Some Silicon Valley CEOs moonlight as racecar drivers, others as winemakers. Gary Bloom, the outgoing CEO of San Mateo, CA-based eMeter, is probably the only one who spends his off hours as an emergency-response volunteer.

Bloom trained a Menlo Park, CA-based FEMA disaster team that helped with the federal responses to Hurricanes Ivan and Gustav. And as the leader of the San Mateo County sheriff’s rescue team, he directed search operations after the PG&E natural-gas pipeline explosion in San Bruno, CA, last September. But the pipeline disaster, which leveled an entire neighborhood, “was not the normal kind of search and rescue,” Bloom says. “It’s usually lost hikers in the mountains, or Alzheimer’s victims.”

Now Bloom has pulled off a rescue of sorts for his own company. Siemens Industry (NYSE: SI), the Atlanta-based U.S. wing of the German electrical and engineering giant, announced yesterday that it’s acquiring eMeter in a deal expected to close this month, just 20 months after eMeter’s board brought Bloom in to give the smart-grid startup the enterprise-software credentials it needed to compete.

Outgoing eMeter CEO Gary Bloom

The companies aren’t disclosing the financial details of the acquisition. But it’s likely that eMeter’s investors—who include Sequoia Capital, Foundation Capital, Northgate Capital, and DBL Investors, and who had together poured roughly $70 million into the company over 11 years—are breathing a sigh of relief. “It’s a positive outcome for the shareholders and the employees,” says Kyle Arteaga, eMeter’s global head of corporate communications. “Everyone is going to see a return on their investment, which isn’t always the case in cleantech. I think everyone is quite happy.”

EMeter’s entire 175-person workforce will be joining Siemens, with the exception of Bloom himself, who says he will step down as soon as the deal closes. That’s not a total surprise, given his history as CEO of Veritas Software and as a high-level executive at Oracle and Symantec. “Gary has the DNA of a CEO, not a division leader,” says Arteaga. “He completed the task he was invited to do.”

That task was a formidable one. It was to take eMeter, an aging startup with its roots in the utility and telecommunications industries, and make it into a company that could compete with the likes of Oracle (NASDAQ: ORCL) and Itron (NASDAQ: ITRI) when it comes to selling utilities the software they need to make sense of data from the growing number of smart meters at commercial and residential sites.

“The founders [Cree Edwards and Larsh Johnson] have an unbelievable amount of smart-meter and utility experience, but if you walked down the halls of the company, nobody had enterprise software experience,” says Arteaga. “Gary started bringing in new executives and partners in sales, marketing, business development, and product management who all had enterprise experience, and we really started operating like an enterprise software company. When we did that, we doubled our customer base, our deals became more profitable, and the company was worth more.”

The Siemens acquisition offer wasn’t the first one eMeter had received—but it was “the first time that it presented enough of a value to the shareholders that it was taken seriously,” says Arteaga, who attributes the larger offers to Bloom’s leadership.

I met with Bloom back in August and talked with him about the company’s technology and the personal challenges of making the switch from the business software industry to cleantech. Though the interview took place well before an acquisition was in the air, we hit on many of the themes that likely made eMeter an attractive purchase for Siemens. An edited writeup of our conversation follows.

Xconomy: Why did the eMeter board hire you?

Gary Bloom: I think they hired me for my ability to run a company. We are selling to a big industry, and we have to operate like a big company to service that industry. I have big-company experience. This is the smallest thing I’ve run, shy of the Menlo Park fire and disaster team for a year.

X: What struck you most, when you arrived at eMeter?

GB: What I saw coming in here is one of the last two industries in the world that has not transformed itself with technology. I lived through the telecom transformation and I watched Wall Street adopt electronic trading systems, but if you look at healthcare and the utility industry, those two haven’t transformed themselves at all, and the common denominator is … Next Page »

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Ember is one of those companies that defies a quick explanation. For starters, it has been around for nine years. And if all goes well, 2010 will be its first profitable one.

It has been a long climb for the Boston-based firm, which makes wireless networking technologies that help consumers and utility companies manage home energy consumption. Specifically, Ember focuses on making chips and software for low-power, low-bandwidth radio networks used for two-way communications. That sounds pretty tech-y, but as I learned when I caught up with the company last month, the technology is getting much closer to mainstream use.

Ember works with utilities, but sells its products primarily to companies like Itron (NASDAQ: ITRI) and Landis+Gyr, which make “smart meters” and other cutting-edge equipment for the electric grid. Smart meters are devices that let utilities predict peak energy usage times and adjust homes’ electricity use so as to conserve energy. Coupled with a smart display or thermostat, the devices also let consumers track how much electricity they’re using in their homes so they can save on their individual energy bills (and live greener lifestyles). What Ember provides, essentially, is the secure communication link between these homes and utilities.

The company was founded in 2001 by MIT alums Rob Poor and Andy Wheeler. Their original vision was to develop software for wirelessly networked sensors and control systems for supply-chain management, commercial buildings, and industrial applications like detecting temperature and fluid flow in oil pipes. (You can read my 2003 interview with Poor in Technology Review here.)

Along the way, Poor and Wheeler left the company to pursue other projects. But over the years, Ember hasn’t made so much of a radical change as some minor shifts in its priorities. First, it evolved into a chipmaker as well as a software maker, and has invested heavily in ZigBee, an open industry standard for wireless networking technology. And in 2006, around the time that Bob LeFort came on as CEO, Ember started to focus on energy management as its main commercial application.

Now that approach finally seems to be paying off, in terms of adoption—and revenue. “It’s the first time we’ve heard people talk seriously beyond small pilots of putting things inside the home,” LeFort says. “It’s not mainstream yet, not millions [of homes], but it’s beyond hundreds and a few thousand.”

Ember had its first profitable quarter in the first three months of 2010, and has followed that up with strong enough growth that LeFort predicts it will be profitable for the year. The company’s quarterly revenues have been in the $8-10 million range, he says, and it expects to have total sales of … Next Page »

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San Diego-based Proximetry’s co-founder and CEO, Tracy Trent, says he has been consciously trying to keep the wireless software company under the radar since it was started almost six years ago.

Trent began Proximetry after previously serving as the president and CEO of Stellcom, the San Diego wireless software developer acquired by Vytek Corp. in 2003, and as a senior vice president and e-business solutions group manager at government contractor SAIC. Trent says the premise for Proximetry was simple: What if a software technology startup could do for wireless network operations what Bellcore (the telecom R&D lab now known as Telcordia Technologies) did decades ago for telecom landline networks, in terms of end-to-end network management and performance optimization?

“We didn’t see anyone with a software platform that could manage this disparity in wireless networks,” Trent says, referring to the patchwork quilt of multiple frequencies, multiple vendors, and multiple protocols that exists in most wireless networks. Yet, if that could be accomplished—and “If you could promise a certain level of performance with a certain payload capability—that could be an interesting space” Trent says.

In developing Proximetry’s technology to fulfill that vision, Trent says the company focused on private wireless networks—such as the smart grids operated by electric utilities—because, as he puts it, “It’s the best wireless networking problem that’s ever existed.”

“Why is smart energy so exciting?” Trent asks rhetorically. “It’s big. The wireless networks that Qualcomm and others have built are not nearly as big as what the smart grid will have to be.”

In addition to the millions of so-called “smart meters” that utilities plan to install for every residential and business customer (San Diego Gas & Electric alone plans to install 2.3 million smart meters in its service area) Trent says utilities plan to also install millions of other wireless sensors to continuously monitor the energy coursing throughout its power grid.

At the same time, the performance of the wireless monitoring network also … Next Page »

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[Updated 1/20/10, 10:10 am. See below.] Cleantech wireless networking firm Tantalus, based in Burnaby, BC, has raised about $13.5 million in new equity financing, according to a regulatory filing. The round was led by the Silicon Valley firm Redpoint Ventures, and other existing investors also participated, according to a press release issued by Tantalus after the initial publication of this story. The company says the new funding round is worth a total of $14 million. [Previous two sentences modified on 1/20/10 with new information from the company---Eds.]

Tantalus makes wireless communications and networking technology that helps electric, gas, and water utilities monitor consumption and manage their resources. The company’s wireless network is used in parts of North America, and is meant to help both utilities and consumers manage their electricity use more efficiently by connecting devices like smart meters and thermostats to utilities’ control systems.

Tantalus was founded in 1989 and originally focused on radio frequency engineering for industrial automation and process control. In 2000, the company shifted its strategy to develop a wireless communication network for utilities, according to a company analysis in GigaOm. In 2007, the report says, Tantalus raised more than $18 million from European investors.

In 2008, the company formed a partnership with Itron (NASDAQ: ITRI), the Liberty Lake, WA-based energy technology company that makes smart meters for electricity, gas, and water, and other data collection and communication systems. The partnership combines Itron’s meters with the Tantalus wireless network, to support smart-grid and energy-efficiency applications.

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San Diego Gas & Electric says it is one of eight utilities in the United States, India, and Canada that will enable customers to access their daily energy use online by using Google’s PowerMeter gadget. When connected to a utility-installed smart meter, the PowerMeter displays personal electricity consumption data on home computers. SDG&E began installing smart meters last year, and plans to roll out the PowerMeter service in a partnership with Google later this year. SDG&E is a regulated public utility owned by San Diego’s Sempra Energy (NYSE: SRE).

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Ember, the Boston-based maker of wireless mesh-networking chipsets for communications between devices such as utility meters and thermostats, will announce today that it has topped off its coffers with an $8 million funding round from a group of venture firms and strategic partners. CEO Robert LeFort says that if government stimulus spending on energy efficiency measures translates into solid demand for Ember’s equipment, as expected, the new round (which brings the total the company has raised to $89 million) should be its last.

Many of the funds Ember has turned to in the past participated in the current round, including Polaris Venture Partners, GrandBanks Capital, RRE Ventures, Vulcan Capital, DFJ ePlanet Ventures, New Atlantic Ventures, and WestLB Mellon Asset Management, along with strategic partners Chevron Technology Ventures and Stata Venture Partners. In the past, Ember has also raised money from STMicroelectronics, Hitachi Corporation, and MIT. LeFort (whom I interviewed at length in January) tells Xconomy that the company has been working to assemble the round since late last summer, but that the global economic slowdown delayed negotiations.

But now investors see the Obama Administration’s economic stimulus package, which includes $17 billion for improvements to the U.S. electrical grid, as a strong plus for the company. Part of the stimulus money will go toward so-called advanced metering initiatives, in which utilities are equipping customers’ homes with new electrical meters that communicate wirelessly with utility control centers and in-home thermostats.

The devices will help utilities by allowing them dial back home electrical usage during peak hours remotely, and they will help customers by showing them exactly how much money they’re saving by conserving energy and switching to more efficient appliances, and the like. Inside almost every smart meter is a radio that uses ZigBee, the industry standard for short-range, low-data-rate radio communications—and the leading maker of ZigBee chipsets is Ember.

So far, California and Texas are the two states with the most smart-metering pilot tests underway. “I’ve heard about up to 20 different pilots going on around the country…of anywhere from 500 to 5,000 homes apiece,” says LeFort. “It’s very encouraging that people are spending real money, either to deploy or to do detailed investigations, with statistically significant samples, of how the technology will work.”

Research firm In-Stat predicts that sales of ZigBee-enabled devices will increase from their 2007 level of 7 million units to nearly 300 million units by 2012. The stimulus money won’t necessarily boost of Ember’s chipsets above the levels already expected, since “the utilities are saying they’re already going as fast as they can go,” says LeFort. “But we’re getting added emotional support, if you will, from the stimulus. The administration is saying, ‘keep on the path you are on, and if there are areas to accelerate, let’s leverage those.’”

Since a radio is needed on both ends of a wireless message, Ember is able to sell its chipsets both to manufacturers of wireless meters and to makers of programmable thermostats—essentially home energy control panels that display how much energy consumers are spending or saving. Later on, the company also expects to supply radios for smart plugs, devices that fit into electrical sockets and communicate with the control panels to conserve energy.

All of that prospective business reassured investors enough to make it possible to raise the latest $8 million. The money will be used “to support volume customer deployments and take us into maturity, meaning financial sustainability,” says LeFort.

It’s been a long road for Ember, which got its start in 2001 selling wireless temperature sensors to factory and refinery owners. “One of the questions has always been, is there a killer app out there” for wireless mesh networking, LeFort says. “It was always a fragmented market, and it was always a question of are you going to be able to get the volume up there. And then about two years ago, the utilities got behind ZigBee as the technology of choice for getting information into the home. Our investors see that it’s not a matter of if anymore, it’s a matter of when. Of course, if you’re a startup, when is an important question, because you have to have enough oxygen to get to the promised land. But we are finally past the point of asking whether there is a big enough market.”

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If you’re a glass-half-empty person, you might say the mesh networking technology pioneered by Boston’s Ember Corporation is a solution in search of a problem. If you’re a glass-half-full person, you’d probably call the company’s eight-year history a case study in flexible thinking. Regardless, after years of market struggles, Ember seems to have found a niche where its technology for self-organizing digital radio networks will shine: smart-energy systems designed to give utilities and consumers more control over how they use energy.

Andy Wheeler and Robert Poor, who built experimental wireless sensor networks for the U.S. Defense Advanced Research Projects Agency while they were students at MIT, founded Ember in 2001 with $3 million in seed funding from Polaris Venture Partners, DFJ New England, Stata Venture Partners, and Ethernet co-inventor Bob Metcalfe. (In subsequent funding rounds over the years, the company has raised an additional $78 million.) The idea was to find applications for the concept of ad-hoc mesh networking, in which pairs of transceivers in a network set up two-way communications as conditions allow, and messages hop from node to node until they reach their destination (roughly the same way they do inside the Internet).

In its early years, Ember made mesh-networking software for other companies’ microchips, usually equipment designed to be embedded in temperature sensors for petroleum refinery pipes and other similar devices. But over time, the company has evolved into a chipmaker in its own right—just one that happens to have a special expertise in the software running on its chips. And it has gone open-source, investing heavily in ZigBee, an open industry standard for low-power, low-bandwidth mesh networking.

Wheeler and Poor have both moved on to other companies. Meanwhile, Ember has moved on to new application areas—with the biggest near-term payoffs likely to emerge from a utility industry initiative called the Advanced Metering Infrastructure. In pilot AMI projects in states like California and Texas, computerized “smart meters,” or energy gateways, are being attached to utility customers’ homes. The devices communicate wirelessly both with utility control centers and with in-home thermostats, displays, and smart appliances, allowing utilities to dial back electrical usage during hours of peak demand and giving customers more information about their energy consumption patterns. The home side of these communications depends on technology from Ember, which is the leading supplier of communications chips for AMI devices.

“The core technology is not that different from what Andy and Rob had in mind,” Ember’s president and CEO, Robert LeFort, says. “But it’s being used in applications they never had in mind when they were developing it.”

LeFort joined Ember in 2006 from semiconductor maker Infineon Technologies, where he had spent four years as president of the company’s North American operations. I interviewed him about Ember’s development and its business opportunities last week at the company’s headquarters in the Fort Point district of South Boston. An abridged version of our talk follows.

Xconomy: How did Ember evolve from a software company into a chip company?

Robert LeFort: It’s just very hard to make a business case for embedded software. You typically earn a royalty on a per-instance basis, and you don’t usually cover even the cost of developing the software. So you need to be doing more than just software. The end devices and modules [using Ember's software] were interesting to us, and chips seemed to be a better fit. So in 2003 we introduced our first chip, the 2420, which we still sell today. And in 2004 Ember acquired RF [radio frequency] technology and the chip team that developed it from Cambridge, UK-based Cambridge Consultants. [The company's main products today are newer microprocessor models called the EM250 and EM260, both announced in 2006.] We monetize our software through the chips. I think it’s fair to say that there’s nobody who uses our software who doesn’t also buy our chips. And if you look at our competitors from the 2000 era, the ones who went up the chain and sold just software have not fared so well.

X: Talk a little about the company’s recent turn toward smart energy applications.

RL: There were a variety of things that converged, and some other things that fell off the table. When I first came, we were very excited about commercial buildings and lighting. Wireless mesh networking is perfect for that application, but we learned that it is a very fragmented market that moves very slowly. It’s still a good market for us, but it’s incremental. The home automation market is also good, but somewhat limited until they get the costs down and the maturity up.

Meanwhile, I think smart energy will work really well. It’s something we saw from being so tightly involved with the ZigBee Alliance, just from being down in the trenches and talking to guys about what they were doing. I would say smart energy only made up about 10 percent of our revenue in 2008, but we expect it to be 40 or 50 percent in 2009.

X: You mentioned the ZigBee Alliance. As I remember it, when ZigBee started out years ago it was mainly pitched as low-bandwidth alternative to the Bluetooth standard for home entertainment and automation applications. The one that sticks out in my mind was a remote control for opening and closing your blinds, which seemed kind of frivolous to me at the time. But Ember became instrumental in adapting the standard for more advanced applications, like monitoring devices for their energy usage. How did Ember help to advance that standard, specifically?

RL: We were big proponents of the ZigBee Pro networking standard, and fundamental to that is true ad-hoc routing. We believe that RF links are inherently unreliable. Unlike a Bluetooth device or a cell phone, a temperature sensor that loses its signal can’t move six inches to the right to get a better signal. You need a network that can handle that efficiently. We wanted to build a network where you wouldn’t be constrained by … Next Page »

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Perhaps because they operate in heavily regulated industries, electric and gas utility companies are not usually regarded as centers of innovation. And to some critics, the utilities operated by San Diego’s Sempra Energy seem to operate in stodgy defiance to anything shiny and newfangled.

But it’s a bad rap to Hal Snyder, who oversees strategy and program development as vice president for customer programs at both San Diego Gas & Electric and Southern California Gas Co. Both utilities are owned and operated by Sempra, and account for more than half of the company’s profits. Snyder and other utility executives talked with me at length about some of the technology advances they have underway and the innovations needed to change the way energy gets distributed in Southern California.

“We have been involved in fuel cell projects, sustainable energy community projects, and photovoltaic solar panels installed in various places,” Snyder says.

In July, SDG&E became one of the first utilities in the country to begin the full deployment of so-called … Next Page »

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