SynapSense Focusing on the ROI in DCIM

DCIM - short for Data Center Infrastructure Management - is the latest hot four-letter acronym in the data center industry. In seeking to differentiate itself in an increasingly crowded DCIM market, SynapSense says it is focusing on a three-letter acronym: ROI.

"If you don't have ROI (return on investment), you can have a hard time selling in volume," said Peter Van Deventer, President and CEO of SynapSense.

SynapSense makes technology that helps data center operators monitor energy use and cooling conditions through a network of sensors managed by a wireless network. It also offers software to track and manage data, which can also automate cooling infrastructure.

DCIM Market Getting Crowded
The Folsom, Calif. company was an early player in the data center optimization field, which has become much more crowded in recent years as a flurry of new companies have introduced software to manage and automate elements of the data center. Equipment vendors have also stepped up efforts to offer software to centralize management of devices and conditions within the data center.

"The DCIM market is really fragmented between different people doing different things," said Van Deventer. "We've focused on cooling efficiency. Energy efficiency is a big driver (in the DCIM market), and we've really cracked the code on how to do that."

Van Deventer said SynapSense has worked on data center cooling analyses for leading companies across a number of key industries. In some cases these projects have paid for themselves within 16 months, he said.

"We're working with leaders in many of these fields, and it's giving us an opportunity to build a business," he said. "It also gives us an important feedback loop on the best way to develop and expand our platform in the way these companies will want."

Continued Confidence from Investors
The company's backers seem pleased with its progress. SynapSense recently raised $16 million to support the expansion of its platform and sales team. SynapSense previously raised $10 million in 2007 , $7 million in 2009 and$5 million in 2010.

SynapSense will use the funding to expand its sales organization, Van Deventer said. That includes new markets in the Asia-Pacific region, such as Singapore. "We're not going to markets looking for business," he said. "We're going to markets where our customers are."

The number of companies targeting the DCIM market offers many choices to customers, and Van Deventer. With no company yet to establish a dominant "single pane of glass" to manage the data center, Van Deventer sees the potential for a shakeout ahead.

DCIM Market in 'Early Phase'
"This market is in an early phase," he said. "People are getting a lot of 'tastes' of pieces of solutions with small pilot projects. My bias is that asset management is almost a commodity in this marketplace. Companies want a dashboard, but they want to tie that purchase into an ROI story. Our platform is a tool to optimize your data center, not just a dashboard. You can optimize and fine tune your data center and then set up tracking."

Will there be a flurry of mergers as the industry consolidates? "I personally think you'll see more players die off," said Van Deventer. "In many cases, there's not a not tremendous IP (intellectual property) involved and the technology is just not that unique."

One potential issue for wireless sensor companies is the prospect that Intel, AMD and server vendors will continue to improve sensors in their hardware.  "We can certainly be complementary with that play," said Van Deventer. "The sensor point is a small part our total capabilities. Even if Intel instituted (sensors) at the board level, you still have OEMs that need to align on that."

Van Deventer said SynapSense's software and automation capabilities have helped the company build value as a platform. "We can extend into other categories any time," he said. "We're going to extend this beyond the data center floor. There are other building management tasks we can certainly do. We already integrate with (building management systems) on many jobs."