ABB has purchased a controlling interest in U.S.-based Validus DC Systems, a provider of direct current (DC) power infrastructure equipment for energy-intensive data centers.
DC technology is substantially more energy efficient than traditional alternating current (AC) technology for electrical distribution. DC systems are also less complex, requiring less space and equipment, resulting in considerable additional savings in real estate and capital expenditure. The investment in Brookfield, Conn.-based Validus complements ABB's strong technology platform to bolster its entry into the $24-billion market for telecommunications and data center power infrastructure.
"DC systems provide data centers with a game-changing advantages in both operational and capital cost savings, and we believe they'll be widely adopted in this energy-intensive industry," said Tarak Mehta, head of ABB's Low-Voltage Products division.
Data centers can use 100 times more electricity than a similar-size office building. DC technology can improve their energy efficiency by 10% to 20% compared with AC systems by trimming power conversion losses. It also reduces power equipment, installation, real estate and maintenance costs, resulting in a saving on total facility costs of up to 30%.
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 firms working in electric vehicle charging infrastructure, smart grid communications, wave power generation, cybersecurity for utilities and wind farm efficiency.
Both parties agreed not to disclose financial details of the transaction, which includes an option for ABB to fully acquire Validus.