CASE STUDY No.7
March 28, 2007 — CIO — The report on global warming issued in February by the United Nations’ Intergovernmental Panel on Climate Change concludes unequivocally that our planet is getting hotter. And, as we approach Earth Day April 22, the evidence that it’s all our fault is stronger than ever.
As we go about our busy lives, running our ever more powerful, ever more ubiquitous computers, we are effectively turning up the planet’s thermostat. Gartner estimates that carbon dioxide emissions related to the operation of servers and PCs account for 0.75 percent of the annual global total, and that’s before factoring in emissions generated by cooling the boxes. Add to that the emissions generated by telecommunications networks, and IT’s contribution to the atmosphere’s greenhouse gas load is “probably in excess of 2 percent,” says Simon Mingay, research vice president with Gartner, adding that that’s “a big number for what is essentially a single device.” In fact, emissions tied to that device, the computer, are comparable to the level of greenhouse gasses being produced by all the world’s airplanes as they crisscross the skies above us. Now what are CIOs doing about that?
Green Goes Mainstream
Companies today face a panoply of environmental issues, from how much electricity they consume (produced by power plants that run on fossil fuels) to how they deal with toxic wastes. But in most enterprises the CIO has played a minimal role in decisions that affect the environment. For the most part, no one has asked them to do anything more. But sooner rather than later, someone—your boss, a big customer or a government agency—is going to want to know what you’re doing to comply with, support or advance your company’s efforts to become more environmentally responsible. This demand will not stem merely from an altruistic desire to behave responsibly (although that’s a fine reason); rather, corporate sustainability (as being cognizant of your impact on the planet is now called) has become a cost of doing business. Global regulations that put limits on toxic chemicals and emissions now reach from the manufacturing floor into the data center.
And having an understanding of and an appreciation for one’s effect on the environment increasingly is proving to be good for the bottom line. A recent report concluded that there’s a direct correlation between good environmental practices and sound overall management. The report’s authors—Marc Orlitzky, a lecturer with the Australian Graduate School of Management, and Frank L. Schmidt and Sara L. Rynes, both professors with the University of Iowa—say good corporate citizenship can help companies build the skills and infrastructure they need to cope in turbulent times, as well as improve efficiency.
Daniel Esty, director of the Center of Business and Environment at Yale University, points to a multitude of examples in which employing IT that attends to the planet helps companies cut costs or raise revenue. “One of the key tools that companies have used to develop an eco-advantage is good data collection,” says Esty, coauthor, with Andrew Winston, of Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value and Build Competitive Advantage. “Having a strong set of metrics and indicators allows companies to manage inputs better, reduce waste and achieve higher productivity,” Esty maintains.
The Cost-Benefit Analysis
Charity begins at home, and the CIO’s responsibilities start with the IT department. According to Gartner, the pervasiveness of computing equipment in most companies makes the IT department a major source of negative environmental impact. Mitigating that impact will have its cost. All your hardware contains toxic materials that in many places must be recycled. The European Union recently toughened regulations for disposing of old computers; other nations and many U.S. states also have rules for recycling electronics. Meanwhile, new equipment, designed to be energy efficient and comply with regulations for use of toxic substances, may become more expensive if vendors decide to charge a premium for green products.
But the good news is that every company with a data center has a vein of green waiting to be mined. “Any organization that wants to improve its environmental footprint is going to look at power consumption,” notes Mingay. “If the company is a professional services, banking or insurance kind of business, IT will probably be the biggest consumer of power by a long way.”
Fixing the Data Center
As Senior Editor Stephanie Overby writes in “Clean, Green Machines,” data centers consume between 1.5 percent and 3 percent of all the power generated annually in the United States—at the high end, that’s equivalent to the electricity needed to power the state of Michigan for one year. But most IT departments don’t have a good grasp of their electricity bills because they don’t control the facilities their data centers occupy. One company, VistaPrint, where the IT department does manage its data center facilities, discovered that its electric bill was projected to skyrocket if the company, which sells custom printed products online, grew as predicted.
When Cable & Wireless, which hosts one of VistaPrint’s data centers, threatened to charge the company extra to cover the cooling costs for its blade servers, then-CIO Wendy Cebula (now the company’s COO) asked her IT operations director to improve energy efficiency. The project eventually led to the construction of a second, more energy-conscious data center in Canada, where hydropower provides a renewable, lower-emissions source of electricity. The company now projects savings of 70 percent on its electricity bills. It will also save $450,000 annually by replacing its blade servers with virtual machines that use more server capacity and consume less power. Within a year, VistaPrint will be reducing the emissions from its data centers to a degree equivalent to taking more than 100 cars off the road for a year.
VistaPrint has benefited in part from the increasingly heated competition among chip makers and server vendors to out-green each other. But which server provides the greatest power consumption savings for the buck depends on how you plan to use it. Existing benchmarks that measure application performance or CPU utilization aren’t much help because they don’t measure power consumption, notes Brent Kirby, a product manager with AMD. Groups including the Standard Performance Evaluation Corp. and the U.S. Environmental Protection Agency are researching a new generation of benchmarks that address server electricity usage, while an effort among computer manufacturers known as The Green Grid aims to identify best practices for data center power management.
Meanwhile, using more efficient cooling systems, or simply sealing holes in your data center’s floor, can reduce energy consumption and, ultimately, greenhouse gas emissions. Your company wins by lowering its energy costs, and the planet wins too.
The Green Advantage
IT’s contribution to corporate sustainability doesn’t stop at the data center door. New and nticipated environmental regulations are prompting companies to reexamine everything from their business processes to their product lines.
As Associate Staff Writer Katherine Walsh writes in “Can IT Make Your Company Green?”, companies are beginning to pay more attention not only to what goes into their products but how those products are made. And whether they’re tracking systems for monitoring plant emissions, using databases to analyze material use or implementing operational controls, they need IT to do it. These systems can pay dividends beyond keeping companies out of legal trouble, or having their noncompliant products barred from global markets. At Dow Chemical, CIO David Kepler says technology investments that monitor energy use have saved Dow billions.
Other systems are expected to generate top-line revenue growth by helping companies make better products. Both furniture maker Herman Miller and Timberland, which makes outdoor apparel, cater to environmentally conscious customers (and satisfy regulators) by developing products using recycled materials and eliminating toxics from their production processes. IT integrates the databases that track the use of materials with those that manage the production processes in order to optimize the efficiencies the companies reap from these green initiatives.
You have an advantage if your company has already made environmentally sound practices a priority. In Chicago, the law firm Kirkland & Ellis is constructing a green building, with design parameters that include lower power consumption and more efficient air conditioning. (To see the specs for the building, read “Designed for IT,”
“There are regulations, there are savings to the firm and there’s just being a good citizen,” says Kirkland & Ellis CIO Steve Novak. “If there’s any way you can reduce consumption, it’s good for all.”
If your company has not embraced its environmental responsibilities, it’s only a matter of time efore it will be forced to or suffer the consequences. “Green issues are going to be climbing up the consumer and investor and media agenda,” notes Gartner’s Mingay. “At some point in time, this increased focus is going to affect the enterprise.” The question CIOs have to answer is, Will you be ready?
Syed Raza Thu, 2007-05-03 14:01
I am wondering if all these efforts make any difference in the global warming. As the use of IT and Internet grows the demand for more and more servers and other equipments grows every day. But the point is does going green make a difference or not? Bush has removed us from already signed Kyoto treaty, which has some set goals to get back to a certin CO2 level. Now without any set goal is it going to make any difference? Remember US is the highest source of CO2 emission.
As the demand always grows I think all this will be futile unless we have some International binding treaty. It is like a drop in the ocean - meaningless.
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Thursday, July 12, 2007
CASE STUDY No.7