Greening the Internet and Verari Systems’ “Data Center in a Box”

3/11/09Follow @bvbigelow

Making improvements in energy efficiency may not seem like the cutting edge of innovation, but the combined effects of the recession and rising energy costs have many big companies scrambling for novel ways to get on top of energy demands.

At the same time, efforts to reduce the load on California’s increasingly constrained power grid have led the state’s biggest utilities to create significant incentive programs for customers that cut their energy use. For many companies with data-intensive operations, that means installing more energy-efficient computer centers—and cutting the related cost of air handling equipment needed to cool the racks of servers and storage devices.

Enter San Diego’s Verari Systems, a venture-backed company that provides blade-based servers and data storage technology, which has aggressively shifted its focus in recent months to emphasize its “green data centers.” Among Verari’s newest concepts is the development of a “data center in a box” that maximizes energy efficiency by consolidating its computing racks into a self-contained system about the size of a long cargo container.

To learn more about this energy efficiency strategy, I sat down recently with David Driggers, Verari’s co-founder and chief technology officer, and Dan Gatti, the senior vice president for worldwide market operations. To a certain extent, they explained, Verari was already positioned for the blooming market in green IT equipment by virtue of its patented vertical cooling technology. Verari designed its blade servers and data storage devices with a hollow core, so cool air blows through each device like wind through a tunnel. The company also designed its racks with fans at the bottom, so cool air is blown upward through the rack. The company says conventional server racks typically use front-to-back cooling, which is less energy efficient.

Driggers notes that the idea initially was to maximize both the computing density and the energy efficiency of Verari’s server and storage racks, so as to lower the overall cost of ownership. “Vertical cooling is the patented technology that has driven our success,” Driggers says. Indeed, even before its shift to “green,” Verari had attracted an impressive list of customers ( Gatti says 95 percent are outside the San Diego area) that include firms such as Akamai, Microsoft, Qualcomm, Petrobras, Harris, and Lockheed Martin.

Verari had its big customers in mind when it developed its data center in a box, which can house up to 1,400 servers in a trailer-sized box that can easily be shipped and set up outside a building. “Instead of building a new data center (structure) for $25 million, you can install one of our containers for about $5 million,” Gatti says. Verari has designed the container to be extremely energy efficient, which helps to save on operating costs as well.

To Larry Smarr, who has become a strong advocate for greening the Internet as director of Calit2, the California Institute for Telecommunications and Information Technology, the concept makes a lot of sense. “Instead of cooling a big computer room, you’re cooling a much more confined space,” Smarr says. While Verari is among the first to develop the idea, Smarr says Sun Microsystems and others have developed a similar concept for a data center in a box. “To me, this is an exciting new technology—what you might call these modular machine rooms.”

In addition to winning cash rebates from San Diego Gas & Electric and other utilities under an energy credit incentive program, Verari’s Gatti says companies also benefit from lower utility costs. “We have customer benchmarks that show us [to be] 35 percent more energy efficient” than conventional IT equipment, Gatti told me.

As a way of helping prospective customers finance the costs of replacing an existing data center, Verari recently formed a financial services group that offers lease financing, trade-in programs and other financing options. SDG&E also has financing programs to help bankroll its customers energy-saving initiatives.

Driggers, who worked intensely on a laptop computer while he talked with me, says Verari was founded in 1991 as a San Diego computer store and expanded with the biotech and Internet boom as a computer equipment supplier. The company once known as Computer Parts Plus evolved into a data center equipment provider that specializes in serving the need for what he calls “unstructured” data.

Driggers explains that in contrast to a financial service company’s data center, which must ensure the availability of every single transaction, unstructured data is ideally suited to media and entertainment companies that store computerized copies of movies, songs and other digital content in many places. “If you’re downloading an update for Microsoft Vista, you don’t need a single piece of data,” Driggers says. “It’s cached all over so many people can access it.”

The privately held company has received three rounds of venture funding. Drigger declined to say how much funding the company has received, but he said Verari counts the Carlyle Group among its investors.

Verari’s increased emphasis on energy-efficiency comes at a good time. Gartner recently reported a 15.1 percent plunge in global server sales—to $13.1 billion—as the recession worsened during the last three months of 2008. Gartner analyst Heeral Kota noted, though, that blade servers were “one of the few segments to achieve any growth at all in this challenging environment.”

Verari is hardly alone, though, in focusing its business on cutting energy costs and “greening” corporate data centers. Earlier this week, Folsom, CA-based SynapSense got $7 million in a second round of funding for technology that uses wireless sensors to track thermal, pressure and humidity conditions in corporate data centers. The company’s customers include the New York Stock Exchange and Verizon, among others.

Another energy-saving approach adopted by Verari and other IT equipment makers calls for developing “virtual servers.” SDG&E estimates that 20 conventional servers operating under moderate conditions use about 90,000 kilowatt-hours of electricity a year. The San Diego utility says consolidating those units and their operating systems into a single server (which is partitioned to operate like 20 separate servers) consumes only about 6,600 kilowatt hours—and can lower the user’s annual electric bill by $6,672 under SDG&E’s energy efficiency program incentive program.

“One of the key focuses for data centers these days is how to stop spending money on heating and cooling; that’s just money down a rat hole,” Smarr told me. “At the end of the day, what counts is what the guy in accounting has to pay when the electricity bill comes in.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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