My Clean Break column from Friday revisits RuggedCom, the Woodbridge, Ontario-based maker of ruggedized communications equipment for the smart grid. The company celebrates its 10th anniversary this week, and is at the top of its game. Sales of routers and switches designed to operate in the harsh environment of the grid are climbing steadily, profits are also growing, and the company is on track to breaking $100 million a year in revenues, about two thirds of it coming from utility customers. In the market it plays in, the company has a commanding lead over big names such as Cisco and General Electric, and while it doesn’t get much attention from media south of the border, utility purchase managers know the company well. Investors are starting to catch on — in the past four months the company’s share price has shot up 70 per cent.
Ontario has done well with its deployment of smart meters, but it’s often forgotten that the smart grid is much more than that. Smart meters are on one edge of the grid — that is, attached to the customer, no different than a cable modem’s placement in the larger cable infrastructure. But the smart grid is about adding automation, communications and digital technologies throughout the entire grid, from generation to delivery to consumption, with the idea that the information collected and acted on can make the electricity system more efficient, adaptable, reliable and safer, while allowing for the introduction of new services and business models that ultimately benefit consumers.
RuggedCom supplies the core communications technology for transmission and distribution infrastructure. And it’s not alone in Ontario. General Electric decided back in the mid-1990s to consolidate its global operations around T&D equipment and today its facility in Markham is considered the company’s global smart grid headquarters with respect to core grid products. The equipment GE and RuggedCom are designing and manufacturing in Ontario, and exporting to countries such as China, may not be as interesting as smart meters, in-home displays, energy-management portals, or smart appliances, but they’re arguably more important to realizing the true potential of the smart grid.
And Ontario, it seems, is a hotspot for this kind of innovation. RuggedCom’s CEO, in fact, believes the company can grow to more than a billion dollars in revenues over its next 10 years. Canada’s next RIM? Wouldn’t be as as high profile, but certainly the potential for that kind of success is there.