Energy costs are on everyone’s minds these days — particularly IT managers. The data center electric bill that used to be “hidden” within overall facilities costs has become a line item in many IT budgets. The amount is far from trivial.
Budget-strapped IT managers are under pressure to cut the operational expenses associated with electricity, and to reduce the data center’s “carbon footprint” in conjunction with corporate “green” initiatives. As a result, energy efficiency is becoming a key consideration in the IT decision-making process, with IT managers looking not only at performance metrics but also “compute cycles per watt of power.” IT shops are also utilizing virtualization, cloud computing and other technologies to reduce the rising cost of the power consumed by high-density servers and storage.
Upper management is starting to take notice. According to Gartner, Inc., more organizations are viewing sustainability as driving financial performance, operational efficiency and business enablement rather than risk mitigation, corporate philanthropy and the “triple bottom line” of people, planet and profit. By 2015, improving sustainability-related performance will become a top five priority for 60 percent of major North American and Western European CEOs.
“Sustainability is no longer a ‘soft’ and tangential aspect to organization performance,” said Simon Mingay, research vice president at Gartner. “A sustainable approach to business activities is generating tangible business benefits for organizations today, through a combination of operational efficiencies and market growth opportunities.”
According to researcher Jonathan G. Koomey, Ph.D., the electricity used in U.S. data centers accounted for 1.7 percent to 2.2 percent of total electricity use. Growth in data center energy consumption has slowed — after doubling between 2000 and 2005, data center energy consumption grew just 36 percent from 2005 to 2010 thanks in part to server virtualization, consolidation and improved data center designs.
Cloud computing aids the overall efficiency of data centers. As Professor Koomey noted in his study, cloud computing environments typically have much higher server utilization levels and infrastructure efficiencies than in-house data centers. As a result, IT services delivered via cloud architectures use less energy than comparable services delivered via a traditional environment.
While IT can continue to improve its own energy efficiency, the much bigger opportunity is applying IT to analyze, optimize, manage and otherwise improve the sustainability performance of the business itself. The applications of IT are many, and they are highly contextual according to the industry sector. Recurring themes continue to include the easy and obvious, such as the use of collaboration tools to substitute for travel, increased building utilization and efficiency, workplace management and remote working.
Increasingly, IT is also being employed in more sophisticated and complex situations, including manufacturing process reengineering, real-time automation and control in production environments, real-time route optimization for vehicles, natural resource management and optimization, management of the supply chain, and business analytics, all of which deliver efficiencies and reduce costs. Sustainability’s enhanced corporate value will be enabled by a maturing set of information systems and decision support tools that help the CFO and the finance team make better-informed decisions.
As perspectives continue to evolve, sustainability is also about meeting the expectations of investors, customers, employees and other key stakeholders, by making better-informed decisions that explicitly balance commercial, environmental and social performance standards and criteria. Gartner analysts said information-enabled processes and technologies will be a key enabler in achieving all these elements, providing a lens into organizational performance that is highly fragmented.
“One factor that has limited the traction of sustainability programs by the CFO and finance team, in particular, has been the lack of frameworks, systems and tools, which expose sustainability-related performance data and practices, provide decision support, and connect sustainability performance to financial performance,” Mingay said. “Such tools enable the CFO and the finance team to bring to bear their analytical skills on the issue of sustainability, and assist in making better-informed and more-balanced decisions that include the evaluation of sustainability and risk in the decision-making process.”
