Global power specialist ABB has purchased a controlling interest in Validus DC Systems, a leading provider of direct current (DC) power infrastructure equipment for data centers. Financial terms of the transaction were not disclosed, but include an option for ABB to acquire the balance of Validus shares.
The Validus deal boosts ABB's presence in the data center power market, following up on a $1.5 million investment last year in Power Assure, which makes data center management software. ABB also sought to acquire UPS vendor Chloride, but lost a bidding war with Emerson.
ABB's deal for Validus also may boost the prospects for DC power distribution, which is common in telecom facilities but seen far less often in data centers, where AC remains the standard. Advocates of DC power distribution say it offers greater energy efficiency, citing the loss of power through multiple AC/DC conversions to charge UPS batteries.
But many data center professionals remain leery of DC power, and some vendors argue that high-voltage AC configurations would be a better approach than DC power distribution.
ABB clearly sees DC power as a growth area. “DC systems provide data centers with a game-changing advantage in both operational and capital cost savings and we believe they will be widely adopted in this energy-intensive industry,“ said Tarak Mehta, head of ABB’s Low Voltage Products division.
“With ABB’s strong financial backing, their long-term experience in DC technology in other industries, as well as their highly-skilled technical support and vast market reach, we can quickly expand the availability of our DC systems to cost-challenged data centers worldwide,” said Rudy Kraus, Chief Executive Officer of Validus DC Systems. “This end-to-end solution will help facilities save millions of dollars in energy and installation costs without sacrificing reliability.”
The investment in Validus DC Systems was made through ABB Technology Ventures, the company’s venture capital arm, which invests in strategically interesting early and growth stage companies. ABB has also made VC investments in companies working in electric vehicle charging infrastructure, smart grid communications, wave power generation, cyber security for utilities and wind farm efficiency.
Validus was founded in 2002 as a spinoff from equipment vendor DSA/Encore, and has been developing a line of DC power products. In 2007 the company received $10 million in a first round of venture funding led by Oak Hill Venture Partners. One of the best-known Validus projects is a data center at Syracuse University designed by IBM to showcase DC power and other promising approaches to energy efficiency.