The smart grid market is showing some strength as it consolidates and major players stake out their desired territory.

Hardware company Cisco, which launched various IP-based smart grid devices in 2009, announced on Wednesday that it would begin to focus its efforts on smart grid software instead.

“For energy management in the home, we will transition our focus from creating premise energy management devices to using the network as a platform for supporting innovative applications and architectures that will improve our customers’ value proposition in the consumer energy management market,” Cisco’s Senior Vice President and General Manager of Smart Grid Laura Ipsen wrote in a Cisco blog.

As major players like Cisco begin to stake out their roles in the smart grid market, the sector may become more appealing to investors who may until recently seen smart grid as more of a science fiction vision than a practical reality. Indeed, the technology is only now transitioning from small pilot programs in various testing grounds to real-life application.

Google was another early player in the smart grid sector, with its Power Meter program. But the company has also chosen to refocus its efforts and decided to retire the program in June. Read more: Only As Good As Google’s Numbers.

The companies that started early in the market may emerge as leaders down the road. Ipsen noted that Cisco hopes it has gained key insights that will allow it to be successful in the industry going forward.

“By learning and adapting to changing market conditions, Cisco can better enable a 21st century model of energy maangement and the future global energy infrastructure,” Ipsen wrote.

Photo Caption: The Cisco logo is seen on a telephone in Washington on July 18, 2011. US networking giant Cisco said it will eliminate 6,500 jobs, cutting its global workforce by nine percent as part of a move to slash its annual operating costs.