CIO

It Is Easy Being Green

In last month’s issue we looked at why CIOs should be at the fore of an organization’s sustainability efforts

When it comes to cleaning up their act, many CIOs are recognizing data centres as among the lowest hanging fruit. IDC estimates companies spent $US26.1 billion to power and cool servers worldwide in 2005, with a monstrous $14 billion of that being spent in the US alone. In fact, data centres account for between 1.5 and 3 percent of all electricity consumed in the US. Should current trends persist, the research organization projects, that bill will soar to $US50 billion by the end of the decade.

The deployment of high-density servers is making the situation far, far worse than ever before.

If CIOs adopt a virtualization strategy, there will be fewer physical servers, which means less space in the data centre, and less electricity and cooling

"The power needed for a rack of high-density server blades can be between 10 and 15 times higher than the power needed for a traditional server environment," says Gartner research vice president Rakesh Kumar. "Most legacy data centres built 15 to 20 years ago cannot meet this demand. At the same time, a similar amount of additional power will be needed to remove the huge quantity of heat generated by these new machines. If the machines are not cooled sufficiently, they will shut down, with potentially damaging consequences for business service levels and IT governance."

Factor in the rising cost of electricity and Gartner says all this gives businesses a double incentive to cut carbon emissions.

Leading UK fixed-line telecommunications provider BT currently consumes an astonishingly high 0.7 percent of the UK's total annual electricity output, according to a case study by IDC. BT knows that rationalizing its large installed base of systems and infrastructure that includes most of the major switch, router, server and storage vendors' equipment and multiple applications that address customer needs and different parts of the business is essential to reducing its carbon emissions, IDC says.

BT is succeeding. The company slashed carbon emissions by 60 percent between 1996 and 2006 and aims to extend that figure to 80 percent by 2016.

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As BT's global head of data centres explained to IDC, a key plank of this strategy is auditing the power consumption of its data centres. BT's three-stage process for reducing emissions includes: rationalization, placing IT activities in the wider context of BT's operations; standardization, to reduce the complexity of its operations; and convergence. "BT, through its 21st century network transformation program, aims to lead the convergence between telecommunications and IT from voice services on PSTN on to data services on IP networks. As well as offering lower cost and a greater range of services, the move to IP networks powers BT's ambitions as an IT service provider to both businesses and consumers," IDC says.

However, even far simpler actions can have dramatic results. Florida-based Seminole Community College expects to save between $US45,000 and $US65,000 a year in power costs by automatically shutting down PCs every night and rebooting them in the morning. As an added bonus, the software from Persystent Technologies that achieves this automatically performs policy updates on PCs after lab hours, preventing the usual productivity disruptions and freeing up the IT budget to purchase additional software licences. The software takes advantage of the Wake-On LAN features of the NICs and PCs. Once it is set in the server, the software issues the commands for shutting down or powering up without any human intervention.

"Our college had an external energy savings evaluation performed last year and one of the recommendations from the consultants resulted in our implementation of the power management of the computers campus-wide," says CIO Dick Hamman.

The Children's Hospital Central California, one of the 10 largest paediatric hospitals in the US, faced increasing costs managing its data centre — cooling, power and space were all critical factors that needed to be brought under control. The hospital has initiated a server consolidation project that leverages virtualization to bring costs in line and reduce server sprawl. Working with Novell partner Novacoast, the hospital has completed its pilot of Novell ZENworks Orchestrator and plans to move forward in production deployment soon.

Virtualization — server consolidation and containment — can help by allowing companies to place multiple workloads on the same server. If CIOs adopt a virtualization strategy, there will be fewer physical servers, which means less space in the data centre, and less electricity and cooling.

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CyberTrails, an IT consulting and data centre operator in Phoenix, has done three things that help reduce energy consumption and improve cooling efficiencies in the data centre. First, it replaced traditional floor-based cooling with an in-row water-based chiller system, combating heat sources closer to the source. It also installed modular uninterruptible power supplies (UPSs), hardware that helped reduce energy costs by more than 20 percent per kilowatt hour; the old system was operating at just 60 percent energy efficiency. And it transitioned to "virtual machines" instead of continuing to add servers.

Kris Domich, director of data centre solutions at Dimension Data, a $3.1 billion IT services and solutions provider, says another way to limit power use is to keep people out of the data centre. Not only are people effectively mini heaters, they also need light. Lighting and other ancillary environmentals can account for 10 to 12 percent of total power, Domich says. Use of motion switches that activate lights only when needed can help.

Enabling the "green" control within servers also makes a difference. This ensures that servers are throttling the amount of power they consume based on actual load. These controls can step down the frequency of the servers during low load, which will translate to less power consumption.

You can also place remote sensing equipment in each logical cooling zone. Domich says studies have shown that 20 percent or more of power consumed comes from the HVAC systems (varying amounts based on cooling technology). By tying the sensing equipment into actual server load or watts generated, cooling systems can react intelligently and specifically to a given situation. This is in contrast to the "maximum cooling at all times" principle followed in many data centres.

"Consolidation is another positive step towards being more green. Idle capacity comes at the expense of a power overhead just to 'keep the lights on'. Reducing this capacity will reduce power consumption," Domich says. "The growing trend to locate new data centres near power generation facilities is a great thing. This greatly reduces transmission distances and wasted watts during the transmission. Power plants are statistically safe enough to locate a data centre nearby."

And he advises companies to make use of the heat generated by large data centres. This heat can be channelled to other parts of the building to produce a benefit, he says.

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Other Measures

Experts say there are a host of other measures CIOs can encourage to help reduce their organization's global footprint. An obvious one is to encourage telecommunicating. A number of vendors are promoting solutions for virtual events and trade shows as a convenient and cost-effective substitute for air travel.

For instance, Unisfair claims its virtual events have the look and feel of a physical event — including a grand entranceway, a conference hall for keynotes and multiple conference sessions, an exhibition hall with partner and vendor booths, a resource centre and professional networking lounges. Real-time interactivity is fostered among attendees, presenters, panellists, sponsors and exhibitors through rich multimedia technologies including text, audio, video and voice.

Vodafone executives have taken 13,500 fewer flights a year since adopting products from Tandberg and making the commitment to teleconferencing as a business tool.

A study sponsored by the World Wildlife Fund and the European Telecommunications Network Operators Association (ETNO) recently demonstrated replacing 20 percent of business travel in the European Union (EU) annually would keep 22.35 million tons of CO2 out of the atmosphere. There may even eventually be a greener solution when business travel is unavoidable. In the US, Silverjet, an all-business-class airline, has declared itself the world's first 100 percent carbon-neutral airline.

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Other CIOs are being more cautious about the products they buy, looking to eliminate harmful substances in products, and seeking cleaner, greener ways of disposing of old technology.

In the US, Kaiser Permanente was the first company to make it a condition of doing business that vendors adhere to a stringent environmental policy that included no land filling of electronics scrap, no exporting of electronic scrap and no prison labour in production or disposal.

"There are only a few technologies available in the world that are able to break down electronics to component materials in a way which poses minimal emissions as a part of the process," says full cycle asset recovery and management company Redemtech president Robert Houghton. "There are a number of 'recycling alternatives' that are not very clean and green at all. The most common in the world is manual dismantling and recycling conducted in developing countries by very cheap labour under very hazardous conditions, and that still represents the majority of recycling that occurs for the material that is originating in the developed countries.

"That has been prohibited by the Basel Convention of the United Nations but is still going on in very large scale. Landfill is still permissible in some developed countries and that allows lead-bearing electronic waste to go into the landfill and of course lead leachate out of landfills is quite a problem. Incineration is still a very common means for recycling — incineration does not pass clean air laws in most developed countries," Houghton says.

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"So there are only really a few technologies and very few companies employing technologies that are clean and result in as zero emissions as possible, so the infrastructure for responsible recycling is infinitely smaller than demand for it. If you are a company that wants to ensure that your material is being properly recycled and literally reduced back to raw material state that is suitable for feedstock into another manufacturing process, it becomes necessary to very carefully vet the recycling partners that you choose, the recycling vendors that you choose, and in most cases it's safe to assume that unless you can see the material being reduced down to the raw components — the plastics, the steels and so on — and then are able to ensure that that material is actually being sold at reasonable commodity prices back into manufacturing, then you can assume that something less savoury is happening to your electronics.

"The reality is that probably 98 percent of the electronics that is nominally recycled in the world at this point is being done either by very dirty manual methods or something more industrialized but still not very clean."

New Processes

Finally, CIOs keen to promote environmentally sound policies should be on the lookout for improvements to old processes. As digital printing becomes increasingly adopted in companies, IT departments are incorporating the technology into the overall IT infrastructure. The environmentally aware CIO can encourage that transition and also suggest updating existing offset presses with new chemical-free plate-making and offset printing technologies.

US-based GreenPrint Technologies, in another first, has created software that eliminates all those wasted pages that come off the printer with just a URL or banner ad at the bottom. It says several Fortune 500 companies are currently doing pilot programs in the hopes of saving millions of dollars a year in reduced paper and ink usage and saving thousands of trees while reducing their carbon footprint and emissions.

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SIDEBAR: How to Get Funding for Green IT

Green may be fashionable, but it's also a hard sell — unless you know this magic method to calculate ROI

By Jim Turner

Energy conservation is one of the most overlooked ways a company can boost its bottom line without adding staff, space or operating hours. But you'll need to do a great job of selling for your "green" projects to survive the budget review process. Too often, conservation projects are viewed as nice and optional things to do, rather than as serious savings opportunities. That will change in a heartbeat once you articulate the financial benefits.

One reason the value of conservation projects tends to be minimized is because of the way they are presented to management. Typically, such projects are sold on simple payback, in which the capital cost is divided by the (undiscounted) annual energy savings, resulting in a payback period of years. One problem with this approach is that many managers insist on a payback of less than three years to green-light capital projects not directly related to production. This criterion greatly limits the range of conservation opportunities available. With this method, for instance, an air-conditioning system upgrade that costs $20,000 and will save $5000 per year will have a simple payback of four years. That's not a financial measurement that's going to wow them in the boardroom.

A more sophisticated analysis might look at comparative life- cycle costs to develop a net present value (NPV). The NPV shows the positive (or negative) cost of a long-term project in today's dollars, and is a good way to compare two projects. In this case, the NPV of the green project then would be compared to maintaining the status quo.

The good news about the NPV approach is that it does a better job of showing the value of long-lasting conservation upgrades. The downside is that it requires quite a bit more economic savvy to develop. Surprisingly, I also have found it requires more economic savvy to grasp and often isn't well understood by management. (In fact, I once analyzed two multimillion-dollar capital projects and discovered one had a NPV of $750,000 more than the other, only to be told by management that "only" a $750,000 difference made the two projects "basically equal"!)

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To get around the shortcomings of simple payback and comparative NPV presentations, I have developed a third way of positioning conservation projects that has met with considerable success. For lack of a better name, we can call it the "argument of avoided production", because it evaluates conservation projects relative to revenue. Here's how it works:

Let's assume I could reduce my annual utility costs by $100,000 after spending $300,000 on energy-efficient capital upgrades (lighting upgrades, a green data centre, and so forth) This project delivers a three-year simple payback (three years is typical for conservation projects). Do I do the work?

Well, many companies would dismiss a three-year payback out of hand (or would look very hard at competing capital requests first). But consider the project and savings in a different light. A typical commercial enterprise might recognize a profit margin of 10 percent. Saving $100,000 in energy costs means that my profitability can be maintained with $1,000,000 less in annual revenue. Or, more desirably, my revenue can be maintained and my margin increased.

For the example above, the reasoning for our capital request now becomes rather simple: We don't have to do this $300,000 project, but we need to sell $1,000,000 worth of widgets every year to offset the "missed" savings we would get if we did the $300,000 project. In this light, a three-year payback doesn't look so bad.

Also observe that when utility rates increase — as they inevitably do — this method really shines. It is easy to see how expected cost increases would need to be translated into production or revenue increases just to stay financially even. Using the example above, if my operating costs rise by $100,000 strictly because of rate increases, I must generate another $1,000,000 in revenue to break even. Can you increase revenue at will? That makes the conservation alternative strategically very attractive.

Finally, notice that for facilities running at 100 percent capacity, conservation may be the only practical way to offset utility rate increases. Once you cannot physically produce more, either you conserve, you take the hit on the bottom line or you are forced to invest substantial capital to let you produce more. Particularly here, conservation can be a big winner.

Turner is the utility manager for Brigham and Women's Hospital in Boston