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Thriving in the face of adversity

01 Aug 2010

Although many industries are still struggling in the wake of the global financial crisis, green IT remains a top priority for CIOs in spite of the tough economic climate. A 2010 Gartner report (Green IT Initiatives Are Moving Beyond Power and Cooling Efficiencies) uses electronicpolling data gathered at Gartner’s 2009 Data Centre Conference (DCC) to highlight the trends emerging in green IT. The report identified that interest in green IT is continuing to grow and, with more emphasis being placed on green IT initiatives, CIOs planning towards 2011 need to understand how their implementations compare to other green initiatives.Gartner found that green IT initiatives that appear easy to implement, such as greenprinting practices and the safe disposal of e-waste, are being conducted by a mere 40% or fewer of the respondents. The report recommended that green IT initiatives be expanded beyond just power and cooling efficiency, especially in the easy-to-implement areas, such as recycling, green-printing practices, safe disposal of e-waste, and greenworkstation practices.With growing interest, the number of opportunities for resellers in this field also increases. Andrew Milroy, Frost & Sullivan’s Industry Director, ICT, states that resellers should look at setting up videoconferencing, integrating existing IT with the cloud, building management systems, and implementing virtualisation and smart grid technologies, as areas that present key opportunities. “Utilities are now looking at smart grids, big retailers are looking at greener buildings, and companies with big data centres, such as banks, are looking at reducing Greenhouse Gas (GHG) emissions from those centres,” Milroy says.Climate change and the Emissions Trading Scheme (ETS)According to the Gartner report Dataquest Insight: Strategic Options for Positioning Green IT in 2010, many vendors have been unsure how to effectively position and market their products, solutions and services as green or environmentally sustainable. This has meant the IT industry’s approach to the relationship between ICT and climate change has been unclear and inconsistent.Gartner states that the ICT community currently contributes around two percent of GHG and carbon footprint. This environmental impact could be signifi cantly reduced, but the industry will require new innovative technology with higher throughput to match future networking and services requirements. The report goes on to say: “While this will lead to the buildout of infrastructure, the new deployments will use more green benchmarks, such as energy efficiency and carbon footprint.”Gartner suggests that green IT has already become one of the keys to where vendors and service providers position their products and services in the market. “Green IT investments are currently being touted as offering cost savings and enabling cost avoidance.Gartner believes that the benefits of green IT extend even further, and that business growth occurs through product and technology solutions targeting energy efficiency, materials or the management of product life cycles.” Accountability, sustainability and transparency need to be brought in to the business proposition to help vendors overcome the accusation that their actions are simply ‘greenwashing’.The Emissions Trading Scheme (ETS) also needs to be considered. A transition period will be operating from July 1st 2010 until December 31st 2012. During this period the price of New Zealand Emissions Units (NZUs) will be capped at $NZ25. Also, one unit will only need to be surrendered for every two tonnes of carbon dioxide equivalent emissions, effectively reducing the cost of emissions to $NZ12.50 per tonne. Milroy of Frost & Sullivan believes that by pricing the cost of carbon, companies will need to focus on measuring GHG emissions and implementing more effi cient technologies based on the assumption that the cost of pollution will increase in price.SustainabilityThe last time The Channel delved in to green IT, energy efficiency was a hot topic. The focus in 2010, however, appears to be on sustainability. The article Greening IT, by Frost & Sullivan’s Milroy, backs this up. Milroy says while IT has traditionally been perceived to be a clean industry, it has been late to focus on sustainability. However, he goes on to say that IT’s carbon footprint and ways of reducing it are now becoming more of a focus.He states: “Over time, Frost & Sullivan expects sustainability to be embedded within every IT process and purchase. It will become a much more significant choice determinant for products and services over the coming years along with other determinants like price, performance and references. It will be assumed that sustainable IT offers cost benefits. This will lead organisations to seek accurate ways of determining payback periods, net present values and returns on investment.”Advances in technology are also contributing to the move towards sustainable IT. Milroy explains that the increasing number of services provided over the internet enables service dematerialisation, such as the elimination of CDs. He believes the move to cloud computing combined with server virtualisation will create “greater effi ciencies and economies of scale in the data centre”.Gartner’s report, Dataquest Insight: Strategic Options for Positioning Green IT in 2010, mentioned earlier, states Gartner believes environmental sustainability offers long-term strategic benefi ts in regards to total cost of ownership, branding, innovative potential and market positioning. Sustainable city, ‘smart grid’, ‘smart building’ and intelligent transport are all examples of projects that offer vast potential to create ecosystems that can accommodate various pilots and implantation stages. Gartner expects that by 2012, the level of environmental sustainability in brand, offerings and environmental life cycle implementations will become one of the most significant differentiating factors.The key to success A reoccurring theme contributing to success in this market is differentiation, which raises the question: how can you stand out from your competitors? Gartner’s Dataquest report (see above) highlighted how tying together a tactical green product, solutions and services strategy will have a dramatic result in terms of competitive positioning with customers. The report goes on to say that tactical or defensive strategies must be embedded “within a larger, offensive plan, or else efforts will remain merely reactive behaviour to market trends”. Gartner’s most prevalent environmental projects or themes, as shown in the table below, illustrate more opportunities for differentiation. The report advises that “each theme must be positioned and its business opportunities benchmarked against the particular macroeconomic challenges the vendor faces”.Gartner gives the example of the acceleration of the broadband network topology buildout in the US, which has contributed to an 11% reduction in oil imports due to a more efficient work environment. This enabled teleworking and telecommuting, while also exploiting increased efficiency in communication tools.“Vendors that position their products, solutions and services in context within the larger of our themes and in terms of end-to-end features can make a greater impact, which helps increase awareness and gives greater branding opportunity. The modality of the solutions may differ by region, but placing the offering within a strategic context in an important offensive strategy that can reduce barriers to market entry,” according to Gartner.Dare to be differentGartner states: “While being an innovator requires more capital expenditure for R&D and market development, the rewards include greater mind share and a stronger branding impact over time.” Industry innovators are going to be the key players in this market, but don’t forget to segment your customers’ requirements so you can address their needs more comprehensively.

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