Power Assure Gets $11.25 million Jolt of Funding

Power Assure, a Santa Clara green IT company, today announced that it scored $11.25 million in venture funding. The round was led by energy efficiency-focused investors Good Energies, and joined by Point Judith Capital and Draper Fisher Jurvetson.

Power Assure’s chief technology officer Clemens Pfeiffer said the company will use this capital to take its technology to a broader market. Its software cuts data centers’ power consumption by half, on average, the company claims.

Palo Alto Research Center (formerly known as Xerox PARC) uses Power Assure, but Pfeiffer declined to name other major customers.

Founded in 2007, Power Assure took a $2.5 million series A round from DFJ in 2009. It also previously won non-dilutive grant funding including a $5 million grant from the Department of Energy, and a $50,000 cash prize at the 2008 California Clean Tech Open. (In total, the company has raised $18.75 million.)

Power Assure’s software works like “automatic lights out” in homes, Pfeiffer says. “If you have a lot of traffic on your site or a lot of users on your app, then you need to keep a lot of servers in your data center running. During low utilization times  you don’t need them all running. You can use them for other purposes, or in an extreme case sleep or shut them down to save energy and money. That’s just as long as you can adjust the capacity dynamically.”

Companies that have expressed the most interest in using Power Assure’s solutions in 2010 have been government organizations “trying to follow the mandates of the Obama administration,” financial services companies “because of the pressure that they are under to cut costs,” and companies that operate “data centers in the ten- to two-hundred-thousand square feet range,” but may not have achieved the efficiencies of an Amazon or Google yet, according to Pfeiffer.

Jonathan Koomey, a consulting professor at Stanford University whose research focuses in part on the growth and environmental impact of data centers, said it’s a good time to be in the business of green IT services:

“Climate change is becoming a bigger more important part of companies’ risk profiles and planning. And the cost of IT has gone up a lot in the last five years. Computers have gotten cheaper, but things like cooling and power distribution have gotten more expensive to the point where the cost of buying the cooling and backup power is comparable to the cost of a data center’s IT equipment itself. Companies like [Power Assure] can save a lot of money for businesses that use data centers while reducing emissions. That’s a good thing, and a reminder that the net effect of using data centers in a rational, sustainable way — moving bits not atoms — is actually a positive for the environment.”