“I’m a bit of a technology geek,” declares Mark Gibbens, CFO and chief development officer of Aligned Energy, a group of four companies that aims to make money by cutting down on the cost of keeping data centers cool.
Gibbens, who joined the group 10 months ago, is adept at elucidating the science behind Aligned’s method of temperature control. The company claims that its approach consumes a whole lot less energy than conventional air conditioning does.
“We inverted the [traditional] business model by not attempting to cool the air, but to take the heat out of the air. We created a technology that puts a coil, which is cooled by a refrigerant, above all of the equipment. The coil, which almost looks like a radiator, absorbs the heat and then pushes cold air back into the room,” explains Gibbens, who was once head of finance at Alcatel-Lucent and before that was director mergers and acquisitions at General Motors.
Since a big portion of data center usage fees typically go to energy costs, the company’s ability to cut its cooling bills will lure clients seeking lower prices, the company hopes. Last August, it launched its first data center in Plano, Texas. Operating under the name Aligned Data Centers, the new construction unit will offer customers “pay-per-use, on-demand” payment structures. By pitching such pricing, the company purports to free customers from getting locked into what it sees as wasteful and restrictive five- or ten-year data center leases.
Aligned Data Centers was created last year after Blue Mountain Capital Management, a hedge fund and long-time investor in the group, bought Aligned Energy, which is now the name of the holding company. The other three companies of the group are Inertech, which developed the cooling technology; Karbon, an engineering services firm that helps design data centers; and Energy Metrics, which provides clients with data dashboards.
Brought in by the company’s owners 10 months ago with the assignment of bringing the company’s systems up to a scale that’s adequate to match the fast growth its owners envisioned, Gibbens has tasked himself with getting a firm grasp on the group’s somewhat complex structure and operations.
“I believe it’s very important in the role of a CFO to really understand the business deeply. In finance, if you’re just doing the numbers but don’t understand the underlying business, I don’t think you can be truly effective,” he said in an interview last month.
Since his arrival, Aligned Energy has boosted its headcount from 80 to 130 employees, according to Gibbens, who said that the company doesn’t release revenue numbers. An excerpted and edited version of the interview follows.
What’s the company’s business model?
The company was put together over the last five years around a concept of eliminating wasted resources, both electricity and water. And the first focus of the efforts was all around the data center environment. It came out of our CEO, Jakob Carnemark, who had run Skanska’s mission critical business [a data center construction unit] and built hundreds of megawatts of data centers for other people. Over the course of his 25 years of experience in building data centers, he had discovered a number of nagging issues. People were spending a lot of money to build data, but were only using a fraction of their capacity. They spent two, three, four times as much money as they needed to.
When you’d build a massive data center, with all the IT equipment in it but with only a quarter of it filled, you’re still cooling the whole thing. You end up with a huge amount of wasted electricity and an overly large carbon footprint. At our core, we’ve been about eliminating the waste that came out of the data center infrastructure market.
Could you provide an example of how your knowledge of the business connects to your job as finance chief?
One thing I’m involved with right now is our Energy Metrics business. This is where we install controls, sensors, monitors, let’s say, inside a hotel. That allows the clients to read on a dashboard and control what’s going on inside every room of the hotel.
Why would finance be involved? For one thing, there’s an upfront cost to install all this. It could cost $10,000, $100,000 per hotel to put in all these controls and monitors and sensors. A customer might say, “I love your system. But it could be 12 months or 18 or 24 months to earn my money back. That’s a heavy bill upfront, and I just don’t have the money in my budget.” So we go back to them and say, “Let’s convert that upfront capital into a subscription or include that in the software subscription as, effectively, an embedded lease.” We’ll work with the customer’s lease to understand what its challenges are and then partner with several finance companies to deliver a financing option as we go into the selling proposition.
What keeps you up at night in terms of the job?
I’m not really kept up at night by it. But that said, we’re trying to grow a company rapidly. We’re integrating a lot of people, and I’m spending a lot of my time beginning to put in place processes, systems, and tools that will allow us to grow rapidly as our client base increases over the next few years.
What systems, processes, and tools are you referring to?
When I arrived at the company, we had a simple accounting platform. We had no accounts receivable/accounts payable system. We’ve only just gotten a construction management system. We weren’t using advanced building information modeling tools. In the course of nine months, the whole company worked to put in place a number of cloud-based systems: an expense management tool, a payables system, a billing system, a construction management tool, a lease administration system. We moved all of our existing traditional big servers sitting in our office location — our entire business, in fact — to the cloud. That’s been done by our IT folks, our finance team, our construction team.
What kinds of financial reporting does the company do?
For our current size we’re a pretty complex company. We have four entirely different revenue models. We have a software-as-a-service business with software accounting. We have a manufacturing business that makes products on a percentage-of-completion basis. We have a professional services business, so we do professional services accounting. And then we have a data center company that does real estate-based accounting and long-term leases. The complexity inherent in our business demands that we’re rigorous when it comes to our financial accounting and reporting systems.