Constellation buys CPower: More consolidation in DR ahead?

CPower was acquired by Constellation Energy today. Although the terms of the deal are not disclosed, chances are this is a good exit for investors who came in the last round of funding in April 2009. CPower was the smallest of the three main DR providers. The other two much larger players are EnerNoc and Comverge - both are public. Is this acquisition a sign for more consolidation in the DR industry ahead. The two other main players, EnerNoc and Comverge are small-caps with market capitalization of a few hundred million dollars making it an attractive target for the larger IT or Utility Provider company to move in this growing space. I wouldn't be surprised if one of the IT majors get into the action by purchasing one of them. Cisco, Oracle, IBM, Google & Microsoft are all looking to make in-roads in the Smart Grid sector. None of the existing IT folks have particularly strong channels in the utility world. So, in addition to giving them a good entry in a fast growing DR market, the acquisition will also provide a major channel access. Cisco is already making several acquisitions/partnerships in this area (Itron partnership, Archrock acquisition) and count on them to become a major player. Comverge and/or Itron will be a great addition to Cisco's hardware business. EnerNoc is particularly well suited for Oracle or IBM given their DR portfolio as well as their recent entry into the Carbon footprint management software.