Earlier this year, Cisco announced it was spending $107 million to buy JouleX, a startup with technology to reach out and measure, monitor and manage energy use for all manner of IT equipment. That’s a pretty hefty premium on the $17.2 million in VC raised by the Atlanta-based startup with big corporate clients including Sony, Coca-Cola, Equifax, Nestle Water, Schneider Electric, Danske Bank, and Deutsche Telekom -- and it raises a couple of key questions for industry observers.
The first one is, what does the JouleX acquisition indicate about Cisco's efforts to revitalize its EnergyWise business line, launched in 2009 to bring energy awareness to routers and switches, office IT equipment and building systems? The second question is, what can JouleX’s technology, combined with Cisco’s networking heft, bring to the table that the masses of other “green IT” systems out there can’t?
Last week, Cisco and JouleX execs held a virtual press conference aimed at answering that question, featuring partners like energy services giant Schneider Electric, pilot customers like Coca-Cola, and school and health care clients making use of the Cisco EnergyWise Suite, as the two companies’ combined energy management solutions are now called.
At least on the face of things, there appear to be quite a number of differentiating factors in Cisco and JouleX’s plans for creating an energy-aware, networked IT platform, whether it’s in the highly instrumented realm of data centers, the heterogeneous and distributed realm of office IT environments, or even in the emerging world of the “internet of things.”
Here are some of the highlights of Thursday’s question-and-answer session that help illustrate how Cisco and JouleX are seeking to push the green IT envelope, starting with the challenge of incorporating the universe of existing IT equipment, and moving from there toward new frontiers in energy-aware devices.
1) Remote Management Across Multiple Platforms – With No Client-Side Software Involved. One of JouleX’s key differentiators in the office IT space is that, unlike most of its competitors, it doesn’t require installation on the devices it’s seeking to manage. Instead, it promises to run all its energy management tasks from a single server across existing device networking platforms, whether those are office PC network management from the likes of IBM and HP, virtualized infrastructure management from VMware, or Cisco’s Call Manager system for voice-over-IP telephony.
“We essentially hook into those systems to learn the assets that are included there, to learn where to go out into the network to query those devices for energy utilization and consumption, and a bunch of other analytics over the network,” is how Tom Noonan, JouleX founder and general manager of the business under Cisco, described it in Thursday’s press call. So far, it’s got about 70 protocols it supports across thousands of different devices, and it’s constantly adding to that list, he said.
That’s key to getting JouleX up and running across multiple IT environments, and keeping its energy-saving potential consistently performing through computer, printer and other IT equipment replacement cycles, software upgrades, and other everyday changes that can make client-based software a hard sell for big enterprise deployments, he said.
That was a big plus for Jan-Peter Evenhuis, IT administrator of Nij Smellinghe Hospital, a Dutch hospital that implemented JouleX and has since achieved a 30 percent reduction in IT energy use. While it started out deploying JouleX for its Cisco-based IP telephony system, the hospital quickly started using it for its 1,500 or so desktop PC users as well, largely because “we found that JouleX does not require a software agent on the PCs, making it really easy to install,” he said.
It’s also a big plus for energy services providers like Schneider Electric that want to incorporate IT plug loads, which can make up 25 percent to 50 percent of an enterprise’s electricity bill, into a broader energy management portfolio.
“From our perspective, any time on the energy management side when we start to reach into that” IT environment, “there’s a lot of resistance,” said Marcus Craig, Southeast regional sales manager for French energy services and power equipment giant Schneider Electric. “We’re talking about agencies that have thousands and thousands of devices.”
Installing and maintaining client-side software on all those devices just isn’t practical for Schneider’s building-side energy management work, he said. But with JouleX, which is one of several of Schneider’s EcoStruxure technology partners, “We can deploy this, and crawl through their systems,” and then wrap those IT energy savings into Schneider’s existing building HVAC and power equipment efficiency services, he said.
Indeed, IT load is becoming a critical part of Schneider’s overall energy services offerings, which typically guarantee customers a certain guaranteed energy use reduction, leaving Schneider on the hook for missed targets. “When we implement JouleX as part of our project, we have engineers do everything and then some, in terms of metering the equipment, modeling the building, and verifying energy reduction,” he said.
Noonan noted that these energy bill reductions in distributed office environments can range from 35 percent to as high as 60 percent. Beyond that, however, the nature of JouleX’s architecture can help customers discover things they didn’t know about their IT environment, Craig said. One school district client, for example, found that it actually had 3,800 IT assets on its network, instead of the 2,000 on its roster, after deploying the technology. “We didn’t even think of this initially as an asset management tool,” he said, but now it’s another part of the value that organizations are deriving from the tool.
To pay for it, Cisco and JouleX either price the offering on a per-device basis, or for more complex virtualized environments, on a “megawatt pricing” model, Player Pate, JouleX’s director of marketing, said. As for securing this new system control capability, Noonan, whose previous firm, Internet Security Systems, was bought by IBM for $1.3 billion in 2006, said that JouleX has applied that experience to its security architecture. On the other hand, given that JouleX’s software is deployed on a server within a customer’s data center or office environment, “We’re only as good as the internal security of the enterprise itself,” he said.
2) Tapping Built-In Energy Smarts Across Generations of IT Gear. That last point brings up an important challenge for services and software that promise big energy savings by managing IT equipment sleep cycles, power capping and other such functions. That challenge is, how do you convince customers that controlling energy won’t interfere with the mission-critical work that all that IT equipment is doing?
Cisco’s EnergyWise protocol, which started out as part of Cisco’s Catalyst switching product line, is helping JouleX “to precisely measure the energy usage of devices, and also giving a very granular control of energy usage of devices,” Noonan said. Since then, EnergyWise has been picked up by some partners and customers for use in measuring and managing energy use in servers, PCs and other IT equipment.
However, it’s important to note that Cisco abandoned its building energy management product line in 2011, a move that seemed to put a halt to EnergyWise’s promised spread outside of IT. While it continues to make EnergyWise available to partners in the space, it seems clear that the JouleX acquisition was, at least in part, an effort by Cisco to beef up that offering.
Data centers are the epicenter for IT energy management, being the most energy-intensive and mission-critical IT assets for big companies and institutions. On that front, JouleX is competing with a host of data center specialists, including Power Assure, Sentilla, Vigilent and RF Code, as well as IT giants like HP, IBM, Intel, Microsoft and Oracle that are integrating energy data more closely into their data center infrastructure management (DCIM) platforms.
Asking data center operators to start changing the way they manage their IT to conserve energy can be a challenge. “There are only a few of them willing to do the power capping and dynamic power controls we’re offering,” Noonan said. But as more energy-aware gear gets deployed, and as energy management becomes more sophisticated, opportunities are emerging.
One such example is a project with Deutsche Telekom, and is aimed at “load-adaptive networked computing,” he said. The idea is to use the native ability of Cisco’s new Catalyst 2960-X Series switches to power themselves down in ways that “deliver the right amount of capacity to satisfy the load on the network,” he said -- for example, turning down switches during low-volume early morning hours, or routing traffic according to energy costs in different regions.
Over the past twelve months or so, “We have gobs of information that shows us they think they can save $325 million on switching capacity [electricity costs], based upon marrying the capacity required with the demand,” he said. That’s nearly one-third of Deutsche Telekom’s annual 1-billion-euros-per-year energy consumption bill, he said.
“Now, they’re slowly bringing that on-line and into operation, because Cisco now has that ability on their switches, and will be rolling that out over time,” he said. The long-term goal is to help sell Cisco switches by offering customers a faster payback on energy savings, he said. Looking at data center deployments, “We’re moving up that stack, and being able to solve energy issues, being able to help customers with capacity and energy constraints,” he said.
Consider it one of many initiatives underway by Cisco and competitors like Alcatel-Lucent to squeeze efficiencies out of networking -- as well as a potential proving point for data center management that combines the energy smarts of new equipment with the willingness to put them to use amidst day-to-day operations.
3) Pushing Energy Intelligence Into the Wide World of Machines. Last week, Cisco held its Internet of Things World Forum in Barcelona, where it staked its latest claims to playing a role in a future where pretty much every device on the planet is networked somehow. We’ve been tracking similar pronouncements of giants like Cisco, General Electric, IBM and others, as well as startups like Ayla Networks, in their quest to colonize the world of intelligent, networked machines.
Cisco’s work in this field goes under the “internet of everything” rubric, and includes a host of smart city projects linking parking spaces, garbage cans, street lights and other assets, as well as underlying network technology development to deliver the low-cost, high-durability gear to embed in these kinds of everyday devices.
With JouleX, it now has a partner that can bring energy awareness and control into the mix, and Noonan noted that there are “several pilots going on with major corporations” to test out those capabilities. Coca-Cola, the Atlanta-based beverage giant, is one such partner, and the devices in question are its vending machines.
“Coca-Cola...has about 13 million of these coolers that need to be upgraded in terms of understanding what’s happening with each of those devices,” he said. The idea is to learn “not only the buying behavior -- what’s happening in terms of sales on these machines -- but understanding what the cooling needs are relative to buying.”
That could allow energy-saving measures like turning down cooling during early morning hours when nobody’s buying, then ramping it up when demand picks up, he said. It could also help in remote monitoring to match energy usage patterns to predictable maintenance issues, guiding service crews to machines that are exhibiting signs of breakdown, or collecting point-of-sale data to guide business decisions, he said.
Cisco and JouleX haven’t officially unveiled this Coca-Cola partnership yet, so it’s hard to say how it might turn out. But it’s easy to imagine a lot of customers being interested in reaching out to the wide world of devices that are plugged in and left on all the time, and finding ways to manage them to save wasted energy -- that is, as long as that doesn’t lead to mistakenly delivering room-temperature sodas to customers.