsoft to splash water all over its rival Google’s Power Meter.

While not known for focusing on specific business verticals, Microsoft has quietly built an increasing focus on the utility market for several years now. Not long after Bill Gates took a minority interest in Otter Tail Power and his buddy Warren Buffet bought Mid American, Microsoft hired former Edison Electric Institute CIO and market veteran Jon Arnold to head up and sharpen its utility efforts. Arnold has since added to a team of utility technology leaders emphasizing business process expertise and technology partnerships with key players such as Areva, SAP and OSIsoft among others. Microsoft has focused on utility technology value creation rather than on policy and lobbying -- the main utility focus to date of rival Google.

As Microsoft evolves its utility architectural strategy, Hohm positions the company as a secure and nearly ubiquitous bridge between legions of browser user consumers and utility back office applications. This is a key competitive advantage not only over Google, but also over start ups and established niche competitors in the home energy presentment/portal marketplace.  Context rich power consumption data woven together with utility driven price, usage pattern and service data will be much more valuable to consumers than local, wirelessly delivered consumption data served up flatly and absent any utility connected context.

Hohm’s launch leverages Microsoft’s Seattle-based backyard advantage in several other ways. First, Microsoft proactively engaged both of the smart metering market leaders in Itron and Landis+Gyr as partners while also engaging the support of local utilities Puget Sound Energy and Seattle City Light.  Second, Puget Sound Energy has a completely deployed wireless metering platform and years of detailed consumption data for customers that could be deployed across the network. Finally, Puget Sound Energy has a robust meter data management system to support Hohm.

It’s not a stretch to imagine that tens of thousands of Microsoft employees are “at the ready” to Beta test Hohm at home. Their utilities are uniquely positioned to serve up the data that will enliven the solution. Finally, Microsoft is positioned to leverage its core franchise of office applications and the windows operating system to tie together consumers and utilities and create mutual value for both. 

Seattle is primed as one of the cities to watch in the evolution of the smart grid. Adding to Seattle’s smart grid technology leadership 'mash-up', consider that Seattle City Light is also deploying Oracle’s suite of enterprise utility applications. Maybe Larry Ellison is poised to do a cannon ball from his yacht out in Puget Sound?

(Disclosure Note: Both Landis+Gyr and OSIsoft are McDonnell Group, Inc. clients)

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