Green Tech Startup Pitches SaaS Energy Tool

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A startup founded by former executives from SAP and Oracle has rolled out a software-as-a-service offering designed to help large organizations reduce costs through better management of natural resources.

The Environmental and Energy Management system from Hara, of Menlo Park, California, collects data about the resources consumed across an organization, including energy and water, as well as the waste produced, such as carbon emissions.

It then recommends steps to reduce costs and meet environmental goals, and provides online tools for tracking progress. The steps can cover the gamut from renewing insulation at factories to using run-off rainwater for water supplies and switching to ecofriendly "biomass" boilers.

Hara was founded in 2007 and is funded by a US$6 million investment from Kleiner Perkins Caufield & Byers. It has signed up 12 customers, some of which helped develop the product, including Coca Cola Co. and the city of Palo Alto in California. It is now ready to market and sell the product more widely, said cofounder and CEO Amit Chatterjee.

He argued that the period when companies can achieve big savings through "labor arbitrage," or sending work overseas, is coming to an end, and that companies should focus instead on managing energy use and greenhouse gas emissions, which may soon face wider regulation.

Palo Alto is using Hara's product to fulfill a citywide mandate to reduce emissions. It started by developing individual plans for each of its departments but decided that method was too complicated.

"It became clear that there were a lot of different ways to do your greenhouse gas inventory," said Karl Van Orsdol, an energy risk manager for the city. "I was juggling many spreadsheets with many different assumptions, and we felt like we wanted an enterprisewide management system for this."

Palo Alto chose Hara because it can be linked to the city's SAP system, which it uses for risk management and finance, and because it has "really great graphics" that are understandable to people who aren't necessarily environmental specialists.

"It also has an action management module that allows each department to put in, say, five or 10 actions they're going to take in 2009, and then the project managers for each of those actions can go online and see how up-to-date and on budget they are," he said.

If Palo Alto has done its calculations correctly, it expects to save about $600,000 per year starting in December, mostly from reduced electricity and gas consumption, Van Orsdol said.

Hara refused to disclose pricing for its product for this story. Its Environmental and Energy Management system has four modules -- Discover, Plan, Act and Innovate -- and customers can buy each module separately and pay a subscription based on how many facilities they manage, Chatterjee said.

Van Orsdol said Palo Alto negotiated a subscription fee of $24,000 per year for all four modules. But he said the city probably got "a significant discount" because it helped develop the product.

Hara has plenty of competitors, including SAP, which recently bought carbon management vendor ClearStandards, as well as Enviance, Verisae, ZeroFootprint and others.

Chatterjee claimed that Hara is unique in the way it can make detailed recommendations for the steps organizations can take to reduce emissions. It can also model what-if scenarios, such as how the payoff for a certain action might change if the price of a carbon emissions permit goes up or down.

The service collects the energy usage data by tapping into ERP (enterprise resource planning) systems, utilities, spreadsheets and any other systems that contain relevant data. Customers will often start with a service engagement with Hara to get their organization ready for monitoring, Chatterjee said.

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