COOL IS THE NEW GREEN
Eco-friendly IT may seem like a luxury, but governments don’t think so. Here are some tips on compliance.
By Mike Chambers

Imagine a world where virtue saves you money. That dream may have danced before the eyes of Paul Bressington, head of IT for BT Global Services Asia-Pacific, as he completed a recent datacenter upgrade at sites throughout the region. Pressed by company policy—and mounting pressure on companies everywhere to improve their “carbon footprint”—Bressington undertook a project to make his datacenter more green.

To do this, he turned to virtualization, a process that lets networks run fewer servers and storage resources. One server virtualized can seem like multiple servers each running multiple applications. Built by Dell, the new environment enabled BT Global Services to save power by shrinking its datacenter’s area and cutting the number of server racks from eight to two. These changes brought a pleasant residual—a cut in operational expenses for the datacenter by an annual 15 percent and savings of approximately A$40,000 in hardware capital costs.

Unfortunately, Bressington’s case is still the exception. Green tech, after all, can be expensive and efficiency savings may accrue slowly. For companies operating in fast-growth environments such as China, there’s often little incentive to adopt the technology, as much as the government would like them to. Why not spend the money on more growth? “It’s only been the last nine months or so that the greening of IT has been big news,” says Michael O’Hehir, a director in PricewaterhouseCoopers’ technology group in Beijing.

Nevertheless, momentum is building, and CFOs will not be able to ignore green IT initiatives for much longer. For one, governments are getting into the act, and experts say that the need to meet new regulatory energy conservation standards will slowly force IT administrators and finance chiefs to reduce energy use. “It’s going to happen,” says O’Hehir. “It’s only a matter of time.”

Where the Heat Is

Where to start? Look no further than the datacenter, typically the biggest energy hog. Large datacenters get hot, and cooling them is costly. According to U.S.-based cooling and power specialist, APC, only about a third of an average datacenter electric bill goes to IT such as servers running online services and network-based software, while around 70 percent is incurred by infrastructure, including rack chillers and air conditioning.

And the cost is increasing, according to market research firm IDC. Over the next five years the price tag for powering and cooling the world’s installed servers will quadruple compared to the growth rate for new server spending. Server power and cooling costs are expected to increase at a compound annual growth rate of 11.2 percent to US$44.5 billion over the same period.

Fortunately, an explosion in storage technologies has allowed companies to reconfigure datacenters with massive storage capacity at relatively low cost and subsequently higher energy efficiency. IT departments are typically inundated by vendors’ sales pitches promoting eco-friendly hardware like new “green machines”—servers, network gear, and storage devices. This new generation of devices is powered by energy-efficient chips and boasts operating systems with improved power management capabilities, such as auto-power on/off.

Another class of vendor promotes software-based solutions like virtualization, power management, and datacenter consolidation, claiming comparable savings but without the capital costs of an IT upgrade. The big players—such as IBM, Sun Microsystems, and HP—preach a combination of these approaches.

The bigger players may have a point. Combining efficient hardware and green-smart software smacks of common sense. “It’s not about the hardware, but how you use it,” says Gary Chan, executive IT architect with IBM’s Systems and Technology Group. He adds, “Even the greenest server won’t save energy if everything else is inefficient.”

“It’s the big vendors who are driving green IT in Asia the most,” says PwC’s O’Hehir. This partly stems from new compliance demands imposed on the vendors themselves. In the United States, plans are in motion to change the rules on government procurement. New computer equipment will be required to be energy efficient and less polluting. Big vendors like IBM, HP, and Dell that have large government contracts are already working to deliver compliant PCs and monitors. In fact, “most new technology products are already made from recycled components and are more energy efficient. All of our latest energy-efficient products use Intel’s lowest power consuming chips, for example,” says Chan.

Sensing an opportunity, IBM, HP, Dell, and Sun Microsystems have announced energy-saving initiatives over the past few months. “As they did in the run-up to Y2K,” says O’Hehir, “large technology providers see this as another huge opportunity to grow their businesses through encouraging their clients to use computing resources more efficiently.”

All the Right Moves

Before investing in a green datacenter upgrade, CFOs need to ask what type of datacenter user their company intends to be, says Paul Li, greater China marketing director for Sun Microsystems. “One type could be dubbed the traditional application user, which wants to do more with less and puts a strong emphasis on savings. The alternative would be an emerging application user, which pumps out network services and applications and to whom delivery speed is more important than costs.”

Much depends on a company’s current IT situation, anticipated growth, and current and expected operating costs. The ideal datacenter arrangement would consist solely of energy-efficient equipment, controlled by sophisticated power management software, consolidated into the smallest physical footprint possible, and cooled at 100 percent effectiveness.

Of course, in the real world of crammed IT rooms and overheated server closets, it’s a different story. So what can green-inclined CFOs do to reduce their datacenter energy use?

The U.S. Environmental Protection Agency recommends increasing virtualization, using available power management features on servers, and improving infrastructure items like more efficient cooling to significantly reduce new power requirements. Another simple step is to look at the IT and facilities budgets together, so finance can more easily predict energy costs when evaluating IT service increases.

Most vendors advise that CFOs should consider right-sizing their infrastructure. They recommend modular, scalable servers, power units, and cooling gear that provides “as needed” capacity to avoid “just in case” oversizing. CFOs should also ask their IT departments about the floor layout, which can have a huge impact on datacenter energy efficiency by improving air conditioning flow. Make sure your layout employs a hot-aisle/cold-aisle configuration with suitable air conditioning locations throughout. Instead of room-based cooling, utilize a more efficient row-based scheme to further cut costs, advises APC.

Questions that a CFO asks his IT department now will help stave off future problems as energy costs continue to rise.With growing regulations and awareness of the cost savings from a more energy efficient datacenter, CFOs who are ahead of the curve may well be recognized for their foresight.

“A large enterprise datacenter could draw up to 1 or 2 megawatts,” says IBM’s Chan. That’s enough to power a small city. Imagine saving money on a power bill like that.

Mike Chambers is a contributing editor for CFO Asia.