Lessons Learned from IBM's Big Green Initiative
IBM will spend billions of dollars on its "Big Green" initiative over the next several years. David Metcalfe, Director of Vendantix, takes a look at the initiative, and offers six lessons that IT managers and CIOs can learn from it.
How strong is the Green IT wind blowing? In the software industry, the Green IT wind is blowing but not very strongly. Much of the industry still stands on the sidelines of climate change innovation. From industry leaders like Microsoft and SAP down to niche apps vendors, software firms are just now defining their strategies for environmental sustainability, Green IT and climate change. What can software professionals like you learn from your hardware cousins? IBM is a good place to start.
Back in May 2007, Big Blue announced that it would "redirect" spending of $1 billion a year into its Big Green initiative. There were two goals. Firstly, dramatically reduce energy consumption in data centres -- by as much as 42% -- using IBM's five-step IT energy efficiency methodology. Secondly, ensure IBM's energy bills stayed flat despite an anticipated doubling of in-house computing power by 2010. But IBM's Big Green initiative launched into a growing backlash against "greenwash" and unproven demand for energy efficient kit from CIOs. What has become of Big Green?
One Year On Big Green Got Much Bigger
After 12 months of customer dialogue IBM's Big Green initiative expanded from a focus on hardware energy efficiency in the data centre to a consulting-lead offering for corporate energy efficiency and carbon management. This reflected in particular the growing obsession of IT in Europe with carbon emissions due to the European Union's Emissions Trading Scheme as opposed to the US focus on energy costs. The new mission for Big Green is to help reduce the 98% of emissions not generated by IT as well as the 2% generated directly by IT. Through its customer outreach IBM learnt six lessons about the commercialization of Green IT:
1. Exploit IT's information management role.
IBM's handful of Big Green customer engagements, such as its work for the UK Government's 95,000 employee Department For Energy, Food & Rural Affairs, made one thing clear: firms don't have the detailed electricity consumption data they need to implement energy efficiency initiatives. What they have is an energy bill for a facility. IBM has beefed up the power monitoring and management capabilities of Tivoli and struck partnerships with firms like Johnson Controls, Matrikon OPC, Siemens and Synapsense. Tivoli Green Management can now monitor, measure and manage IBM systems, non-IBM IT hardware, data centre infrastructure like UPS and building systems such as HVAC, lighting and security systems.
2. Hitch Green IT to data centre refurbishment projects.
Energy savings alone don't constitute a business case to overhaul an existing data centre, undertake a refurbishment project or build a new Green Data Centre. IBM seeks to incorporate IT energy efficiency best practices into existing business plans for data centre improvements. Pure energy efficiency projects don't get past CIOs because the CIOs don't have the energy cost data to calculate the ROI. The VP of Facilities has the energy bills but lacks the detail to run an energy efficiency audit. Enter the consultants.
3. Tackle corporate energy efficiency and emissions.
Big Green started with a vision from the hardware and software folks to slash energy consumption in the data centre. Once IBM's Global Business Services consultants got hold of the idea, they transformed it into a Carbon Management Strategy encompassing employees, information, property, the supply chain, customers and products… not forgetting IT. For the consultants, a strategy discussion and corporate carbon diagnostic are the start point to stimulate demand. Not a cold sell on Green IT.
4. Differentiate offerings by industry and country.
IBM's push into the market for corporate climate change services has met with varying levels of success by industry and country. Europe, and in particular the UK, focuses on carbon emissions as much as energy costs due to mandatory emissions caps. Even firms in sectors without a mandatory cap like telcos and banks search for emissions cuts to enhance their reputations. The inability to get more power into urban data centres has driven demand for energy efficiency by banks, telcos and outsourcers.
5. Plan for slow customer adoption.
IBM is developing the market for IT energy efficiency and carbon management services. And its very much an early stage market today. There is no indication of a deluge of Big Green projects from the private sector. In IBM's view, the combination of high energy costs, brand management goals, tightening regulations and stakeholder pressure will drive the market. Look to government environmental agencies, large cities with green ambitions and firms with data centres facing power restrictions to adopt first. The second wave of adoption is likely to come from consumer-facing firms driven by industry leaders like Wal-Mart and Tesco.
6. Prepare for investment barriers to IT energy efficiency.
IBM has helped IT clients with quick fixes offering rapid payback such as adjusting data centre temperature and humidity to reduce energy consumption. But in the current economic environment, persuading firms to invest £100,000 to install variable speed fans with a 6-year payback is much tougher. With the low hanging fruit picked, IBM has found that there is an unwillingness to spend money on planting a new orchard. In particular, very few firms will invest the tens of millions required for a new build data centre that incorporates energy efficiency best practices.
Lessons from Big Green Benefit the Market
IBM's Big Green initiative side-stepped the IT greenwash debate and delivered valuable lessons for the rest of the technology industry. Above all it has clarified the crucial enabling role of energy and emissions information measurement, monitoring and management.
The primary barrier to the CIO investing in energy efficiency is that he or she rarely has the data on energy costs and possibly doesn't pay the bills. On the flip side, facilities directors and heads of realty pay the energy bills but have no understanding of what drives energy consumption. Faced with zero actionable information, Green IT engagements need to start with energy efficiency assessments and integrated monitoring of energy consumption across IT assets, data centre hardware and facilities services.
A recent Verdantix survey of 50 climate change leaders validates the need to integrate the information management capabilities of IT with the energy consuming features of facilities management. Fifty-two per cent of respondents consider that facilities management is "extremely" important for their climate change initiatives whereas just 16% view the IT department as being "extremely" important.
Software companies that have recently woken up to the market opportunities created by the corporate climate change agenda now have a context for product innovation and marketing: energy and emissions information management and monitoring for IT and facilities. The Green IT wind will start blowing more strongly in 2009.
To access the full report and data on this topic please visit the Verdantix website at www.verdantix.com.
Back in May 2007, Big Blue announced that it would "redirect" spending of $1 billion a year into its Big Green initiative. There were two goals. Firstly, dramatically reduce energy consumption in data centres -- by as much as 42% -- using IBM's five-step IT energy efficiency methodology. Secondly, ensure IBM's energy bills stayed flat despite an anticipated doubling of in-house computing power by 2010. But IBM's Big Green initiative launched into a growing backlash against "greenwash" and unproven demand for energy efficient kit from CIOs. What has become of Big Green?
One Year On Big Green Got Much Bigger
After 12 months of customer dialogue IBM's Big Green initiative expanded from a focus on hardware energy efficiency in the data centre to a consulting-lead offering for corporate energy efficiency and carbon management. This reflected in particular the growing obsession of IT in Europe with carbon emissions due to the European Union's Emissions Trading Scheme as opposed to the US focus on energy costs. The new mission for Big Green is to help reduce the 98% of emissions not generated by IT as well as the 2% generated directly by IT. Through its customer outreach IBM learnt six lessons about the commercialization of Green IT:
1. Exploit IT's information management role.
IBM's handful of Big Green customer engagements, such as its work for the UK Government's 95,000 employee Department For Energy, Food & Rural Affairs, made one thing clear: firms don't have the detailed electricity consumption data they need to implement energy efficiency initiatives. What they have is an energy bill for a facility. IBM has beefed up the power monitoring and management capabilities of Tivoli and struck partnerships with firms like Johnson Controls, Matrikon OPC, Siemens and Synapsense. Tivoli Green Management can now monitor, measure and manage IBM systems, non-IBM IT hardware, data centre infrastructure like UPS and building systems such as HVAC, lighting and security systems.
2. Hitch Green IT to data centre refurbishment projects.
Energy savings alone don't constitute a business case to overhaul an existing data centre, undertake a refurbishment project or build a new Green Data Centre. IBM seeks to incorporate IT energy efficiency best practices into existing business plans for data centre improvements. Pure energy efficiency projects don't get past CIOs because the CIOs don't have the energy cost data to calculate the ROI. The VP of Facilities has the energy bills but lacks the detail to run an energy efficiency audit. Enter the consultants.
3. Tackle corporate energy efficiency and emissions.
Big Green started with a vision from the hardware and software folks to slash energy consumption in the data centre. Once IBM's Global Business Services consultants got hold of the idea, they transformed it into a Carbon Management Strategy encompassing employees, information, property, the supply chain, customers and products… not forgetting IT. For the consultants, a strategy discussion and corporate carbon diagnostic are the start point to stimulate demand. Not a cold sell on Green IT.
4. Differentiate offerings by industry and country.
IBM's push into the market for corporate climate change services has met with varying levels of success by industry and country. Europe, and in particular the UK, focuses on carbon emissions as much as energy costs due to mandatory emissions caps. Even firms in sectors without a mandatory cap like telcos and banks search for emissions cuts to enhance their reputations. The inability to get more power into urban data centres has driven demand for energy efficiency by banks, telcos and outsourcers.
5. Plan for slow customer adoption.
IBM is developing the market for IT energy efficiency and carbon management services. And its very much an early stage market today. There is no indication of a deluge of Big Green projects from the private sector. In IBM's view, the combination of high energy costs, brand management goals, tightening regulations and stakeholder pressure will drive the market. Look to government environmental agencies, large cities with green ambitions and firms with data centres facing power restrictions to adopt first. The second wave of adoption is likely to come from consumer-facing firms driven by industry leaders like Wal-Mart and Tesco.
6. Prepare for investment barriers to IT energy efficiency.
IBM has helped IT clients with quick fixes offering rapid payback such as adjusting data centre temperature and humidity to reduce energy consumption. But in the current economic environment, persuading firms to invest £100,000 to install variable speed fans with a 6-year payback is much tougher. With the low hanging fruit picked, IBM has found that there is an unwillingness to spend money on planting a new orchard. In particular, very few firms will invest the tens of millions required for a new build data centre that incorporates energy efficiency best practices.
Lessons from Big Green Benefit the Market
IBM's Big Green initiative side-stepped the IT greenwash debate and delivered valuable lessons for the rest of the technology industry. Above all it has clarified the crucial enabling role of energy and emissions information measurement, monitoring and management.
The primary barrier to the CIO investing in energy efficiency is that he or she rarely has the data on energy costs and possibly doesn't pay the bills. On the flip side, facilities directors and heads of realty pay the energy bills but have no understanding of what drives energy consumption. Faced with zero actionable information, Green IT engagements need to start with energy efficiency assessments and integrated monitoring of energy consumption across IT assets, data centre hardware and facilities services.
A recent Verdantix survey of 50 climate change leaders validates the need to integrate the information management capabilities of IT with the energy consuming features of facilities management. Fifty-two per cent of respondents consider that facilities management is "extremely" important for their climate change initiatives whereas just 16% view the IT department as being "extremely" important.
Software companies that have recently woken up to the market opportunities created by the corporate climate change agenda now have a context for product innovation and marketing: energy and emissions information management and monitoring for IT and facilities. The Green IT wind will start blowing more strongly in 2009.
To access the full report and data on this topic please visit the Verdantix website at www.verdantix.com.
