Silver Spring Networks, one of the earliest smart-grid companies, was founded in 2002 by software engineers who saw a need for standardized technology that would enable systems throughout the grid to communicate with each other. “You want a secure network infrastructure that can be connected to an arbitrary number of devices—thermostats, displays, electric vehicles, anything that plugs into the grid,” says Silver Spring’s chief technology officer, Raj Vaswani.
So the company developed devices, services, and software to help monitor and manage energy supply and use for both consumers and utilities. Today, its products can be found in a number of projects in the United States and Australia. Oklahoma Gas and Electric, for example, has built its communication chips into smart meters and uses its software to read them. Consumers can monitor their energy use by way of a Web portal that Silver Spring provides. The utility now manages demand so much better that it has been able to shelve plans for two new power plants, which would have cost up to $320 million.
Silver Spring raised $100 million in venture capital in December 2009, bringing its total funding to around $250 million. And it has been broadening its scope beyond meter networking and into software, which has a higher profit margin. This expansion has the potential to cause problems. “There’s a risk that they are growing faster than they can support,” says Steven Minnihan, an analyst at Lux Research.
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