General Electric Co. made an offer to purchase Lineage Power Holdings Inc. for $520 million on Thursday, a move that will bolster the company’s ability to operate the smart grid and handle the boom in data traffic from smartphones and tablets.
Lineage Power Holdings, which is owned by Plano, Texas-based private equity firm Gores Group LLC, will pass their data management equipment and clients, such as Verizon Wireless and Hewlett Packard, to GE when the acquisition is completed in the first quarter of 2011. GE will then provide data and power management for Verizon smartphones and tablets as well as HP mobile computers.
As mobile applications surge and the push for the electric smart grid ramps up, traditional power companies have been expanding to encompass more innovative types of businesses. Instead of merely providing electricity to houses, for example, GE will now store smartphone data, provide unwavering power to Verizon’s network, and extend its ability to manage traditional IT cloud computing.
By putting data centers in-house, GE will generate revenues through charging for power and also by tapping the data storage business. All tallied, the data storage business is predicted to reach $41 billion annually by 2015, according to Pike Research.
The acquisition also is an investment by GE in green-data-center technologies, which are aimed at reducing carbon footprints. Coupled with the smart grid, green power storage offers momentous opportunities for making the transmission and consumption of energy more efficient.
The data centers built by Lineage Power Holdings were configured to run on DC rather than AC power. State of the art DC data centers are touted as being up to 10 percent more efficient than their AC counterparts, and they are cheaper to maintain as well. Therefore, the acquisition positions GE at an enviable nexus: their technology is environmentally friendly and highly profitable to boot.