Deal Radar 2009: EnergyWare

I last discussed ecological data centers in my interview with Rackable Systems CEO Mark Barrenchea, who is changing the physical structure of servers and data centers in order to cut energy use. Today’s Deal Radar highlights a different aspect of green computing, processor optimization, with a discussion of Blacksburg, Virginia-based EnergyWare. This early stage pre-revenue company makes a software package that maximizes processor performance while reducing energy use.

Co-founder Bob Summers hit upon the concept while he was evaluating deal flow in Virginia Tech for another of his concepts, 460 Capital Partners, a first seed and early stage fund. He met Dr. Wu Feng, a recognized expert in green computing and a professor at Virginia Tech. After months of discussion and analysis of the market and technology, Bob decided to take a leadership and founding role in EnergyWare to commercialize valuable IP that will increase the efficiency of computers.

The company worked with Virginia Tech to win the Southeastern Universities Research Association ‘s (SURA) first annual Intellectual Property to Market (IP2M) competition in October 2008. The patent-pending invention, EcoDaemon, ranked first among submissions from more than 60 research institutions. EcoDaemon is an intelligent software package that runs as an application service and maximizes performance while saving energy. It tells the processor when to change its frequency and voltage and what to change it to in order to simultaneously maximize energy savings and performance. EnergyWare believes this award will help the company take EcoDeamon to the next level of commercial viability.

According to a 2007 EPA report on server data center energy efficiency, data centers in the US are doubling their energy consumption every five years and consume an estimated 3% of the nation’s electricity. EnergyWare claims to reduce server energy consumption by 25% on average without impacting performance. Its software products increase the efficiency and reliability of data center servers such that the average enterprise data center saves $550,000 a year. EnergyWare claims that unlike other power-saving technologies that are useful when a machine is idle, its products are useful while programs run.

The company is currently at the closed beta stage and is working with several early adopters in various market verticals. Its first pilot customer is one of the nation’s largest insurance providers. EnergyWare’s model is to provide efficiency solutions that pay back in less than six months on an annual basis. Its pricing model includes a free trial/pilot period and a yearly fee on deployment, with the pricing set in such a way that the energy savings cover the license of the software within four months. The company refused to divulge any names and preferred to keep customer acquisition and pricing information confidential for the time being.

EnergyWare estimates that the total addressable US market in 2012 for its solutions is $2 billion. This is based on 100% market penetration into the data center market, where there are over 7,000 data centers and 14 million servers. The company has segmented the US data center market into three segments: Farms, Enterprise and Clusters and is targeting the top two segments, farms and enterprises, directly.

The pre-revenue company is looking to raise $1 million in seed capital to continue early customer acquisition and product development by the end of April 2009. Though EnergyWare’s core management team is in place, it is still looking for a VP of sales and marketing. The company’s current focus is on creating great products that meet customers’ needs for efficiency and environmental responsibility.

Related Readings:

*Lessons for CleanTech Entrepreneurs: Raychem CEO Paul Cook
*Deal Radar 2009: GreenRoad
*Cleantech is Cool

This segment is a part in the series : Deal Radar 2009