Green IT: Beyond the hype

Green IT: Beyond the hype

Although heavy-handed messaging has led to a great deal of scepticism in the market, there’s no doubting that environmental concerns are creating serious market opportunities. ARN recently brought together a group of IT industry thought-leaders to talk about myths and margins.

Brian Corrigan, ARN (BC): We are all using the phrase ‘green IT’ but what does it actually mean?

Chris Fasseau, IBM (CF): IBM has been pushing green IT for more than 15 years – we publish our own emissions through a third party and have an internal project called Big Green that will double our datacentre capability by 2010 without increasing electricity usage or carbon emissions. That’s what we take out to customers. You have to take the myth out of green IT because it delivers real business value. We [IT users] double our computing every couple of years and power requirements are four times greater so, unless we do something now, datacentres built 10-15 years ago just aren’t going to cope.

David Blackman, VMware (DB): Fundamentally we need to transform IT and the way it has been done historically is with big beefy datacentres. Green from an IT perspective is about power and cooling. There are lots of restrictions on power availability so how do we reduce that demand? At the same time, how do we give users the flexibility to move into future IT based on cloud computing, Software as a Service or whatever you want to call it? It’s providing great opportunity for the IT community to transform IT and make an organisation more flexible, but also more responsible for the care of the planet.

Thomas Fikentscher, Ingram Micro (TF): You need to understand the carbon footprint of your own organisation, your business partners and the end users in order to assess whether you are complying with regulations. Technology can then be applied to reduce your carbon footprint and adjust to future compliance issues. We have been looking to use our broad knowledge of technology internally while also talking to business partners to see if they have an understanding of what green IT really means and how they can use it for future services.

BC: So how are the resellers around the table taking the green IT message to market?

Andrew Peel, Datacom (AP): We are finding [green IT] requirements in a lot of tender activity now and discussions we are having suggest commercial customers have made the shift. They are starting to talk about green IT in the same way government does. Green IT isn’t fluffy – it has solid outcomes and efficiencies – and when you talk about it on that level it really connects with customers. The concept or sound bite level is where you tend to lose people.

Alison O’Flynn, Fujitsu (AO): We have seen a shift in market perception away from green IT being seen as a cost because there are real benefits. We think of green IT in two areas – we need to reduce the environmental impact of IT itself through our products, then use technology as an enabler. Fujitsu has a longstanding green policy and we are very lucky to leverage the work that has been done in Japan. We’ve gone to market there with objectives to save 30 million tonnes of CO2 by 2010 on behalf of our customers. It’s about positioning the strategic link between business and IT at the start rather than just talking about an IT project. What are the strategic outcomes and what can IT contribute to corporate goals around sustainability? Once you start to talk in that context, it opens up a range of opportunities instead of focusing on costs. That’s the big difference.

Iain Smale, Carbon Planet (IS): Clients that want to lower their emissions are looking at green IT because it gives them a credible statement to go to market with. I was talking to a major company in Sydney that has been told by its UK parent to reduce emissions by 20 per cent before 2010 and IT is a major focus in delivering that.

Tony Heywood, ComputerCorp (TH): In the mid-market, directors have the best intentions without necessarily having the ability to execute. That’s led to the rise of a plethora of companies such as Carbon Planet that are focused exclusively on helping organisations reduce their carbon footprint. From a director’s point of view there’s a triple play now – people, planet, profit. There are all sorts of definitions on the Web about what green IT is but, at the end of the day, a business is in business to make a profit. If they want to demonstrate economic, environmental and social responsibility in doing so then green IT, unlike Y2K, is a platform on which they can deliver it.

Peter Kazacos, PKBA (PK): That’s a bit of a dilemma because we’ve had kickback from customers that think this is another Y2K. One of the issues is that new software often requires new hardware. The old hardware gets chucked out and that leaves us open as an industry to suggestions that we’re not producing efficient software that can utilise existing hardware. Everybody has bought into the whole thing about server consolidation and using less power – it’s a good thing for the environment and for their pocket – but when they start talking about the desktop we are asking them to throw the old ones out. There are only so many the kids can have and they want new ones too.

TH: Virtualising the desktop has huge impetus for green IT because it will mean we can give the same power to users with much less infrastructure.

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CF: Virtual desktop infrastructure just shifts the problem away from the desktop. It’s more efficient but power requirements at the back-end are growing exponentially. A rule of thumb is that software efficiency will slow down faster than hardware can increase its capacity. The bigger the applications get, the harder they are to run and they are slowing down quicker than hardware specifications are increasing.

Carl Barnard, Ethan Group (CB): It’s all about knowing your customer and how to address green IT. You can lose them very quickly if you talk about green IT straight away because they think it’s another Y2K. It’s a case of being able to explain the benefits of new technologies with the green factor as an extra feel good factor.

Adrian Toole, Somerville Group (AT): We’re being led by the vendors a lot because green IT is becoming the standard sell whether you’re talking about virtualisation, blades or storage solutions. We’ve got no choice really once you’re talking to a customer with more than 200 seats. It gets harder to talk about green IT with smaller organisations because the people running the business own the business and to them it’s a big cost. If they can save some money by buying non-green IT equipment then they’ll do it. There’s also still a lot of confusion coming from government – once they make a decision about what needs to be done, green IT will be driven down into smaller business but at the moment they are really struggling.

AP: I think that confusion around compliance and what the legislation is going to look like is causing companies to hold back on their strategies and investments.

Alan Burt, Inspire IT (AB): We are in the 100-250 seats space and a lot of our clients don’t even know what their carbon footprint is, let alone started measuring it to see what benefits they can find in lowering it. We can still talk about power and cooling, and we have clients with half-full racks in datacentres because the power allocation isn’t high enough, but in terms of green being a driving factor I would have to say we’re not seeing that at all.

Robert Georgievski, Genisys (RG): We delve into the mid-market, also play in SMB and dabble in enterprise but I would have to agree that green isn’t a major focus for most of our clients. Bottom dollar is driving a lot of this – server and storage technologies are becoming more efficient but the positive impact on the environment is a bi-product.

BC: There’s a lot in the media about an impending economic downturn. Will that be good for the uptake of green IT or not?

DB: The connection between green IT and cost savings is there so I think it becomes even more relevant. Our former [VMware] CEO, Diane Greene, used to say we were almost a recession-proof technology because when things are getting tougher people are looking to reduce costs. If the government really pushes the carbon trading scheme, and we are already seeing pushback from major corporates, it would be good for the environment and for the economy because we have a strong services sector in this country and could be industry leaders. That depends on investment levels because typically we innovate and then people have to go offshore to realise full potential.

PK: Our competitive positioning with other countries is a big problem. For example, it could be a problem if there are massive datacentres in Asia chewing through power and providing our customers with hosted solutions at a fraction of the cost we can offer because we are going green. We’re already seeing some of our smaller customers signing up with overseas competitors and you don’t know what they’ve got. If we are in our own world, that’s okay because you know what you’re up against; on the international stage, green is good as long everybody plays. If they don’t we could be disadvantaged, as we are now for software development where people are being paid less to do it.

AO: It’s going to be interesting to see how it impacts on our industry if organisations, as part of their carbon liability reduction strategies, start moving their IT offshore. Doesn’t that just shift the environmental burden somewhere else and how can we be judged on the value we add to the market? I think we’re going to see a real brand issue similar to when the banks first started shifting offshore.

TH: That’s the tipping point between corporate social responsibility and profit.

IS: On the opposite side of that coin are clients who want to deal with green companies. I had a travel agency on the phone just this morning that was looking for a green datacentre so they could go public and announce they were using it.

TH: So how do you define a green datacentre?

IS: It comes back to how you define green IT. Somebody that switches to green power and calls it green IT hasn’t really gone far enough because you need to implement energy efficiencies and educate staff.

AO: The Green Grid consortium has come out with some standards for datacentres that can be applied.

TH: But given that ISO 9000 is full of holes and has ways around it, how can somebody claim to be a green datacentre and prove it?

RG: When they start using renewable energy. How can they truly be green when they are pulling a whole bunch of power?

CF: You can compare because one datacentre might draw 1kW of power and produce three times as much computing power as another. That’s very tangible in terms of energy efficiency. We’re still a way from reusable power at the moment but there are certainly things we can do today.

IS: The market is a lot savvier these days so you can’t just make green claims on your website. The ACCC [Australian Competition and Consumer Competition] is coming down heavily on ‘green washing’ and General Motors is one company in court at the moment.

AO: The ACCC guidelines are threatening $1.1 million fines for false statements around green credentials. One of the biggest corporate risks is around brand reputation.

AP: The validity of what companies are going to market with, and who governs that, is one of the biggest challenges at the moment. There will be a few companies that come out with assessment standards but how do you pick which one you adhere to?

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State of education

When ARN first held a green IT round table 12 months ago, attendees said customers were typically approaching them to find out what green IT was and what they needed to do. A year later, has there been any improvement in the level of knowledge in the market or is there still plenty of confusion?

ComputerCorp’s Tony Heywood said the biggest difference in the mid-market was that best intentions were there when they hadn’t been 12 months ago.

“There’s an awareness of economy, environment, profit and social responsibility but it’s for companies like us to partner with the likes of Carbon Planet and build credibility for that customer,” he said. “It’s execution capability.

“There has certainly been a change in the monitoring and management requirement – before it was monitoring the efficiency of a device in terms of producing a result; all of a sudden there’s a requirement to monitor the power consumption.”

Ingram Micro’s Thomas Fikentscher said everybody understood the concept of green IT, because there has been a lot of advertising around point products, but that this had also created some confusion.

“Every vendor comes out and says ‘this piece of tin is green’ or ‘this switch is green’ but you need to explain the drivers behind it like compliance and company branding,” he said. “It’s actually quite complicated and it’s not an IT discussion because it goes a little bit further.

“We have been running workshops with business partners so they can go to their end users and explain how it all fits together. We all assume it’s only about bottom line profit but it’s not – people want to make a difference because there’s serious concern about the state of the environment.”

ComputerCorp’s Heywood was sceptical and asked how much of this was driven by fears that not being green, or being seen to be green, would be commercial suicide.

IBM’s Chris Fasseau said one key challenge was changing customer perception because people often associated green IT too closely with infrastructure when the focus should be on how it can be an enabler for the rest of the business.

VMware’s David Blackman said there was a need for different marketing in different segments.

“Our target market is primarily enterprise but mid-market and SMB customers speak and listen in a different way,” he said. “The reality is that they don’t know what to ask for so there’s still a need for an education process. Once we are measuring and putting metrics in place, there’s a target to aim for; one of the big problems today is that there is no target.” PKBA’s Peter Kazacos said there was still a divide to be bridged, particularly with smaller customers.

“There are many who are feeling the pressures of the economy and the last thing they want to hear about is something that might potentially cost them money,” he said. “You don’t want to play the [green] card too hard because you might lose them.”

Somerville Group’s Adrian Toole agreed and noted that PCs which consumed less power were still more expensive. He said most SMB customers would still buy a fleet of power-hungry PCs rather than pay a premium.

“It’s about spending less to keep your people employed and make money,” he said.

Ethan Group’s Carl Barnard said customers needed to make a fundamental shift if they were really going to make a difference. For example, focusing on the power of a CPU would only result in a few dollars of energy savings but moving to virtual desktop infrastructure (VDI) was a radically different approach that could have far greater impact. However, Toole said not many people were willing to take this approach today when it meant “spending a bucket load on infrastructure”.

VMware’s David Blackman pointed out all technologies have an adoption cycle and provide greater value as they mature. He said VDI has a lot of promise but that customers were still running pilots and conceptualising before going ahead with large-scale deployments.

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Recycling needs legislation

If cost savings driven by server consolidation and reduced power requirements are the poster child of green IT, recycling (or the lack of it) is the dirty little secret. According to Clean Up Australia, 75 per cent of the 3 million computers purchased in this country every year will end up in landfill.

The Australian Information Industry Association (AIIA) has been running a recycling trial in Victoria called Byteback in an attempt to demonstrate how a scheme could be rolled out nationally. However, despite its best efforts, the Association has only been able to get 10 IT vendors signed up on the dotted line. Beyond this small number of multinationals that are prepared to take a leadership position, others are reluctant to incur recycling costs for fear of ceding competitive advantage.

So what’s going to improve the situation? PKBA’s Peter Kazacos said government had a major role to play and could make it mandatory to demonstrate recycling credentials as part of the tender process. This point was developed by Fujitsu’s Alison O’Flynn.

“We still don’t have legislation in Australia around the disposal of IT assets, which is an issue, but Fujitsu is a founding member of the Byteback program,” she said. “You can recycle 97 per cent of a computer and use the plastic for fence posts that go to farmers affected by drought.

“According to some [global] numbers there are going to be 800 million PCs that need to be disposed of in the next five years so our industry has a significant back-end challenge. I’d like to see the cost built into the procurement strategy so disposal of assets becomes part of the total cost of ownership.”

When Datacom’s Andrew Peel pointed out that this would only work if it was applied across the board, O’Flynn said this was why legislation was needed.

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Measuring footprints

The introduction of the National Greenhouse and Energy Reporting Act at the start of July will be the thin end of the wedge in terms of carbon reporting. But while most reports have suggested it will only impact a few hundred companies in the short term, Ingram Micro’s Thomas Fikentscher predicted it would trickle downstream quickly as these large corporations request green reporting from their suppliers.

Carbon Planet’s Iain Smale said people might be surprised to learn the identity of some companies that were forced to report emissions because they were above the threshold.

“It’s not just large corporations because we’ve already talked to a poppy farm with 200 staff and a chlorine company with 300 staff that have gone over the [carbon emission] threshold,” he said. “Now they have to report by law and, if they don’t, there’s a $250,000 fine.”

Fujitsu’s Alison O’Flynn said one of the hardest challenges was that most customers didn’t know where they sat on the emissions list. Initial measurement is a vital first step before companies can start looking to reduce their carbon footprint.

“[Some] companies that might be exposed to that legislation aren’t even reporting or registered because they aren’t aware,” she said.

IBM’s Chris Fasseau agreed most companies hadn’t started measuring their carbon emissions and, to make matters worse, many that had were struggling to work out whether their levels were good or bad.

“How would David Jones, for example, compare itself to Myer in terms of carbon emissions? Does it run a more efficient fleet? Is its IT better?” he asked. “There are so many unknowns in that space but you need to start measuring and set targets from that baseline.”

Datacom’s Andrew Peel said the integrator went through an initial green audit process 12 months ago and would be applying more rigorous assessment this time around.

“It was fairly straightforward last year, because it was still new in the market, but it was useful as a snapshot,” he said. “As long as you have the right people within your company aligned to provide information to organisation conducting the audit, it’s quite a straightforward process.”

Fujitsu’s O’Flynn agreed there was a common misconception in the market that establishing a carbon baseline was an overwhelming process. Furthermore, she blamed the industry for creating the problem because of the language that was being used to describe it.

“People think it’s onerous when it’s actually quite simple to get a snapshot of where your company is at,” she said. “As an industry we have a responsibility to break down some of those myths and help customers understand that it’s common business sense.”

PKBA’s Peter Kazacos said the IT industry would have a critical role to play as suppliers of equipment and needed to lead by example.

“The role of each of our companies is very interesting because you can’t go out trying to sell the green IT concept with a big massive laptop. Why would your customers buy into it if you haven’t?” he asked. “Smaller customers often say ‘you’re about the same size as us, so what are you doing?’ If you don’t act responsibly then you can’t ask them to.”

Fujitsu’s O’Flynn agreed this was fundamental. She has been writing the company’s green strategy locally, which included demonstrating that Fujitsu was following the same rules it preached to customers.

VMware’s David Blackman said the whole discussion at ARN’s green IT round table had been about opportunities for the IT industry.

“From the delivery of a box to its disposal there’s a carbon issue around it. That creates opportunities for partners in different market segments,” he said. “The last 12 months has seen quite an evolution. Green IT solutions have to be flexible and cater for future growth but they also help you go to bed at night thinking you’ve done good things as a corporate citizen.

“We are really in the early adopter phase but there’s no limit to what we can do as long as there’s no limit to imagination.”

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Will green IT eventually become the standard?

Like so many good ideas, the concept of green IT has been hijacked by marketing departments to the point where almost anything with a plug is being sold as an environmental solution. Not surprisingly this has created scepticism in the market as customers try to navigate their way through the hype but, as green IT continues to mature, will it eventually be incorporated into the industry so that green solutions become the only solutions. Somerville Group’s Adrian O’Toole thinks it will become standard within 3-5 years.

But even if that is the case, ComputerCorp’s Tony Heywood said green IT would remain an area of constant innovation and improvement.

Fujitsu’s Alison O’Flynn said the CIO of one client she has been working with recently got a key performance indicator on green IT after the first piece of work was completed.

“I think that’s a fantastic example of leadership, that they’re prepared to change the metrics,” she said. “They’ve recently announced to vendors at their IT summit that green IT is one of their top four strategic goals; they want to be known as the leading green IT organisation in Australia.

“Vendors have been given two weeks to tell them whether they have ISO 14001, what their green policy is, and if they haven’t got it [ISO 14001] then when they’ll have it by. Those examples are few and far between today but that’s where we’re going to get to. It will be normal business that’s linked to your profitability.”

Carbon Planet’s Iain Smale said some tenders already required companies to demonstrate that they are carbon neutral before responding. He cited commercial flooring giant, InterfaceFLOR, as an example and said he had been approached by a couple of transport companies that wanted help so they could respond to the tender. He also noted that a publishing company working for one of the major banks had been told to show some green credentials if it wanted to retain its million-dollar contract.

Fujitsu’s O’Flynn said there had been a real shift in tenders during the past six months so that green IT was now integrated throughout the response rather than tagged on the end as a value add.

Somerville’s Toole said large enterprise organisations were increasingly being asked to meet global compliance requirements around green IT but that it wasn’t yet being driven down through the broader market.

Datacom’s Andrew Peel agreed it was still early days and said it was difficult to say at this stage whether companies were winning and losing business as a result of green credentials.

“A lot of organisations have decided [green IT] is the right thing to do in line with their corporate strategy but whether they are basing purchasing decisions on it is still undetermined,” he said.

ComputerCorp’s Heywood said Y2K compliance was only treated seriously as an issue in the final two years leading up to 2000. Fujitsu’s O’Flynn said this was a very good parallel because we are only 18 months away from carbon trading and businesses still don’t have a financial model to handle it. While there were still a lot of mixed messages in the market, she expressed the hope that the term ‘green IT’ would disappear within 18 months.