Sunday, August 30, 2009

Are We Ready for the -Next- Generation of Security Concerns for the Smart Grid?

Over the past several months, interest in security and the Smart Grid has been growing, and much of the focus has been on trying to raise some baseline interest in ensuring that the millions of meters and interconnection points are specified, deployed, and managed with some sense of urgency around their security.

In re-reading David Leeds' excellent piece on next wave venture investing in the Smart Grid, "Smart Grid 2.0: ‘The Soft Grid’" , I started to look up from our daily security quest to think about how much more complicated all of this is about to get. The article describes the next wave of investment in the Smart Grid, and how, with many of the infrastructure providers well-funded and moving forward, that the investment community is going to start to look for software firms that will build applications to capitalize on all of the new Smart Grid functionality.

I think that in some ways, there is some good news in this piece, mainly that IT-experienced people are beginning to become interested in the Utility space. Jeff St. John had written recently about the movement of Utility execs to Smart Grid startups, but this is more about bringing IT leaders into the Utility market. This is an evolution that Andy and I have been looking for and writing about for a while. Experienced IT and network security people have got to be brought to bear on the challenges of the Smart Grid, but as yet, according to our research, there have not been many folks who have made the jump. In David Leeds' comments, however, he notes that,
... this industry is now an attractive place to hang one's hat, and as such we anticipate that the electric power sector will be inundated with a wave of fresh talent in the next five years.
On the downside however, is the greenfield description of much of the new software that may soon infest the largely untested security byways of the Smart Grid. If Leeds is correct, and venture investing will soon begin to drive a wave of new functionality providers in the software market riding the Smart Grid, then the real impacts of any underlying insecurity within the Smart Grid infrastructure are shortly going to multiply manyfold.

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