There’s good and bad when it comes to all that geothermal activity in Iceland. Yes, the volcanos with unpronounceable names can spew ash and shut down air travel. But there’s also an abundance of electricity from geothermal power, which combined with hydrothermal power, means Iceland runs off of pretty much 100 percent clean energy. That’s the backbone for an entrepreneurial idea to create a green computing cloud courtesy of Icelandic startup Greenqloud.
Greenqloud, which is one of the startups that will present at our cloud computing event Structure on June 23 and 24 in San Francisco, was created by Internet innovator Eirikur Hrafnsson (who is the CEO) and his co-founder Tryggvi Larusson and has been under development for about a year and a half. The idea is to rent space in data centers based in Iceland and sell cloud computing services to web companies and individuals all over the world that want to manage their carbon footprint and embrace clean power. The cloud computing services include virtual server hosting, data storage, scientific data processing and software as a service infrastructure.
For those not familiar with cloud computing, it’s basically scalable computing services on demand; companies like Amazon (s AMZN) are selling such services to startups and large web firms alike. Cloud computing will also contribute to a growth in the power consumption of IT and as Stanford Professor Jonathan Koomey pointed out at our Green:Net ’09 event, and Google’s Green Energy Czar Bill Weihl discussed at Green:Net 2010, there’s been an increased effort by Internet companies to add clean power and energy efficiency into the equation.
Hrafnsson told me during an interview on Thursday that Greenqloud plans to launch its beta service by the fourth quarter of this year on a small scale. After that, Greenqloud wants to launch on a much larger, public scale in 2011. The company plans to hit break-even by year two of operation and become profitable by year three. It’s raised about a half a million dollars from angel investors in Iceland and is looking to raise another round of funding to launch its service on a wider scale.
There are a few companies in the U.S. that have been working on somewhat similar ideas to combine clean power and computing, though they’re mostly straight green web hosting companies, while Greenqloud is offering green cloud computing. AISO.net offers solar-powered data center space, Greenest Host offers green web hosting, and companies like GoGreen Hosting, Sustainable Web Sites and ecoSky offer green web hosting based largely on carbon offsets. None of them seem to be printing money, suggesting the market for clean-powered web services isn’t exactly large at this point.
But Greenqloud’s service could be more attractive than some of these green web ideas, largely because Hrafnsson says that the service can save cloud computing users money. While the majority of these green web companies offer a premium service– using the marketing of the green aspect to charge higher rates — Hrafnsson says that both clean energy and data center space in Iceland is actually quite cheap and abundant so the company can charge the same or lower rates.
A large data center operator in Iceland like Verne Global (which Greenqloud is in discussions with) is able to offer a competitive 20-year fixed electricity rate, which protects the customer from volatile energy prices, and that is 100 percent clean power. Greenqloud plans to work with several data center operators, and Hrafnsson says there has been a recent “gold rush” in data center construction in Iceland — a combination of the devalued Kronor, the IT history of the country and the emission-free power grid.
Hrafnsson says Iceland can also act as the hub between web companies offering services in Europe and the U.S. Web operators commonly pay for two cloud computing services — in Ireland for Europe, and in the U.S. for the U.S. — but because of Iceland’s go-between location it can offer one cloud computing service for both continents.
If international carbon legislation does go into effect, the value of the Greenqloud service will rise dramatically. Already the UK’s Carbon Reduction Commitment has doubled energy operating costs and stopped people from building data centers in the region, according to Mike Manos, the VP of service pperations at Nokia (s nok). Koomey has said that if there was a carbon price of $19 per ton under a cap-and-trade system, a 130,000-square-foot data center that was powered by a coal-sourced utility could have to pay an additional $5 million.
Clean-powered data centers have also started to become more important in terms of PR for web companies. Greenpeace launched a campaign to try to stop Facebook from using coal power for data centers, and recently released a report on how cloud computing companies need to play more of a leadership role for legislation around IT and energy.
Overall the idea of Greenqloud is novel, but I see a few hurdles. There’s not much barrier to entry or a technology differentiator. So a data center operator, for example, or others could offer a similar service. So ultimately bringing in users to Greenqloud will be about marketing and branding, which can be expensive and daunting for Internet founder types. Also, we’ll see if cloud computing users will be willing to work with a startup in order to have a better carbon footprint. The majority of web companies just don’t care that much about clean power yet.
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