Fjord IT has opened up its first data center space, which is a 1,000 square meters (3,280 square feet) pilot project, in Oslo. The company is co-locating its data center with Broadnet, the largest broadband and Internet service provider in Norway. Fjord IT has developed a cooling technology and is powered by cheap hydropower, which has a lower carbon footprint than fossil-based power. Those attributes could make its IT services appealing to environmentally-minded businesses as well as businesses in countries that have renewable energy and emission-reduction goals.

Gallefoss says the company has lined up its first customer in its Oslo space — business software service provider 24SevenOffice — and plans to open another data center space in Notodden, west of Oslo, this summer. The Notodden data center will be larger and use its cooling technology.  The company is hoping to line up $10 million in a second round of funding this year, following a first round of $2.5 million from investors in Europe and Hong Kong.

Gallefoss didn’t want to talk about the cooling technology because he said the company is still applying for patents, but described it as a passive cooling technology that makes use of the cold outside air to maintain a constant temperature indoor. The average temperature of Norway is 7 degrees Celsius (about 45 degrees Fahrenheit). Google and Facebook are using this type of cooling for their data centers in that region of the world, too.

Fjord IT can keep its operational cost down with the help of the abundant hydropower in Norway, Gallefoss said. Hydropower accounted for about 95 percent of the electricity Norway generated in 2010, according to the International Energy Agency. Retail prices for electricity range from $0.05-$0.10 per kilowatt hour, Gallefoss said.

Hydropower, being renewable and doesn’t spew pollution into the atmosphere, has become popular for data center operators who want a cheaper, cleaner source of electricity. France-based Internet service provider OVH.com recently opened a data center in Canada that runs on hydropower.

Iceland also appeals to data center operators for similar reasons. Verne Global has set up a data center in Iceland, and Greenqloud has been selling IT services out of data centers in the country, which runs on hydropower and geothermal electricity.

Gallefoss said its first data center space can achieve a Power Usage Effectiveness (PUE) of 1.3 while the second one is expected to get PUE 1.05. PUE is a ratio of the power used to run a data center’s IT and servers versus the power for running the entire data center. The measurement is one of the more common metrics for determining a data center’s energy efficiency.

Germany is the big target market for Fjord IT because the country is keen on reducing its carbon emissions, but for the German market, Fjord IT plans to be a wholesale service provider and rely on its German customers to sell its service. Germany also is the largest solar energy market in the world thanks to government subsidies that pay solar power project owners a premium for the electricity.

Europe, overall, has set 2020 goals for reducing emissions and making use of energy more efficiently. The European Commission is pleased with the progress it’s making with reducing emissions but not so much with achieving the energy efficiency goal. As a result, it’s keenly interested in IT technology that will help it meet that goal, including the operation of more energy efficient data centers.

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Dean Nelson, eBay’s vice president of Global Foundation Services, says the effort, called the Digital Service Efficiency report, “is the miles per gallon measure for technical infrastructure for eBay.” Essentially, the company has boiled its business down to a single currency — transactions (specifically URL requests) associated with users’ buying and selling on the site — and created a slew of metrics that measure how efficiently it delivers those transactions in terms of revenue, performance, cost and carbon footprint.

The project has been about 18 months in the making, Nelson told me during a recent phone call, and eBay was finally able to set a baseline measurement of its performance in 2012. Now that it knows what’s in place and how its infrastructure performs over the course of a year, the goal in 2013 is to cut its computing-related carbon usage and costs by 10 percent and increase performance in terms of transactions per kilowatt-hour by 10 percent.

In order to meet these goals, he said, every member of the technical team — from facilities managers to software engineers — has be striving toward them and also be cognizant of how turning their “knobs” will affect the other metrics eBay is measuring. “Think of it like a Rubik’s cube,” Nelson explained. “You can solve one side but screw up the rest of them.”

eBay plans to release quarterly updates on its progress along with its earnings reports, but employees will have access to down-to-the-second visibility into what’s going on. “It makes it personal for them,” Nelson said. “They can see what their efforts mean.”

52,075 servers doing a lot of work

Nelson offered some pretty compelling examples of how the Digital Service Efficiency project works in practice. If the goal is to decrease cost per transactions, data center engineers might try to minimize power usage at the facility level while server engineers might look to lower-power gear or better utilization on existing gear. They essentially reduce the denominator in that equation “and the net result is we should make more money from those transactions,” he said.

In one real-world instance, a software engineer tweaked some code that affected how much memory an application requires and the company was able to eliminate 400 servers. That cut energy usage by 1 megawatt and a $2 million savings in capital expense when the time would have come to refresh those servers.

eBay also has created a “list of fame” and a “list of shame” that highlight the 1,000 best- and worst-utilized servers within the company. “We have a hit list,” Nelson said, and it’s going to examine the bottom 20 percent to figure out why they’re as wasteful as they are.

However, he added, it’s important to remember on the server front that improving cost, performance and carbon usage doesn’t always mean buying lower-power gear. If eBay can improve the power density of its racks using technology such as liquid cooling — something its Project Mercury data center in Phoenix is pre-equipped for — it can handle more transactions on less gear. It already has some racks running at a sustained rate of 35 kilowatts and thinks it can push that up to 50 kilowatts, Nelson said.

Clean transactions with solar panels and Bloom boxes

On the carbon front, eBay has nothing but an open field in front of it thanks to some big clean-energy projects set to go live in 2013 in its new Salt Lake City, Utah, data center called Project Topaz. For starters, it’s using Bloom Energy boxes as the primary power source, which mean a slightly higher cost per transaction, but also a 13 percent reduction in carbon emissions and increased reliability (downtime costs eBay a lot of money).

Also, the company has finally cleared some regulatory hurdles to tie an on-site solar array back to the grid. Because of changes to a Utah law that eBay lobbied for, it’s about to start sourcing off-site clean energy for its data centers, as well.

“That is a corporate priority,” Nelson said. “We want to create the cleanest commerce engine on the freakin’ planet.”

Trying to change an industry

Of course, the Digital Service Efficiency methodology isn’t the only attempt by a major data center operator to show the world how efficient it is. Google publishes annual Power Utilization Efficiency (PUE) ratings for its data centers, and Facebook occasionally does as well. On Monday, Salesforce.com released a statement underscoring its commitment to sourcing renewable energy.

However, Nelson pointed out, what eBay is doing — and encouraging others to do — is more transparent in that it gives a lot more depth about operations, including the company’s server count. Even if companies don’t publish their results, tying operational efficiency to other business objectives should have a positive effect on the bottom line and the environment, regardless. Every company will have its own base currency, Nelson explained, and they’ll have to find their own metrics to measure and figure out what are the knobs that each part of the company can turn to meet goals.

“We all have the same challenges, the same things to solve for, but we have numerous ways to solve it,” Nelson said. …”[Their implementations] may change completely, but the point is the conversation is starting.”

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IO Founder and CEO George Slessman told me during a phone call on Tuesday that the company raised the latest money in order to capitalize on a huge opportunity. One industry group estimates that companies will spend $105 billion building and managing data centers in 2012, and Slessman thinks IO can address a significant portion of that spending, especially as it relates to costs around designing, building and generally operating facilities.

IO’s modular data centers include their own cooling units and backup power and can go pretty much anywhere a customer has room to put one. The company also has developed its own data center operating system software, which lets users analyze, automate and manage their data centers with a fine-tooth comb using a rather slick interface. The goal is to cut down on excessive data center build-outs to account for future needs, wasteful cooling practices and unintelligent resource management.

A screenshot of the IO.OS software

The approach has garnered a respectable number of big-name customers, including, most recently, Goldman Sachs. The investment bank decided to deploy IO modules as its primary means of capacity expansion in the future, meaning its days of designing and building data centers are over.

IO also has a managed hosting and colocation business, which began as traditional raised-floor space housing servers in cages but is now primarily comprised of the company’s modules. However, Slessman said, in the relatively short term, “well over half our revenue will come from product sales where people are buying it and putting it on their site.” Because of regulatory and other needs, many companies simply will never host the majority of their applications.

Slessman said about half of its latest investment will go toward R&D and expanding its footprint deep into the Asia, Australia and the Middle East (the other half will go in the bank). Already, IO is planning to launch hosting locations in numerous locations throughout Europe, South America and Asia. I was told during a visit to the company’s Phoenix headquarters in April that is has developed a manufacturing model that can be easily repeated from location to location so modules aren’t being shipped around the world.

But IO isn’t able to raise so much money just because it costs so much to invent and build modular data center technology. Everyone — including the mainstream press — is now paying attention to data center efficiency, and any technology that cuts down on the amount of energy a data center uses should be at least somewhat appealing to investors and customers. For example, Calxeda, an Austin, Texas-based startup that’s building enterprise-grade computing fabrics out of out of low-power ARM processors, announced a $55 million investment round on Monday.

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If eBay’s Dean Nelson has his way, that was just the beginning. His future is one of ever-greater density in data centers driving ever-greater efficiency, and he’s relying on modular data centers like the ones Dell has provided to get him there.

Sometimes the modular data centers are the standard 8-foot by 15-foot shipping containers, and sometimes they’re more unique, custom designs. But they’re always loaded to the teeth with gear. A single unit can weigh 100,000 pounds — if you drop one in, you instantly have a whole lotta computing power in a relatively small, wholly weather-proof package.

Add a thousand servers, lower the PUE

Nelson, who serves as eBay’s senior director of global foundation services (read “he runs its data center operations”), is so excited about what his team has accomplished with the new data center that he couldn’t help but take to the whiteboard in the conference room and break into a mini-lecture on how the project came to be. Many of the nitty-gritty details on how Project Mercury shaped up — including specifications on how it’s cooled and powered –  are available in a whitepaper by the Green Grid organization. But here’s the takeaway: total cost of ownership (TCO) drives everything.

If Nelson is going to buy it, it’s going to be flexible enough to change with future generations of gear and it’s going to hit the perfect blend of density, efficiency and performance. Done right, containers and modular data centers fit the bill perfectly, and Nelson will buy them from whichever vendor is best able to meet his requirements when it’s time to load up on more capacity (and when he needs more than 1,000 servers at a time). Already, he told me, “We’ve doubled our capacity and my [operational] budget has stayed flat.”

Two HP containers, and the two Dell units in one enclosure.

Among that added capacity was 50 petabytes worth of Hadoop drives split among two 1,008-node clusters. One cluster resides at the SuperNAP data center in Las Vegas, the other in an HP container atop eBay’s new data center.

Nelson has been able to maintain a steady operational budget because it’s difficult to beat what Nelson’s containers are doing in terms of efficiency. And you can’t talk about efficiency without talking about power usage effectiveness, or PUE. It’s an industry standard for determining how much energy a data center uses for tasks other than computing (e.g., cooling or lighting). The ratio is simple enough, you divide the total power usage by the power used for computing, with 1.0 being perfect. The world’s most-efficient data centers from Google, Facebook and Yahoo top out at about 1.08.

Project Mercury gets free cooling year round, even in the heat of summer. On Aug. 23, 2011 — a 119-degree day — one of eBay’s Dell units had a partial-PUE score 0f 1.044 while drawing 520 kilowatts of power. On January 17, 2012, while drawing 1 megawatt, the same unit had consistent partial PUE of 1.018 while the rest of the data center was doing between 1.26 and 1.35. Project Mercury has room for 11 modular data center units on its roof, and every one drives down the PUE of the entire facility’s PUE. Nelson realistically expects an entire facility PUE of less than 1.2.

Big thing, small package

Given all the computing power it’s capable of consuming, though, one of the most striking things about eBay’s Project Mercury data center is its size. eBay has an existing data center next door that’s 43,000 square feet and can handle 6 megawatts of power. Project Mercury has about 14,000 square feet of computing space (including the roof), but is designed to handle 12 megawatts of power (it’s currently drawing 4 megawatts). It also costs half as much as the larger space to fill with gear and to operate.

Project Mercury has a maximum power capacity of three times its current draw for two major reasons: 1). it’s not yet full (there’s still space for seven more units on the roof alone) and 2). Nelson demands higher performance with each new generation of gear he buys. He’s even pushing modularity on the first floor that looks more like a traditional data center, which means standard-size racks with ever-more power crammed into the exact same amount of space.

It’s a strategy Nelson calls “rack and roll.” Vendors with the winning bids deliver 48U racks chock full of gear that eBay only has to plug in. When it’s time to replace racks or add new ones, his team just rolls them in and out as needed.

Right now, the HPC racks that power eBay’s search engine contain 96 servers and pull 28.8 kilowatts of power. They weigh in at 3,500 pounds apiece. Its Hadoop racks contain 48 servers, each stuffed with 12 2TB drives. The first-floor space can fit 220 of these power-packed racks, while each rooftop container can fit 20.

But they keep getting more powerful. The 28.8-kilowatt racks seem downright Herculean next to their legacy 8-kilowatt neighbors on the raised floor. When future generations surpass 40 kilowatts per rack, Nelson has equipped the facility for liquid cooling direct to the chips. On the roof, Dell boosted its performance 800 kilowatts max on the second-generation modular data center up from 550 kilowatts on the first-generation model.

At webscale, (almost) everyone’s doing it

To hear Dell’s Data Center Solutions division tell it, modular data centers aren’t exclusive to eBay. Steve Cumings, the division’s executive director, told me Dell has a good business in selling modular data centers to webscale (and other hyperscale) customers. And they like them for the sames reasons eBay does: they’re super-efficient and super-dense. Given the right cooling setup, the units can sit wherever they have access to power and act like their own little data centers.

Although Cumings isn’t allowed to give the names of most DCS customers, or even the size of their deployments, he did note that Microsoft uses Dell Modular Data Centers to power Bing Maps. He also said deployments range from eBay’s scale to “many, many, many modules.” Elsewhere, everyone from the U.S. Army to Amazon is going modular.

Better, perhaps, but will it be Tron-themed?

But eBay’s Nelson isn’t about to let anyone steal his thunder, at least when it comes to driving the most bang for his buck out of modular data centers. eBay is about to break ground on a new facility called “Project Quicksilver” in Salt Lake City, Utah, that he says is even bigger and better than Project Mercury. It hasn’t yet released details on what will be inside, but the RFP calls for a per-rack performance of up to 40 kilowatts and overall facility scalability from 4 megawatts to 30 megawatts.

And Nelson — always hungry for more performance per watt — has a two-word message for server vendors that want to win eBay’s business on future buildouts: liquid cooling. For servers, it’s like the difference between fanning yourself and jumping in a pool, and he says it will be necessary as his racks achieve more power density.

“That will be the competitive advantage for a vendor,” he said “because we will buy it.”

All images courtesy of eBay.

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But wait, is that right? Google later in the post claims that the version of PUE that gives it the 1.14 ranking is more comprehensive than others tends to use. Google tosses in power lost to AC/DC conversions, cooling offices associated with the data center and other bits and pieces. Counting only the servers and the air conditioning gives Google a PUE of 1.06. So why might this matter? Well, PUE is the metric to beat in the race to greener data centers, and Google may have just beat Facebook’s Prineville data center by a tenth of about one percent.

From the blog post:

To calculate this number we include everything that contributes to energy consumption in our data centers. That means that in addition to the electricity used to power the servers and cooling systems, we incorporate the oil and natural gas that heat our offices. We also account for system inefficiencies like transformer, cable and UPS losses and generator parasitic energy draw.

If we chose to use a simpler calculation-for instance, if we included only the data center and the cooling equipment—we could report a PUE as low as 1.06 at our most efficient location. But we want to be as comprehensive as possible in our measurements. You can see the difference in this graphic:

The average data center PUE is about 1.8, but Facebook, with its Open Compute-designed servers and focus on designing everything from the data center all the way to the application, has a PUE of 1.07. But we’re still waiting for Facebook to say whether or not its PUE measurements include the everything-but-the-kitchen-sink metric Google is using, or the more-simplified version.

Update: Facebook said it’s 1.07 PUE includes the conversion losses Google is measuring as part of its 1.14 number, but excludes the power associated with heating or cooling the data center offices. Facebook uses its solar array to power those. Yes, that same solar array that Amazon’s James Hamilton recently scoffed at when it came to providing power in the data center. Facebook isn’t using it to power servers, just the places where sys admins have to congregate. The bottom line is Facebook still looks better than Google when it comes to this figure.

Either way, Google and Facebook are some of the few firms getting close to the ideal PUE of 1. Meanwhile, other data centers are seeing how low they can go. Recently, eBay announced a new data center  that has a PUE of 1.35, and Yahoo has designs that can deliver a PUE of 1.08.

However, some of the largest data center owners in the world, including Amazon, Microsoft and Apple, so far have refrained from making their PUEs public. Microsoft said last year that it would aim for a PUE of 1.25 across all of its data centers by April 2013. Amazon’s data center guru James Hamilton published a presentation on Amazon last year that assumed a PUE of 1.45 for the online retailer’s data centers. Apple doesn’t appear to have said anything so far, although it has hired the gentleman behind Yahoo’s chicken coop design, with a PUE of 1.08, to manage its data center build out.

I’ve reached out to Apple, Amazon and Microsoft for more information on their current PUE status and will update the story if I hear back. Update: Microsoft sent me a bunch of information on its PUE figures for its newest data centers which range from 1.13 to 1.2. It doesn’t disclose the PUE for all of its data centers, however.

So, if the question is how low can you go, then Google and Facebook have more to crow about among the biggest operators, while Microsoft is improving, Amazon is a mystery and Apple is even more of a mystery. That sounds about right.

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