The shopping season is upon us.
ABB (NYSE: ABB), the Swedish/Swiss conglomerate, today announced that it is buying Insert Key Solutions, which specializes in asset management and control software for power plants and utilities. The intellectual property of IKS will complement its $1 billion dollar purchase of Ventyx back in May. With the software from these two companies, and its own software, ABB hopes to build a portfolio of services that can monitor or manage power distribution and consumption from central utility offices to your home.
Admit it: You didn't even know ABB existed four years ago, but now they are one of the four horsemen of the smart grid along with Siemens, General Electric and Schneider Electric. If you have a startup that you needs a large partner, or someone to acquire them, it should be one of the first names of your list. Last week, it spent $4.2 billion on Baldor Electric Company, which makes efficient electric motors. In September, it invested in Power Assure, which makes software for managing computing loads and curbing energy in data centers.
Ventyx, Baldor, Insert Key and Power Assure are all U.S.-based companies by the way.
Meanwhile, serial acquirer EnerNoc (Nasdaq: ENOC) is on the move, too. It bought Global Energy Partners, which specializes in demand-response services. EnerNoc's stock in trade is demand response. The big difference between the two is that EnerNoc is primarily based in the Northeast while Global's clients are based in the western half of the U.S. With the acquisition, EnerNoc can build a nationwide demand-response network.
Global also works in a region with utilities with large renewable portfolios. The acquisition will thus allow EnerNoc to better understand how to manage intermittent power production, and thus eventually further expand its service offerings.
Like ABB, EnerNoc wants build a portfolio of management services that can feed off each other. Its DemandSmart services can handle anything from demand response to building energy management.
In all, EnerNoc has bought nine companies, including Cogent Energy (building management) and eQuilibrium Solutions (carbon accounting). EnerNoc has yet to buy a lighting management company. We expect some of them to be bought soon.
Last week, it announced it was going to work on a smart city project in London, marking its foray into international markets.
What's driving all this? State legislatures are prodding utilities to invest in demand response services and energy efficiency. Large building owners also want to curb their energy bills. Software vendors and service providers in turn are responding by trying to build comprehensive portfolios of services. If all you have is a nice carbon management platform, you just might be out of luck. Luckily, demand response, building management software and carbon/energy accounting all complement each other, so it's possible to merge these different products together in a cohesive service.
Comverge, Tendril Networks (acquisition in October), Silver Spring Networks, ENXSuite, Schneider, Siemens and others are assembling similar service porfolios. Ultimately, demand response services -- which are actually employed very infrequently to curb power -- will evolve into demand management services, which will be used on a more continual basis to save power.
Companies in these fields also benefit from the fact that they can garner revenue from utilities -- by harvesting "negawatts" for them during peak periods -- and their own customers by selling them efficiency services.
The smart grid shopping spree started back in November 2008, but has been speeding up in recent months.
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