Will the Smart Cloud Bypass the Smart Grid?

Washington, D.C., August 17, 2014 – Samsung Electronics last week announced that it has acquired a Washington-based home electronics firm, SmartThings, for an undisclosed sum. The move is further evidence that the electric utility industry’s still forming visions of a smart grid to control customers energy use could be bypassed by wireless technology and the “Internet of Things.” Under Samsung’s vision, customers would control their smart homes and appliances, not a central utility company.

SmartThings, founded in 2012, according to the Samsung announcement, “gives people power to monitor, control, and automate their homes from wherever they are through a single mobile app. SmartThings’ open platform supports more than 1,000 devices and 8,000 apps create by its community of device makers, inventors and developers.” Founder Alex Hawkinson said, “As an open, standards-agnostic platform for the Internet of Things, our vision has always been to innovate, build and make the world smarter together.” The company has raised $15 million in venture capital.

An article in the Washington Post noted, “Samsung has been ramping up its efforts in the so-called ‘smart home’ market during the past couple of months. In July, for instance, it announced a partnership with several competitors – including Nest Labs, the thermostat startup Google bought for $3.2 billion in January – to develop the Internet of Things, a technologists’ term for a connected network of sensors and devices. Samsung, ARM, Freescale Semiconductor and others aim to develop technology to connect more than 250 devices on a low-power network with Internet cloud access through a new non-profit, called the Thread Group.

Smart appliances are beginning to appear on the market, such as the Nest Labs Wi-Fi enabled thermostats and smoke and carbon monoxide detectors. Another new product on the market is DropCam, a small, high-definition, Wi-Fi enabled video camera that can be used for real-time home security and monitoring and also can store up to a month’s worth of video in the cloud. In June, Nest Labs announced an agreement to buy DropCam for $555 million.

As a long-time skeptic of the smart grid movement (I’ve always viewed it as mission search by a stagnating electric industry), I find these latest developments gratifying. They can give consumers real control of their homes, where they, not the utility, exercise the smarts.

Also, I’ve argued that the job of the utilities should be a more robust and reliable transmission and distribution grid, a strong grid rather than a smart grid. The smart grid always struck me as a diversion from that central mission and an added threat to reliability.

That’s not to say there will be no problems with the smart cloud and the Internet of Things. There will be, including security and privacy over Wi-Fi networks. But the consumer-controlled system won’t offer mammoth pathways to hundreds of thousands or millions of customers through just one hack.