Power Assure wields the power of life and death, at least over servers.

The Santa Clara, Calif.-based startup, which is currently seeking $2 to $6 million, has devised a way to fairly precisely throttle servers, networking equipment and cooling systems to reduce power costs. The system can identify and shut down underutilized equipment, or transfer workloads to data centers in different time zones or regions where power at a particular time might be cheaper.

Up to 80 percent of the power going to data centers is wasted because it's not being used in an optimal fashion, said CEO Donnie Foster, adding that Power Assure's software can save on average 50 percent of the electricity cost. For a 10,000 square-foot data center, that comes to around $500,000 per year.

Those are somewhat lofty claims, but so far the market seems to be responding positively. Facebook is a customer, he said. Power Assure also won the Smart Power award at last week's California Cleantech Open, which comes with a prize worth $100,000 in cash and services.

Facebook is currently using the software for monitoring – rather than managing – energy use. The fast-growing social networking site is adding servers quickly to meet demand, so it needs all of its servers up and running at all time. 

The software also enables Facebook to determine where to place the servers to maximize power use in each location. The company became a Power Assure customer about six months ago, and is using the software to monitor thousands of servers.     

Data centers consume around 1.5 percent of the electrical power in the country and 2.5 percent in Northern California. Those figures, however, continue to rise. To that end, many data centers owners have begun to adopt energy efficient power supplies, variable speed fans and ambient air cooling systems to slow down the inexorable climb.

Here is how Power Assure's software works: It runs detailed energy-use analyses of a company's data centers that figure out how efficient each server is at running applications. It also determines when those servers, networking devices and heating-and-cooling systems run at full capacity and when they are mostly sitting idle. It then devises a plan to automatically shut down the equipment that isn't doing much while being fed expensive power at different times of the day.

To make sure a data center can respond to any unexpected demand for computing power, Power Assure's software would leave a certain number of servers on as a buffer. Generally, even the busiest data centers, such as those run by Web service providers, need less than 10 percent of the servers for the buffer, Foster said.

Convincing data center operators to shutdown some of servers can be tough, said Foster, who was the general manager of software solutions for Americas at Hewlett Packard. (CTO Clemens Pfeiffer also came out of HP: He was the computer giant's chief architect.)

They fear delays in booting the systems back up or a scenario when the servers refuse to get back to work at all.

It takes Power Assure's management system three minutes to turn on a server that was off, and 30 seconds to wake up one that was in the sleep mode.

To use all the features in the software, Power Assure charges a subscription fee and a monthly fee that is a percentage of the energy savings achieved. Or customers can pay the subscription fee and a fixed cost for energy monitoring only.

"It took [Facebook] a leap of faith to do it. They were so impressed with what my CTO can tell them that they didn't know about," Foster said.

IBM, HP and Sun Microsystems all have trotted out energy management software and systems in hopes of capitalizing on the trend. Earlier this month, for instance, HP released a technology that caps the power a particular rack of servers can get. In turn, this allows data center managers to provision power more efficiently. A 1 megawatt datacenter can save up to $16 million a year with the technology, HP estimates. Sun, meanwhile, has released energy efficientstoragesystems.

Startups in the space include San Jose, Calif.-based Cassatt and Folsom, Calif.-based SynapSense, which deploys wireless sensors and gateways to monitor energy use and identify wasteful use. Because of the demand, and because much of this technology is somewhat familiar, VCs have begun to up their investments in green IT companies.

Aside from lining up financing, Foster would like the opportunity to deploy the software for monitoring and managing data centers with more than 1,000 servers. Showing the software can handle a large network of systems is crucial to get more customers.

So far, the largest testing has been done at a 300-server site run by Sun Microsystems, Foster said. That effort led a 69 percent energy savings, he said (see study results).

Join industry leaders and influencers at Greentech Media's new conference series Greentech Innovations: End-to-End Electricity on November 17 and 18 in New York City.