Photo via mpeterke via Flickr Creative Commons
The smart grid is made up of many components, from the power source to the utility to the end user, covering everything from the meters installed in homes and the appliances it monitors to the back-end data management at utilities. The industry has countless opportunities for hardware and software companies to find a niche and create important products and services that help streamline the entire system. But one component is especially important -- helping utilities launch and manage their smart grid systems. So it is no wonder that a new report from Pike Research shows the smart grid services industry will bring in $4.3 billion in the next five years. Pike Research reports that utilities are more commonly seeking out consulting and implementation services from service vendors to assist with their efforts in deploying and managing smart grid systems.
"Because smart grid managed services is an emerging and nascent market, it is relatively small with an estimated worldwide spending of $470 million in 2010. It is, however, growing very rapidly so that by 2011, Pike Research forecasts that the smart grid managed services market will reach $821 million, a 75% growth rate over 2010. Growth is forecast to continue to be strong and this market will eventually become a multi-billion market opportunity for managed service providers by 2015."
The emerging regulations and standards, the data on consumer impressions and uses, changes in brand image of utilities who push forward with smart grid services and other issues all factor in, and utilities need help. But the primary push for utilities seeking out services -- and therefore boosting the potential of the smart grid services industry -- centers around economics, as a smart grid ultimately lowers operating costs for utilities and makes it possible for them to more easily integrate renewable energy sources into the grid.
With such a forecast, it's no wonder that everyone from small start-ups to giants like Cisco are all wrangling for position among utilities looking for assistance in managing a new frontier in the energy grid. Though we heard recently that security will be an even bigger boom for those in the smart grid business, with an estimated $21 billion expected to be invested by 2015.
Spending in the smart grid industry on the whole is expected to plateau at $35 billion by 2013, though Cisco alone identified at least $20 billion in potential opportunities for businesses.
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