Aligned Energy’s Kirk Offel on Managing Risk in Customer Bases: “It’s About Shifting Responsibility”

Oct 2, 2017
by Josh Anderson

CHICAGO, IL – Managing risk in the enterprise flight to Cloud is a common topic of conversation at CapRE events. At our Chicago Data Center Summit earlier this year, we heard from Kirk Offel of Aligned Energy for his thoughts on how he approaches risk. Especially as it relates to both Cloud and enterprise customer bases.

“The truth is that what you’re talking about really comes down to shifting responsibility,” replied Offel. “Risk increases, let’s just say, on a daily basis. If you’re going to deploy capital, and you’re in a line of business that doesn’t generate revenue, will you ever be able to stay on top of it? You can’t get ahead if you’re trying to get even. The best thing you can do is try to shift responsibility out. So that’s what we’re seeing in Enterprise. It’s a big shift of responsibility, because they can’t keep up with the massively evolving trends.”

Kirk Offel, Aligned Energy

Next, Offel leveled with us. “So we’re a two year old start up,” he said, asking the room if anyone had heard of Aligned Energy yet. “The value of being a start up is that you change a lightning speed. Digital [Realty] won’t evolve as easily. For us, we have a very advanced engineering CTO and he envisioned the next evolution of data centers as micro grids. So he’s trying to push the industry to its next evolution, so that it gets to a point where…the data center itself is a cloud utility.”

What he means by that, according to Offel, is that data centers, as we all know, have the ability to island themselves off of the grid. “As long as they have the batteries and fuel and SLAs and so on and so forth,” he cautioned. “So the goal is to try to figure out how we can take, as a cloud utility, all of our generation capacity and put it on the grid, and make it so….that we’re actually exporting power back to the grid.”

“The benefit to the local utility provider is that there’s a reduction in capital from an opex perspective,” he concluded. “Because there is a data center operator in some market that is willing to maintain the gens themselves. That’s just the first level. It’s going to drive us into a more resilient battery level. As a data center operator, you will turn your data center into a micro grid. We’re not the first ones to come to this, but we may be the first to put all of our money into it. Aligned Energy’s business strategy is to become a cloud provider that will someday be able to provide a micro grid, as well as service the 82% of the enterprise that has yet to adopt.”

For some bonus perspective, we asked Offel what he expects to see change on the demand side in the next year or two. “Well, there are two things,” he responded. “As a data center operator, the biggest competitor will always be 1)s ourselves and 2) the enterprise. The enterprise believes that they can build it own it operate it a faster and more economically efficient scale than we can as a data center owner and operator. So the trend is to try to get ahead of that. Which means that I need to have more scale-speed and I need to be cheaper. So what I see is that the commoditization of our industry, which isn’t necessarily a bad thing, will just be trying to figure out how we can all engineer things. I think the trend will be to continuously drive the price of the megawatt down. There’s a lot of ways  to do that, to get them down faster and accelerating.”


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