5/21/2009 -- Cisco Systems Inc.'s announcement this week of a new "Smart Grid" secure network infrastructure offering takes it further afield from its enterprise networking roots. It's a move that's nonetheless consistent with the Unified Computing System (UCS) strategy that Cisco outlined earlier this year.

Cisco positions "Smart Grid" as a kind of IP-based end-to-end communications fabric that runs the gamut from power generation (in the back end) to power management and consumption in both the enterprise and the digital home.

There's a lot at stake, according to Cisco: Over five years, it predicts, the market for "Smart Grid" communications infrastructure products will reach $20 billion annually. At a time when nearly all businesses seem to be tightening their purse strings, why does Cisco think companies will free up IT dollars for new Smart Grid-enabled gear?

For starters, it cites research from the Electrical Power Research Institute (EPRI), which claims that power outages cost U.S. companies "about $50 billion" annually. A Smart Grid, on the other hand, can both reduce the cost and duration of outages and, per the EPRI's estimates, could reduce greenhouse gas emissions (GHG) by between 60 to 211 million metric tons annually by 2030.

Elsewhere, Cisco cited several pilot studies (including one by the DoE's Pacific Northwest Laboratory) which suggest that a Smart Grid infrastructure can cut household energy consumption by between 10 and 15 percent.

There's a more direct economic incentive, too: The GridWise Alliance, an industry consortium of which Cisco is also a member, claims that Smart Grid investments could directly generate as many as 280,000 new jobs.

Where does Cisco fit into all of this? It proposes to bring its experience in what it describes as "intelligent" and "resilient" network design to bear in the infrastructure segment. "Networking technology will serve as the platform of a smart, more secure energy grid for the 21st century," said Cisco Chief John Chambers in a statement. "Cisco is uniquely positioned to provide a converged Smart Grid communications fabric and to assist our utility customers with the kind of business transformation that will enable the efficient, effective transmission of energy and deliver entirely new, environmentally-friendly services to consumers."

Cisco plans to deliver a range of different Smart Grid products, including Transmission & Distribution Automation, and Home/Business Energy Management services, along with Smart Grid-enabled Cisco switching, routing and software offerings. Cisco says it's working with "a number of leading utilities around the world" and cites its work with General Electric (GE), Florida Power & Light and Silver Spring Networks to build out a "comprehensive" Smart Grid deployment in Miami, Fla. --Stephen Swoyer