07.02.2009 — Microsoft is entering the energy management business with the new Hohm online application. From the press release Hohm looks to be little more than a Web site with ideas on how to save energy.

Troy Batterberry, product unit manager for Microsoft Hohm, provided some insight to CE Pro:

Right now Hohm appears to be just a series of algorithms to help consumers make some wise choices. What is the evolution path?
Right now we’re focused on personal conservation, helping equip consumers with the tools they need to do their part to save energy and money. The next phases we are looking at include personal control (enabling scheduling, remote monitoring, more granular detail into appliances) through things like smart plugs and intelligent thermostats. Moving up the chain we’ll look at differentiated pricing, scalable demand side management and ultimately zero carbon resources.

Is the infrastructure in place for demand-side management (DSM)? I assume that is the end game?
Microsoft Hohm is the first step of a longer journey to bring the power of software to help addressing the challenges in the energy industry. For demand side management to be effective there are certain prerequisites that need to be in place – time based pricing is one of them. Microsoft feels it is important to get started now and help all consumers to understand and cut back their energy consumption.

I know Microsoft is providing software development kits (SDK) for utilities (presumably for DSM); will they provide SDKs for third-party developers on the premises side, for example, home automation vendors?
Yes, eventually third-party vendors will have an opportunity to integrate with Hohm.

What, ultimately, would a Hohm ecosystem look like from utility, to grid, to meter to in-home?
The Hohm ecosystem will be a constellation of hardware, software, and Internet services that all interact to provide the homeowner with an easy, automated way to manage their energy consumption.

What's the tie-in with the Microsoft Advertising platform?
When consumers receive their personalized energy savings recommendations they could be served up advertisements powered by Microsoft Advertising platform for relevant local vendors and/or products. For example, if a consumer receives a recommendation to replace windows, he or she could find the system offers up local window vendors in the area and coupons/rebates on energy efficient windows.

More: Microsoft Seeks Ad Revenue with Hohm Energy Management App

I'm not sure I believe that utilities really give a hoot about imparting energy information to consumers. What makes Microsoft so sure?
We recognize that many utilities operate under a consumption-based model and may resist consumers using less energy. We hope these utilities will share the goal to help educate consumers who want to actively participate in the energy ecosystem. At the same time, utilities can more efficiently meet regulatory requirements and demonstrate environmental responsibility without a large investment. The developing trend is for utilities to be rewarded for energy saved as well as energy consumed, which will make Hohm more appealing.

Demand side management was all the rage 10-15 years ago, and has never taken hold. Why now?
The need for conservation, zero carbon energy sources, and growing peak demand combined with the efficacy of the Internet and connected consumer electronic devices.

What's the business model for this service?
In the short term, we’ll focus on contextual advertising. In the longer term, we’re focusing on demand-side management.