Cisco and Itron Partnership FAQ

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Cisco and Itron Join Forces
to Deliver Next–Generation, IP-Based Smart Grid Platform
Frequently Asked Questions
Cisco’s industry standard IP architecture to power Itron’s market-leading OpenWay ®
smart meter system. Collaboration efforts will enable a secure, consolidated IP-based
smart meter communications network for utilities’ current and future smart grid
applications.
Itron and Cisco are embarking on a new global partnership to collaborate on smart grid
solutions. This joint-development agreement is focused on introducing the first fully-
implemented IPv6-based communications to the smart grid market, delivered through
Itron’s OpenWay system.
The purpose of the agreement is to jointly develop the next-generation architecture and
technology for intelligent distributed networking infrastructure of the smart grid. This
effort will leverage Itron’s existing OpenWay smart metering platform, as well as Cisco’s
networking and cyber security technology and expertise. The resulting reference design
will enable utilities to be in compliance with the proposed North American Electric
Reliability Council (NERC) cyber security requirements and National Institute of
Standards and Technology (NIST) cyber security guidelines.
While the agreement is applicable world-wide, initial development is focused on Itron’s
OpenWay solution and its roots in North America as it will serve as the first target
platform for this effort. Applying the developed architecture to other Itron systems may
occur over time, as market requirements and opportunities dictate.
As a result of this collaboration, Itron will be licensing Cisco technology within its
OpenWay smart meters—akin to “Cisco Inside.” This will create the first enterprise-class
networking solution synonymous with the Cisco quality, security and reliability that the
utility industry relies on for its critical telecommunications infrastructure and the proven
reliability of Itron’s smart metering solution. Ultimately, Itron will sell, install and support
the Cisco-networked system and will continue to own all aspects of the utility customer
relationship.

FAQs:
Q: What exactly are you announcing today?
A: Cisco and Itron are announcing a joint development and alliance agreement. This
helps bring true interoperability to the smart grid. With Itron and Cisco’s joint technology
solutions and services, utilities will benefit from new IP-based smart metering solutions
that are more secure and reliable, easier to maintain, and adaptable to future
requirements.
Q: Itron and Cisco seem like very different companies. What do they have in
common?
A: While Itron and Cisco are not in the same industry, we have very similar business
values and philosophies.
• We believe in building customer value by listening to our customers and
appreciating their challenges, and we understand that customers are
fundamental to our success by earning trusted advisor status.
• We have similar business philosophies that respect and support the past while
innovating for the future; keeping the entire end-to-end architecture in mind.
• We understand the world’s resources are increasingly constrained and have
taken on the responsibility to use our assets and technology to increase
efficiencies, better manage resources, and enact processes and procedures that
reduce our environmental impact and help increase the sustainability of
customers.
• We believe making a positive impact on the communities in which we operate;
contributing and volunteering is core to both cultures.
Q: Why is Itron partnering with Cisco in this way?
A: While OpenWay has already established itself as an AMI market leader with over 14
million meters under contract, we hear utilities asking for a more open, network design
that achieves enterprise-class networking and security and that is fully IPv6 based to
support broader smart grid initiatives. This partnership with Cisco provides us with
further expertise in open standards-based networking and helps accelerate the move to
this next level. We see the entire industry having a need to migrate its technology to
address evolving needs by using open standards-based solutions at all layers in the
network stack.
Q: Why did Cisco choose Itron as its development partner to work with?
A: Itron’s long-standing industry expertise as a smart metering leader, as well as its
experience in large-scale system deployments using both RF and broadband
communications, were key factors. Itron’s approach to developing and marketing
OpenWay as a true high-quality smart meter is also essential to the build out of an
open, interoperable smart grid. The Itron smart meter was designed from the beginning
to be fully upgraded via firmware, providing more functionality, security, and futureproofing.
And the OpenWay system was designed to be communications agnostic at the
application layer. This is an excellent fit of vision and capabilities.
Q: How is this different from other solutions in the market today?
A: The Cisco-Itron collaboration takes interoperability, standards, and security to the
next level for smart grid applications. Our vision is to provide a full IPv6-based,
interoperable solution at every level in the “network stack.” Itron’s proven ability to

deliver a comprehensive smart metering solution, embedded with renowned Cisco
networking technology, is a powerful combination. Together, Itron and Cisco are two
companies utilities can trust with the experience and resources to truly deliver on the
promise of smart grid.
Q: What is the timing of these releases?
A: While this partnership involves an evolutionary path, the current OpenWay platform is
available today. With Cisco’s collaboration, Itron’s OpenWay system will be IPv6
capable (fully supporting IP communications to the meter) as planned by the end of the
year. Planning and design of future iterations is already underway.
Q: Where does this partnership place you in the competitive AMI landscape?
A. This development collaboration is in response to foreseen market needs and a desire
to provide a secure and complete standards-based approach to the networking
infrastructure layer. This will lead to one common enterprise communications
architecture across the utility to support a range of smart grid applications, beyond
metering and AMI. These applications could include demand response, distribution
automation, distributed generation, and energy storage. To deliver on the promise of
smart grid interoperability, we believe the marriage of enterprise network standards with
an industry leading, reliable smart metering solution is a truly different—and critical—
approach for our industry.
Q: What are the financial implications of the agreement?
A. The financial terms of the partnership are confidential. However, we are jointly
developing this design and Itron will be licensing Cisco networking components as part
of our solution. In addition, this opportunity better positions Itron to provide a more
robust smart grid solution, opening up a broader enterprise system sale of products and
services into the utility for Itron.
Q. How will this affect OpenWay gross margins?
A. The financial terms of the partnership are confidential, but we do not expect our
margins to be adversely affected. Itron will be licensing the reference design within
OpenWay. In addition, Itron will be a distributor for other Cisco networking components
as part of our solution offering.
Q: Will anyone else have access to this technology?
A. This is a development agreement specific to Itron and Cisco. Upon completion of the
reference architecture and its availability in Itron’s “Cisco inside” OpenWay platform, it
will be made available for adoption by the rest of the industry through Cisco.
Q. Does this agreement apply to OpenWay electricity only? How does it affect
other Itron solutions?
A. Initially our development plans will focus on OpenWay in North America. Over time to
meet market requirements, Itron will consider adapting this reference design in other
Itron systems offered around the world
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