The business case for green IT

30 Dec 2009

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While green IT is linked to lower carbon footprints and good corporate social responsibility, for most companies the main benefit is the financial savings, writes GORDON SMITH.

Plenty of activities have slowed due to the recession, but it’s safe to say global warming isn’t one of them. Consequently, green initiatives have managed to hold their place on the agenda of many companies despite more immediately obvious concerns of a financial nature.

The simple explanation for this may have nothing to do with corporate social responsibility and more to do with sound environmental strategies dovetailing very neatly with the other pressing business issue of the day: cost control. The consensus from technology suppliers and market analysts is that it’s hard to see where cost-efficient IT ends and energy-efficient green IT begins. The two seem wrapped up in one another but in any event, it is making the business case for green IT that much easier to argue.

“In the vast majority of cases, investment in things you can loosely call ‘green IT’ is about good, old-fashioned efficiency and it justifies itself on that basis,” says Simon Mingay, vice-president of research with Gartner Ireland. “The vast majority of programmes and initiatives under green IT have stood up pretty well over the past 18 months and that’s the reason why.”

A survey from Gartner earlier this year found 60pc of European businesses will continue to make green IT efforts and around one third said they would allocate more than 15pc of their IT capital budgets to green programmes. Two thirds of respondents said the recession had made no impact on their green initiatives.

External factors may soon make the economics versus environment debate moot. Mingay points out that energy costs are set to rise substantially ahead of inflation in the years ahead. “If you factor that in, it’s another reason to do it. The days of cheap energy are over and efficiency is going to be more important for organisations. IT is quite energy-intensive,” he says.

What’s more, most observers agree a carbon tax is a matter of when rather than if, which will force organisations’ green IT plans to shift from ‘optional’ to ‘obligatory’. The European Commission has already called on the IT industry to step up efforts to cut emissions as part of its own green IT strategy to reduce emissions 15pc by 2020. The EC says this can be achieved through improved monitoring and management of energy use in factories, offices and homes. It claimed smart-metering trials have already proved domestic energy savings of up to 10pc, just by making people more aware of the energy they consume.

Significant savings

Mingay says many green projects can win approval because they offer a quick return on investment. “In some cases it’s two years and possibly even one. It’s tried and trusted technology and process change. It’s not risky stuff and you’re going to get your money back.”

Quantifying savings from a green IT project is like trying to eat soup with a fork, because no two organisations are alike and their energy consumption profile will be different. There are some guideline figures, however: IBM estimates that every dollar of reduced energy costs can have a six to eight times return in operational savings. Earlier this year Dell assessed different Irish customer types using independent third party measurement tools. It found that a large public organisation with around 550 servers would save 1,143 metric tonnes of carbon emissions per year if it virtualised the servers and consolidated them down to 30 physical boxes. Consequently that organisation’s ene-rgy costs would fall by 75pc.

A medium-sized private firm with 72 servers would save 250 metric tonnes of carbon emissions per year by virtualising its systems onto 10 actual devices – cutting its energy costs by 73pc, according to Dell. Even a smaller firm reducing its servers from 21 to three would save 72 metric tonnes of emissions per year, lowering its energy bill by 66pc in the process.

IT’s impact

Given the environment’s importance as an issue, IT vendors have not been slow to talk up their green credentials. While some of this is undoubtedly marketing-driven, some real progress has been made. As far as the CIO is concerned, that means many of the building blocks are in place to begin implementing an organisation-wide green strategy rather than just tackling the problem piecemeal. In most of the key technology functions, from the server room to the desktop, the network and the printing devices, there are several steps a CIO can take to start delivering IT in a more energy-efficient way.

“About seven out of 10 clients I speak to are very aware of environmental issues. They want to do something to minimise the impact of their IT on the environment,” says Jason O’Conaill, principal of Eircom’s data centre services corporate markets division. “Anything to do with green IT is very much down to efficiency and saving money. What we encourage when we speak to clients is to watch out for idle servers and to power them down if they’re not doing anything. A lot of the green lights flashing in data centres are servers that are actually doing very little.”

It’s estimated that 5–10pc of power in any data centre is consumed by equipment not being used. Many companies’ failure to manage their IT assets correc-tly leads to this situation, states Mingay. A spot of good housekeeping can identify these systems so they can be powered down. “If you look at most organisations, the big issue is the data centre. There’s a whole bunch of things you can do in the data centre that won’t involve large capital outlay. You can change the layout – put a physical barrier between hot and cold aisles and the return on investment from doing that is typically months,” he says.

As it comes time for equipment to be replaced, it’s better to swap them with newer systems that consume energy more efficiently, he adds. Sweating older servers beyond their expected working life is a false economy because they devour more power and therefore cost more to run.

Consolidation projects, such as combining three servers into one, can reduce the physical footprint of IT and bring a reduction in power requirements because there are fewer servers. O’Conaill reports these initiatives are becoming more popular lately and he claims that one server with a heavier workload than several individual machines will still run more efficiently than the infrastructure it replaces. “We find they don’t tend to consume the equivalent energy of spinning more disks faster – we find that whether a server has one, three or four applications on it, it doesn’t tend to consume more energy.”

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Measuring up

Key to any green IT initiative is having baseline figures to measure against, says Mingay. “CIOs should absolutely be measuring the power consumption of their IT infrastructure. The data centre is relatively simple thing to measure – they should know how many elements in the data centre are consuming power. You need to measure it so you can manage it.”

Mingay acknowledges this is not always so straightforward. “The problem you have with energy efficie-ncy in IT is, the measure of anything is the value of output divided by the amount of input, but with IT, how do you measure the output?” he asks. “The best thing a CIO can do is take a typical workload they can expect from a server, put a meter on it and measure it.”

There are benchmarks like the Standard Performance Evaluation Corporation (SPEC) power standard for assessing a server’s power consumption, but Mingay warns against trusting benchmarks too closely, as vendors often optimise their equipment for the test. In other words, there’s likely to be a gap between a company’s real-world experience of server use and the equivalent system tested in a lab environment.

Efficient outsourcing

The frequently made economy-of-scale argument for companies to outsource to third-party data centres in favour of maintaining their own infrastructure applies in the context of a green IT strategy, says O’Conaill. “There’s a big opportunity for companies to take a fresh look at their architecture. Instead of having an inefficient in-house computer room, there’s now an opportunity to look at return on investment. If you’re a medium-sized company and you own your own ser-ver room, it’s very difficult to see where the return is in putting in extra air conditioning,” he reasons.

Moreover, data-centre operators like Eircom buy electricity in large quantity so they tend to get better value from the provider. That doesn’t mean a data-centre company is happy for equipment to soak up energy unnecessarily. “We’re not incentivised to have loads and loads of racks – we don’t want to have a customer taking up 10 racks when they can take up two,” says O’Conaill. Eircom is also doing more to source its power sustainably. “We’re carrying more wind and renewable energy mix into our data centre,” he says.

In addition, customers receive a monthly report into their energy consumption, measured in KW/h. “If you show a company how much its IT costs in terms of energy, it tends to be willing to be more efficient,” says O’Conaill. Another minor money-saving point for CIOs or IT staff is not to drive to the data centre to check on the equipment, he advises. “Avail of the ‘hands and eyes’ services in the data centre. Visit the facility as little as possible – it’s not a place to hang out.”

Networking works

The same consolidation trend that is driving green strategies in the data centre is also evident at the network infrastructure level too, according to John McCabe, managing director of Damovo in Ireland. “Organisations can make fundamental changes to the physical network itself, making it a two-layer model rather than the traditional three-layer approach,” he says.

“The big saving opportunity is in virtualisation – there are fewer boxes, they’re smarter, they can be powered on and off automatically. If you opt for a two-layer design, there are fewer boxes, therefore fewer need to be manufactured and there is less power and cooling required,” adds McCabe. “When you start looking at the savings you can make in terms of power consumption, there’s a much quicker return on investment. There is an opportunity to start looking at this. It’s going to cost you more to keep running an old leg-acy network than to put in something new that costs less to run and breaks down less. You have to consider the cost of your network downtime.”

What’s more, many old networks won’t support unified communications, which is also being heavily tou-ted as a key plank in a green IT strategy. A study by Mitel found that a 5pc reduction in travel in a 1,000-person company led to annual savings of around US$36,000. McCabe thinks these percentages underestimate the potential savings. Damovo implemented unified communications and saved “huge amounts of money,” with payback within four months of investing in the technology. That money was saved on travel expenses alone, McCabe says.

Savings in travel costs have an obvious environmental benefit, but there are enough others to justify making the switch to unified communications, says Richard Moore, business manager of Microsoft Ireland’s information worker division. “The green angle underpins it, but giving people the flexibility to work anywhere lets them get more done in the working day, so while it’s green there’s an efficiency angle there,” he contends. “Some organisations we talk to say it’s all about environmental awareness rather than economic savings, but the relative weighting is organisation-dependent.”

Paper money

Print is being talked about lately as the forgotten pillar of many organisations – a vacuum that that can make anything up to 3pc of a company’s turnover disappear. The fact that the output is produced on paper, and the potential for cost cutting, makes it well worth including in any green strategy.

Some basic changes can produce a significant return, according to Chas Moloney, sales and marketing director with Ricoh UK and Ireland. “It can be as simple as forcing everybody to print double sided, or duplexing, or even two-up, which means printing two pages on a single sheet of A4 and then repeating the process on the other side of the page. This reduces your running costs by a factor of four to one,” he says.

On the issue of whether to replace old systems in favour of newer, more environmentally friendly models, Moloney draws an analogy with light bulbs: the more energy-efficient ones are more expensive than standard ones but they ultimately bring a cost saving down the line.

Other options open to CIOs include enabling a ‘print to mailbox or hold folder’ feature. “This means the job is not printed until you go to the printer and authorise it. If it’s not printed within a certain period of time, it’s removed from the queue. You can take things a stage further and track costs using software. You can put timers on the device so if a document isn’t printed within one hour, or right up to seven days, it’s deleted from the printer’s memory,” says Moloney.

When it comes to print, buying more green will actually reduce your costs, he contends. “One of the biggest impacts of reducing your green footprint is choosing your supplier. You can buy cheap kit but the chances are the manufacturer has used standard parts and has not thought about recovering the hardware later, so it will end up on the scrapheap. You need to look at the environmental credentials of the supplier you’re dealing with,” he says. “Fifty per cent of the footprint of a printer strategy is in the research and development of the product rather than recovery and dis-posal. The customer has no influence over 50pc of the life of the model.”

Small changes can be big

Moloney advises a blended solution – that is, a mix of remanufactured and new machines – and says this option is gaining a lot of interest in government and large organisations. “Everyone can do it. Change your users’ behaviour, look at blending a mix of remanufactured and new machines, and look at your supplier base. Generally, the manufacturers that have a strong green focus will have equipment that needs less energy to run and they will take the machine back for reuse later.”

Even if organisations lack the budget to allocate to major change projects, small wins in critical areas can be the start of a bigger strategy if managed correctly and consistently. CIOs who can prove tangible returns should be able to gain approval for further projects, widening the scope of the green strategy to be better prepared for external factors like carbon-emission legislation and, of course, the environment itself. The clock is ticking.

By Gordon Smith