Berkshire Hathaway Energy Takes Stake in eVolution Networks

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Warren Buffett has always been tech averse, proclaiming that he doesn’t understand technology companies, so he has no basis to make an investment. But, that doesn’t mean that Berkshire Hathaway avoids tech companies. In addition to its ownership of 79,565,115 shares of IBM, Berkshire through its subsidiaries takes stakes in tech companies that relate to its various businesses.

IES Holding, a subsidiary of Berkshire Hathaway Energy, has taken a stake in eVolution Networks, an innovator in energy savings solutions for Mobile Network Operators (MNOs).

Based in Israel, the company bills itself as the first company to provide operators with a purely software-based solution that slashes energy consumption on the base station level.

IES Holding’s $22.5 million investment was done jointly with GE Ventures.

According to eVolution Networks, the company plans to expand its worldwide presence and promote its solutions to new industries, such as data center energy management.

“Energy costs are a huge problem for mobile operators,” said Roy Morad, CEO of eVolution Networks. “Operators are constantly forced to expand their network to support the growing data demand from subscribers and the Internet of Things (IOT). However, the way networks are designed today doesn’t allow operators to wisely “right size” their energy use according to live traffic demand. eVolution Networks’ Smart Energy Solution eliminates this problem.”

eVolution Networks’ Smart Energy Solution is a software-based solution that analyzes the mobile network’s traffic needs and adjusts the use of the network’s resources based on real-time demand from subscribers. This adaptive and unique approach to managing the network’s resources has been deployed by Tier-1 operators such as Telefonica Group and has proven to save millions of dollars annually on energy bills.

“This team’s management experience and strong technical background have helped establish eVolution Networks as a leader in the telecommunications energy efficiency market. eVolution Networks is poised for tremendous growth as more customers and business partners realize the benefits provided by the technology,” said Bill Fehrman, president of Berkshire Hathaway Energy subsidiary IES Holding. “This funding will be used to capitalize on this potential, boost the company’s growth worldwide and establish eVolution Networks products and technology as an industry standard.”

eVolution Networks notes that worldwide figures show the telecommunications industry is responsible for 3 percent of the global energy consumption. This translates to an estimated $20 billion spent yearly by mobile network operators. Smart Energy Solution offers an answer by making the networks as efficient as possible through data analysis and advanced load management.

According to the company, eVolution Networks’ Smart Energy Solution reduces up to 35% of the annual energy consumption of mobile operators by analyzing the network’s needs in real time and managing the network resources accordingly from the base station to the data center.

Already in Action

The company’s Smart Energy Solution has already been successfully deployed by tier-1 operators such as Telefonica group.

“Given that energy costs are the largest portion of operating expenses for telecom operators, a 35 percent reduction in energy usage with Smart Energy Solution will have a significant impact on profitability,” said Jonathan Pulitzer, Senior Director at GE Ventures. “GE Ventures is investing in eVolution Networks because of this potential for savings and the positive impact on global energy consumption.”

About IES

Berkshire Hathaway Energy’s IES Holding is an operating subsidiary that integrates, aggregates and manages residential and commercial load, generation and storage assets and related technologies in concert with economic or market based constructs to reduce overall energy system costs and improve grid reliability.

© 2015 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.