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Home > Posts > ABB Initiative Targets the Data Center
March 22

ABB Initiative Targets the Data Center

Keywords: ABB, Data Centers, DC, DCIM, Utilities

Summary
Executives from ABB recently visited ARC Advisory Group to discuss the company's "Industry Sector Initiative" (ISI) for data centers. ABB has created a number of "ISIs" over the past few years. These semi-virtual organizations consist of personnel from across ABB's five divisions. The objective is to simplify the customer relationship and bring corporate-wide focus to specific markets that ABB targets for high growth. In some ways, an ISI functions like a global strategic account team in other companies, but ABB also engages its partners and R&D organization as parts of the solution and the team.

Data Center Market Landscape
The data center market is a prime target for such an initiative. The market is huge and growing fast – estimates are $80-$90 billion for 2012, and it may double by 2020. Despite its size, the data center market is growing more like a high-technology market than a mature electrical equipment market. While all types of organizations operate data centers, the market growth is led by large high-tech internet firms that rely on data centers to deliver their services (e.g., Amazon, Facebook, Google, Microsoft, etc.). Thus in the data center market, high-tech "early adopters" are major players, market leaders, and big spenders. This drives rapid technical innovation throughout the data center ecosystem. The overall trends are toward higher energy efficiency, more modular design, and higher overall reliability. ABB believes that it can contribute to all three of these data center trends and by doing so increase its presence within this rapidly growing market.

One superb example of data center innovation is the Open Compute Project, which now maintains (in the public domain) a series of data center specifications initially developed by Facebook. The company's strategy in making this material public was to create a de-facto standard that would promote innovation and drive down cost. Google, by contrast, has kept much of its data center technology proprietary, though the company has shown the highly modular architecture of its latest data centers. These consist of a large, hangar-like building that encloses modular banks of servers housed inside shipping containers. These containers are grouped in racks like honeycombs. Hangar building utilities supply power and cooling to the containerized server banks, which can be added, removed, or upgraded as a single unit.

ABB Differentiators for Data Centers
A market like this is a tempting target, especially when construction spending is flat at best in several world regions. There is no shortage of firms vying to be the "main electrical contractor, or MEC, for data center programs. ABB posits three main points of differentiation it brings to the competitive battle. These are:

  • Direct Current (DC)
  • Data Center Infrastructure Management (DCIM)
  • Data Center–Utility Relationships

 

DC brings gains in reliability and space utilization and eliminates the power conversions at the UPS and IT power supply. Every time power is transformed (between AC voltages), rectified (AC to DC), or converted (between DC voltages) energy is lost, especially at partial load conditions. The tough part of using DC is that the servers must accept 380V DC power. This configuration has been demonstrated at several sites. One EPRI study measured a 15 percent electrical energy savings, not accounting for savings from reduced cooling or the space savings that come from a simpler power infrastructure. Large data center customers (such as Google) have dictated their own server specifications for years, so the change to 380V DC should have momentum going forward.

ABB's broad and deep experience with DC power dates back to long before it became a technology for data centers. DC power transmission is the most energy-efficient solution for many situations and ABB has extensive experience with high-power DC transmission, rectification, and inversion. DC is also found extensively in wind and solar renewable energy, where ABB also has major initiatives (See ARC's 2010 report).

ABB's second suit, data center infrastructure management (DCIM), becomes most critical for the high-availability centers designated as tier 3-4 by the industry. For these installations, numerous infrastructure systems need to operate with fully redundant backup capability. Trying to design such a system with conventional equipment (such as conventional building automation equipment) will deliver inadequate results. Likewise, these systems need to be monitored continuously to ensure their reliability. But conventional equipment is not equipped to support an integrated, multi-system monitoring capability. Many data centers now operate with multiple standalone status displays, each serving a single critical system.

ABB has developed an integrated and branded DCIM solution that it calls Decathlon. This consists of ten different critical system functions for both IT and infrastructure (see figure) and can include 24/7 remote monitoring and support services. These functions originate from diverse ABB business units and products as well as from recent acquisitions and equity partnerships. ABB points to its ability to incorporate software and systems designed to operate critical systems in industries such as chemical and oil & gas.

The third ABB differentiator is experience managing all aspects of a critical interface to the electric utility. This comes from ABB's huge electric utility substation business, as well as its growing wind energy and consulting, engineering, and design services. In addition, ABB can evaluate and negotiate the opportunities for various smart grid solutions, such as demand response or electric market participation. Data centers generally have not looked into these options. They need to be evaluated for both their financial and operational impact, requiring wide-ranging expertise. As enterprises manage and coordinate their activities across multiple data centers, these opportunities become larger.

Last Word
In ARC's view there are several standouts about ABB's data center strategy. First, "the trend is their friend." Not only is the market growing fast, but trends toward energy efficiency, modularity, high availability, global operations, and support will drive more business to companies like ABB that have the global technical and business resources to be proactive in a fast-moving market. The second aspect ARC likes is that, once again, this strategy validates the wisdom of ABB's recent acquisitions. While some ABB products in this space represent decades of experience, the ability to develop an integrated solution depends on the acquisitions, investments and partnerships ABB has undertaken within the last three years. Finally, there is a lot to like about the ABB's chosen ISI structure. It is agile, effective, and fits well with the company's existing organization. While several ABB competitors are also working to grow their data center businesses, ABB appears to muster its full corporate capability to attack this market with greater ease than its major competitors.

Company 

ABB Relationship

Data Center Role

Ventyx 

Acquisition 

Energy management

Newave 

Acquisition 

UPS 

Baldor 

Acquisition 

Motors, gensets

Thomas&Betts 

Acquisition (pending)

Low voltage products

Validus 

Majority owner 

DC data center solutions

Power Assure 

Minority owner 

IT and Facility load optimization

Nlyte 

Partner 

IT asset management

Recent ABB Acquisitions and Partnerships
Contributing to Data Center Solutions

All signed-in ARC Advisory Group clients can view the complete report in pdf format at this Link.

If you would like to buy this report or obtain information about how to become a client, please Request ARC Info

 

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