ABB Invests in On-Demand Data Center Power

Massive Swiss electrical equipment giant ABB isn’t a name commonly associated with cutting-edge innovation and young startups. But this morning, the company said that it’s invested a small sum through its VC arm into Valley startup Power Assure, which makes software that can ramp up and down the power consumption of data centers to coincide with server usage.

ABB’s investment into Power Assure was only $1.5 million, but it’s an important validation of how big the market could be for the three-year-old startup’s green data center technology. ABB doesn’t do anything small: It has operations in 100 countries, close to 120,000 employees and generated annual revenue of $31.8 billion in 2009. ABB also makes data center power equipment, so it’s an important strategic partner for Power Assure.

Think of Power Assure’s product as data center power like video-on-demand. So, say, in the middle of the night, when few web users are pinging websites, Power Assure’s service can dial down the energy consumption of the servers in the data center appropriately, and when there’s a sudden spike of traffic in the morning, the service can quickly ramp capacity back up.

Power Assure’s CEO Brad Wurtz told me in an interview earlier this year that most data centers are typically using just 10 percent of their capacity, yet running servers and the data center at full power. That’s highly inefficient, costly, and bad for the planet. According to the Department of Energy, data centers are responsible for 3 percent of U.S. energy consumption, and that number is growing; a typical 125,000 foot data center consumes $3 million worth of energy per year.

Wurtz says Power Assure’s service can save data center operators 50 to 60 percent in energy costs without having a negative impact on service. That’s the first question I asked — “Will this impact your customer’s web sites at all?” — and Wurtz says that’s the first question all of its customers ask. The answer is no, says Wurtz, and the company lets its customers test out the service to see for themselves.

The key to Power Assure’s technology is the smart algorithms it has created to monitor and control energy usage in the data center in real time. The company starts out by installing one or two appliances in a customer’s data centers which sit on Power Assure’s management network and gather information about the demand of the customer’s web sites, as well as the power usage of the servers, cooling system and networking gear. Power Assure’s system then uses its algorithms to, in essence, dynamically match the website demand in whatever metric is available (such as cost per click, number of users or number of sessions per minute) to an appropriate level of utilization for the servers, cooling and networking gear.

This morning, Power Assure also announced new features for its software, including the ability to automatically adjust cooling to maintain data center efficiency, as well as a predictive feature that helps data center operators place equipment in the data center for optimal efficiency.

Reducing data center power, and thus costs, is increasingly becoming a competitive advantage for web giants and data center operators. As Yahoo VP of Data Center Engineering & Operations Scott Noteboom told me in an interview last week, power-hungry inefficient data centers are not sustainable to the bottom line. Power Assure has raised a total of $20.3 million from investors, including Good Energies and Draper Fisher Jurvetson, as well as received a grant from the Department of Energy.