ABB Buys Controlling Interest in Data Center Power Company Validus

Swiss power gear company ABB (s abb) has made another investment in tech that can make data centers more energy-efficient. Thursday morning, ABB says it has acquired controlling interest — through its venture arm (ABB Technology Ventures) — in Validus DC Systems, an 11-year-old company that makes power systems for data centers that utilize direct current (DC), which can make data centers more energy-efficient.

I’m hearing the deal is a large — eight-figure — buyout of existing shareholders, which included Oak Hill Ventures and Validus management, and a new $8 million Series B investment. The investment could also essentially be a two-step M&A, where ABB would have first dibs to buy the company outright at a later date. Validus previously raised at least $10 million from Oak Hill Ventures.

Validus DC Systems sells data center power supply systems, along with converters and data center gear, based on DC tech. DC technology is more energy-efficient than AC (there is less energy lost in the transmission) and is also less complex and the gear can be built into smaller spaces. Validus says its DC technology can cut down on the total cost of a data center — via both energy savings and space savings — by 30 percent.

In addition to energy efficiency, use of DC technology can make a data center more reliable because there are fewer times in the system when the power has to be converted from AC to DC. DC can also pull in solar and wind power directly, though few data center operators are yet utilizing all that much clean power.

ABB already sells data center power gear like power distribution and management systems, emergency back-up power tech, circuit breakers, surge protectors, motors and building control and automation systems. ABB also provides high-voltage DC lines for long distance power transmission and has supplied one of the longest HVDC lines in the world. Adding Validus’ DC products into ABB’s mix is a natural fit.

ABB has also been focused on energy efficiency of data centers  in particular. In September, ABB announced it had invested 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 is also working with Emerson and IBM (s IBM) on data center energy efficiency.

More and more data center operators and Internet companies are starting to focus on reducing energy consumption as a way to reduce costs. According to the Environmental Protection Agency (EPA), data centers account for over two percent of energy consumption in the U.S., and that number is set to grow as more and more people buy up always-on gadgets and constantly connected computers.

You’re probably wondering why, if DC technology is so much more energy-efficient than straight AC, don’t most data center operators use this. Basically, the data center world is slow-moving and cautious, and has been using traditional tech for decades. However, now that ABB has substantially supported the technology, you can expect to see a lot more DC data centers out there.

Image courtesy of The Planet.