Michiel Frackers: Marc Andreessen remains optimistic and iXora scores big in Asia

"I am fundamentally an optimist. Whether that comes from nature or nurture, I cannot say. Part of being optimistic is keeping one's head pointed toward the sun, one's feet moving forward." - Nelson Mandela.

Churchill, Mandela and ... Andreessen?

Actually, I hate inspirational quotes, but I caught myself last week looking for tips and examples of people who kept faith in a better future during hard times. For example, I enjoyed reading back pieces from speeches by Winston Churchill, although it turned out that one of my favorite one-liners from his rich body of work probably did not come from him at all. Not everyone will experience this phrase as uplifting and positive either, but it gave me giggles and we all need to laugh in times like these:

"If I were married to you, I would put poison in your tea," Lady Astor once remarked to Churchill. "If I were married to you," he replied, "I would drink it."

Then Nelson Mandela. I think the man who, after spending 27 years in prison for the offense of being born with some pigment and nevertheless called for peace upon his release, would now call for forgiveness; and would advocate for maintaining faith in the good in humanity and keep an open mind for positive developments.

Last week I said enough about the role social media played in the unrestricted distribution of hate messages by groups like Hamas. Cynicism is the easy option now, but it leads to nothing. Therefore, this week I choose to focus on positives. I focus on possible breakthroughs and opportunities that might otherwise go unnoticed.

The Techno-Optimist Manifesto

You have to be comfortable in your own skin to publish a piece with that title this week, but Marc Andreessen is an eternal optimist. The inventor of the web browser is now a top investor and publishes interesting thinking material more often, such as earlier this year his article against all the doomsday images about the future of artificial intelligence with the headline "Why AI Will Save the World.

Now Andreessen writes:

"Our civilization was built on technology. Our civilization is built on technology.

Technology is the glory of human ambition and achievement, the vanguard of progress, and the realization of our potential. For hundreds of years, we properly glorified this – until recently.

I am here to bring the good news. We can move forward to a much better way of living, and of being. We have the tools, the systems, the ideas. We have the will. It's time to raise the technology flag again. It's time to be Techno-Optimists."

"What does this do for the bathroom tissue industry?

If only I were as positive as Andreessen. Innovations rarely have the massive impact expected at launch. The brilliant marketer Mike Linton once said to me, "when a new innovation is attributed miraculous potential (think AI or a few years back quantum computing) I always think, 'how is this going to change the bathroom tissue industry?' Usually it's not too bad.'

It is always up to the individual how a new breakthrough is applied. One person uses a hammer to build a new bathroom for his elderly neighbor, another one knocks a random passerby off his bicycle with it. It will be no different with AI, I fear. But I feel reinforced in my fascination with innovations by Andreessen's techno-optimism. Hopefully that is true of many people who spend their working lives developing or applying innovations that move the world forward.

Spotlight 9: Nvidia and Tesla down sharply

          It was doom and gloom in the stock market: only crypto rose while stock market darlings Tesla and Nvidia fell sharply

The deep woes in the Middle East led to general malaise in the stock markets, with only the crypto currencies Bitcoin and Ethereum holding up. Tesla' s quarterly results proved a major disappointment, and Nvidia suffered under the U.S. government's announcement that it would block exports of certain Nvidia chips to China.

Founder and CEO of Nvidia Jensen Huang confessed this week that if he had known in advance how difficult it was going to be, he probably never would have started Nvidia:

"That's actually the superpower of an entrepreneur. They don't know how hard it is, and they just wonder, 'How hard can it be?' And to this day I imbibe, 'How hard can it be?' Because it has to be. You have to make yourself believe that it's not that hard, because it's much harder than you think. And if I could go back in time with today's knowledge and have to go through that whole journey all over again, I think it's too much. It's just too much."

Earlier this year I wrote extensively about the success of Nvidia, which has now become one of the world's most valuable companies. Last week I reported on the unstoppable rise of Australian-origin Canva, and this week I want to elaborate on a gem of Dutch origin, iXora.

From music festivals to data centers

A few years ago I was made aware of Gunter Pauli's book The Blue Economy, in which he argues that a sustainable society and economic growth can indeed go hand in hand. I was so enthusiastic about his thinking that I e-mailed Pauli my compliments in my best German, to which he replied in flawless Dutch that he is a Belgian - so is probably used to the occasional blunder. (Us Dutch folks joke about Belgium people, just harmless banter.)

It has been proven difficult to develop this type of profitable but sustainable business. Making a profit and saving the world at the same time turns out to be a particularly complex job. So when my friend Vincent Houwert, whom I had gotten to know through his hosting company True early this century, asked a few years back if I wanted to come see his new way of cooling servers, I was moderately enthusiastic, to say the least.

After selling True, Houwert wanted to relax for a while in Curaçao, where he developed a fascination with professional audio equipment for concerts and festivals where cooling proved a problem. He sought the advice of his friend Vincent Beek, who had years of experience in the international AV industry, and it was Job Witteman, founder of the Amsterdam Internet Exchange (AMS-IX) in the late 1990s, who advised the two Vincents to look at immersion cooling, and especially at the data center market rather than audio equipment.

Why I am not neutral about iXora

Immersion cooling, cooling computers using liquid instead of traditional air cooling with fans, is not at all new in itself. But in my experience, data centers are conservative companies, sort of a cross between real estate people and system administrators, who are averse to fooling around with large tanks full of liquid into which servers must be hoisted with robotic arms. And those are the mainstream immersion cooling solutions on the current market. Hence my initial skepticism about iXora.

In particular, immersing the server in a dielectric fluid as a cooling mechanism, releasing as a residual product only hot water that can also be used for heating applications, is attracting much interest worldwide

To my surprise, however, Houwert, Beek and Witteman turned out to have succeeded in applying immersion cooling in the standard 19-inch racks, leading to enormous energy savings of the energy-hungry servers; and they had even applied for and obtained a worldwide patent for it. I immediately saw a huge global market for the method used by iXora, in which the servers are placed vertically rather than horizontally in easily removable sealed cassettes, preventing fluid leakage and keeping the server easily accessible for maintenance.

Data centers must migrate to immersion cooling

Rapidly rising energy prices are only increasing the need for data centers to transition to immersion cooling. Because with the huge increase in streaming services, cloud-based software services and, above all, the meteoric development of high performance computing and AI applications such as ChatGPT, a transition from air cooling to immersion cooling is the only option: the next generation of computer chips is simply getting too hot to be cooled by air anymore.

Job Witteman became iXora's CEO and Vincent Beek the Head of Operations & Sales, while Vincent Houwert had to withdraw from the day-to-day operations due to illness and ultimately he sadly passed away. The technical brain within iXora was already on board in the person of Head of Engineering Erwin Bleeker, whom I got to know 15 years ago at True, before he started explaining how to put a server farm together at Dell.

This is why I am not, as with Nvidia and Canva, for example, neutral about iXora: it is a product that promotes sustainability through huge energy savings, it covers a global market from its inception, and it is run by people I know and trust, which is why I also bought a few certificates in iXora's STAK (more on that later). It seems decent to mention that here.

Why iXora is a worthwhile investment

I find a fascinating aspect about iXora the fact that the first product of a startup from the Netherlands is attracting worldwide attention. Last week iXora was present at trade shows in Silicon Valley and Utrecht, while I visited iXora during Singapore Technology Week at Data Centre World Asia, the leading data center trade show in Asia.

Once again, it turned out that months of reading and talking to experts cannot offer me the same insights as a few hours talking to potential customers and partners. iXora, despite its modest booth, was crowded with companies from Japan, China, South Korea, India, Australia and virtually all Asean countries.

Based on all the feedback, I was able to draw several conclusions as to why iXora is a very interesting investment, which are too long to share in detail here. But here's the gist.

Investment analysis of iXora

1. Huge market

As an investor, this remains the most important consideration; you may have invented the best mousetrap in the world, but if there are no buyers it won't work out for you in the end. Smarter people always talk about TAM, Total Addressable Market, and iXora has that covered. Hundreds of millions of servers are compatible with iXora, so this is a billion-dollar market.

2. Competitive advantage

Briefly:

• Space optimization in data centers: iXora helps data centers optimize their space by eliminating air cooling (often half of the total floor space!) increasing capacity per square foot. In other words: more dollars revenue per square foot for the data center owner.
• Energy efficiency: initial implementation results show that iXora can reduce energy consumption in data centers by up to 50%. Every penny saved on energy is extra profit for the customer. And reduces CO2 emissions!
• Ease of use/barrier for customer acceptance: even the biggest klutz can change servers from iXora cassettes, because even I could do it in seconds.

 

3. Market access/strong partnerships

iXora has signed a global licensing agreement with Lubrizol, a subsidiary of Berkshire Hathaway, the company of legendary investor Warren Buffett. With this, it has at a stroke joined the ecosystem that also includes Intel and Eaton, greatly increasing the likelihood of worldwide sales. With these partners, no copycat will soon dare violate iXora's patent by releasing a vulgar copy. In addition, iXora itself has already built significant traction and has a global pilot series planned for 2024 covering the U.S., Europe and Asia.

4. Scalable business model

Hardware companies often get caught up in expensive production and scaling problems, which is why iXora decided to focus on high-quality R&D. Production, sales and support are handled by the licensing partners, first and foremost Lubrizol.

5. Strong investment perspective:

As high-end computing requires more and more liquid cooling, iXora's customizable design offers great potential for long-term growth. I personally expect Nvidia servers to quickly fit into an iXora chassis for two reasons:

• the form factor is not a problem, it is relatively easy to fit together Nvidia's most popular lines and a chassis from iXora
• Nvidia's chips are very energy intensive and get very hot, so there is a strong need for immersion cooling

 

6. Valuation

The current ask and valuation of iXora are considered reasonable, supported by solid insight into future revenues and profits. The partnership with Lubrizol alone guarantees a minimum of tens of millions of dollars in revenue.

iXora has already raised one million Euros from angel investors this year, but you can still participate and start from as little as 5,000 Euros. If you respond to this email or contact me on LinkedIn, I will gladly put you in touch with the founders Vincent and Job.

For those who would rather watch than read

Some people are less fond of reading and prefer to watch video, even if I am in it, which is why I also made a 5-minute video sharing my reasons why I invested in iXora. The short video is available in Dutch and in English.

Finally, nice other tech optimism:

• Basketball player starts $200 million venture capital fund. Four-time NBA champion Andre Iguodala knew more than a decade ago, when he signed with the Golden State Warriors, that he wanted to establish a network in the technology world in San Francisco to profit from after his career. That seems to be working out quite well.
• Electric vertical takeoff plane gets certification. It looks like a joke: it's electric, can hang and comes from China, what's it called? EHang. Seriously. Looks very cool, wonder if it will be a success.
• Repairing is the new cool. The Guardian sees a sustainable development in Amsterdam that gives short shrift to the fast fashion trend: it's becoming wholesale repair, rather than constantly buying new and throwing it away.  

 

Michiel Frackers is the Chairman of Bluenote and Chairman of Blue City Solutions

www.bluenote.world
www.bluecity.solutions

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