First, I’m very happy to share that the 2nd annual NextWave Greentech conference, produced by Greentech Media, will be held on August 5th in Menlo Park. After last year’s conference sold out, and was so much fun, the GTM folks asked me to chair the conference again and I am pleased to do so. So save the date!
After the recent Facebook/Oculus announcement, I was struck by Fred Wilson’s blog post on the subject. Essentially, Fred argues that this deal, along with the acquisitions and explorations by Google (such as Nest, driverless cars, etc.), is a sign that these big cash-rich tech giants are looking around for what’s next after mobile. He describes it as “call options on the next big thing.”
I always love Fred’s insights on tech and venture capital. And I have some news for these big tech companies -- they’re already engaged in the next big thing: the energy-data nexus.
You may have heard of the energy-water nexus, which is the idea that water use and energy production are so intertwined that they can, to a significant extent, be thought of as two sides of the same coin. The same thing is happening, in remarkably similar ways, with energy and data. Energy (supply and consumption) and data (gathering, analysis and automation) are so increasingly intertwined that if you are in the IT industry, whether you realize it or not, you are already deeply engaged in the energy industry.
While it’s been suggested that the Google Glass has a lousy battery life on purpose, we all know that battery life is a major obstacle to maximizing the use of mobile devices. Anyone who’s ever tried to live-stream an entire March Madness game on their phone knows that the way it sucks your battery dry is one of the biggest reasons why you can’t yet untether from your TV and cable box the way many in the IT industry would like. The talk of Facebook using drones to push higher bandwidth around the world raises similar questions. Powered how? Without energy innovations to further reduce the energy consumed per device function, and/or to extend battery life, energy is a severe limitation on what the IT industry wants to do next.
And at the cloud level, while there have been significant improvements in power usage effectiveness at data centers, the increasingly large consumption of data still means increasing reliance on energy by our IT infrastructure. Carbon emissions related to data center operations are projected to grow 7.1 percent per year through 2020, and that’s inclusive of further PUE gains. While that’s phrased in terms of emissions, one can extrapolate the energy consumption growth that represents. With energy availability (and reliability) a growing challenge for a voracious IT industry, is it any wonder that leading firms like Google and Apple are getting more involved in doing their own power generation?
But that’s the evidence that data consumption requires energy consumption, and thus is limited by energy consumption. What about the optimistic side of the nexus? In my opinion, this is the really exciting part of the story. Energy data is big data. Just look at the Y2E2 Building at Stanford and its 2,600 data-gathering points. One thousand buildings like that, measuring those data points at one-second intervals, would create 6 petabytes of data every year, according to AutoGrid. What else could that data be used for? Well, ask Google and Nest. What else can you do that could be revenue-generating with data indicating occupancy at a granular level, energy consumption at a granular level, etc.? A lot.
Even more exciting, at least to me, are IT-enabled negawatts. Once you have all that data, you can reduce energy consumption, the equivalent of increasing energy production elsewhere. That can be done as a reaction to conditions on site (just to reduce the electricity bill) or as a reaction to conditions on the grid. Add in advanced real-time grid analytics, networked energy storage for discharge on demand, etc., and up to a pretty big extent (while obviously not 100 percent), you start to see how data can be a substitute for energy production -- and therefore a big revenue generator in its own right. Data for energy can unlock significant wasted capacity and, as our friends at Noesis have recently shown, it can unlock a lot of dollars along the way. Such big market potential, given the significant overlap between data and energy, won’t be ignored by the world's biggest IT companies.
As Christian Belady of Microsoft put it: “Data is really the next form of energy. Instead of distributing power, we should think about distributing data. It’s far easier and more efficient to store data than [it is to store] power. I view data as just a more processed form of energy.”
So if the big IT giants are looking for the next big thing, I’ve got news for them: They’re already in it. The energy-data nexus can be that “platform that can plausibly be the next big thing,” as Fred puts it. Out of necessity, if nothing else. But I think, based upon the recent moves at Google in particular, the IT giants will be tackling the energy-data nexus as an opportunity.