Investment Opportunities

Around the Water Cooler

You haven’t heard of Blue Waters?

Is it the latest hue of auto paint, perhaps? Not exactly. The name of a trendy new cocktail? Not even close.

Rather, it’s the name of the fastest supercomputer in academia, and one of the first to embrace water-cooled server technology. This intriguing, new cooling method allowed the University of Illinois at Urbana-Champagne to pack Blue Waters’ 200,000 server cores into a space where only 19,200 air-cooled ones could previously fit.

Without water cooling, it’d be impossible to reach the power density that the computer’s keepers (the National Center for Supercomputing Applications) had in mind when it powered on less than a year ago.

“Water cooling makes it possible,” says Rob Pennington, the NCSA’s deputy director and chief technology officer, in an article by Network World. “If we had to do air cooling, we’d be limited by how much air can be blown up through the floor.”

Blue Waters can perform 13 quadrillion calculations per second – enough to simulate the beginning of the cosmos.

But why should you care about the creation of the cosmos?

For the sake of your investment portfolio, it could make a world of difference.

Once balked at by tech firms as a curious novelty, most water-cooled server systems were shelved after processors became dramatically more energy-efficient (and thus, cooler) in the late ‘90s and early 2000s. But as processing speed inevitably began creeping back up, so have the possibilities of resurrection.


One of the forerunners in the race to capitalize on water cooling continues to be Japanese technology firm NEC Corp., which began offering a water-cooled server option as early as 2005. Not above experimentation, the firm even dabbled with adapting compact cooling technology into smartphones.

IBM (NYSE: IBM) has harnessed the power of water-cooled computers as early as 1966, but made a major breakthrough in 2010 with the development of hot-water-cooled servers (about 113 degrees Fahrenheit). Hot water-cooled servers cool down processors to a manageable temperature while simultaneously saving up to 40% in cooling costs.

In 2012, the company collaborated with the Leibniz Supercomputing Center in Munich to develop a water-cooled supercomputer with the capability of 110,000 personal computers.

Hewlett-Packard (NYSE: HPQ) likewise got involved in 2006, and has offered second-generation bi-directional cooling racks since 2008 as a way to increase computational power without outpacing temperature control.

It’s not just for traditional infrastructure, either – for companies looking to rapidly expand their computing power, Sun Microsystems (now owned by Oracle Corp.) developed the Sun Modular Data Center S20, a mobile water-cooled server solution that can be up and running at a fraction of the time and cost it takes to construct brick-and-mortar server space.

It seems the French are getting in on it, too. One of France’s largest Internet hosting providers, OVH, recently partnered with Cisco Systems Inc. (NASDAQ: CSCO) to offer consumers cloud services based on water-cooled servers of their own proprietary design.

But Will It Stay Frosty?

If the U.S. Department of Defense – aka, the biggest energy user in the world – is any sign, then yes. In 2013, the DOD paid $2 million to Asetek Inc. to convert a few of their servers to be chilled with hot water.

Expect the use of water-cooled servers to grow as the government embraces the energy saving benefits, and watch for companies that search out even better ways to take the heat off of tomorrow’s processors (for example, the Tokyo Institute of Technology submerged a supercomputer in mineral oil in February).

As for the water-cooled cellphone, we wouldn’t get our hopes up.

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