In-Depth

Green Is Good for Profits as Well as for the Planet

Microsoft and its partners are discovering that environmentally responsible computing isn't just a nice thing to do -- it's potentially lucrative, too.

• By Fred Bayles
• April 01, 2008

Ravi Agarwal, CEO of hosting provider groupSPARK, says smarter use of servers can reduce businesses' power bills-and their impact on the environment.

Saving customers money was the main selling point when Ravi Agarwal founded groupSPARK, a private-label Microsoft Exchange hosting provider, in 2002. But as the Burlington, Mass.-based company grew rapidly, the phrase "global warming" became part of the sales pitch as well. Now groupSPARK emphasizes how using its services can help save both money and the environment.

"The idea was built around economies of scale that we would bring," says Agarwal, who is the Gold Certified Partner's CEO. "I didn't think consciously about the environmental aspect. Now that global warming has taken center stage, it's become both an environmental and a bottom-line thing."

Agarwal is far from alone in selling-and practicing-environmental awareness. IT companies from the smallest independent software vendor to Microsoft itself (see "Microsoft Green: Altruism and Business") are developing products and services under the banner of green computing. Such products offer clients savings along with a sense that they're doing something to help combat climate change and otherwise protect the environment.

Many companies also practice what they preach, creating new CEO (as in "chief environmental officer") positions on their management teams and establishing ambitious recycling plans and energy-efficiency programs. Some have spent even more to design and construct state-of-the-art green buildings that have become an essential part of their companies' images.

Houston-based Equivalent DATA, a Registered Member that provides custom software and hosting services to law firms and corporations, recently moved its operations centers in Chicago, New York and Dallas to a 20,000-square-foot Houston structure that's been certified by the U.S. Green Building Council and provides significant savings on electrical and water usage.

Equivalent DATA President Mike Medrano expects to see more IT companies migrate to the same nexus of good business and social consciousness, building green "because it's the right thing to do and it's the smart thing to do."

But others take a more cynical view of the green "revolution," which has become a marketeering buzzword to sell everything from cars to coal. Jim Johnson, chairman of Standish Group International Inc., a Boston-based research company that monitors the IT industry, says green computing could yet turn out to be another high-tech trend that flares, then fades.

"There's a lot more smoke than fire right now," Johnson says. "It doesn't mean it won't catch on, but right now we're seeing less enthusiasm from those who have to implement it than those who wish they would."

Power Surge
The interest in green computing is part of a powerful social and political movement stirred by growing concerns about global warming and energy costs. While the debate continues as to whether humanity's output of carbon dioxide and other greenhouse gases is the chief culprit for melting ice caps, rising temperatures and sea levels and a string of droughts and deluges, there's no doubt that the business world's hunger for energy has played a big role in the surging demand for power.

A recent study by the Lawrence Berkeley National Laboratory, funded by Sunnyvale, Calif.-based Advanced Micro Devices Inc., found that electricity consumption by the world's data centers doubled between 2000 and 2005 and, if per-server power usage remains constant, could jump another 40 percent by 2010.

A survey of about 400 CIOs and other IT executives by Standish Group International Inc. in October 2007 found that, for most companies, investing in energy-saving equipment was at the bottom of the priority list. "At the end of the day, there are going to be laws written around e-waste and carbon emissions. Now is a great time for businesses to get ahead of the curve." Melissa Quinn, Sustainability Programs Manager, Softchoice Corp. A recent study by the Lawrence Berkeley National Laboratory found that electricity consumption by the world's data centers doubled between 2000 and 2005 and, if per-server power usage remains constant, could jump another 40 percent by 2010. Source: "Estimating Total Power Consumption by Servers in the U.S. and the World," Lawrence Berkeley National Laboratory, 2007

This eye-catching figure only accounts for servers and other equipment being added to data centers; it doesn't include home and office computers, printers and other devices.

Data centers account for 14 percent of the nation's annual growth in electrical power use and 16 percent of the worldwide growth in electrical consumption, according to the Lawrence Berkeley study. Still, this represents only a fraction of the nation's total electrical consumption. When combined with the power needed to cool these centers, the figure still represents just 1.2 percent of total electrical use in the United States.

Building Greener Products
There's little doubt that these percentages will grow along with energy costs. Those two soaring lines on the cost-projection graphs are leading more and more companies to start thinking about the market potential for products that can help contain, or even cut back, energy use and costs.

Intel Corp. already offers chips equipped with Speedstep, which reduces power flow to computers' central processing units when they're at rest or operating at lower than capacity. Intel, AMD and others are now hyping the performance-per-watt of their products -- a kind of mile-per-gallon rating for comparison shoppers. On the software side, Microsoft says the default energy-savings feature on the newly launched Windows Server 2008 could reduce power consumption by up to 20 percent.

Other companies are developing metering systems to help both residential and business customers better understand exactly how they're using power so that they can make intelligent decisions about the best ways to reduce their energy costs. As part of its own efforts to promote the business aspects of green computing, the company recently honored two Gold Certified Partners with Ingenuity Point awards for developing such products. TR Control Solutions Ltd. of Surrey, U.K., was lauded for its ecoDriver Schools, a solution that helps students, teachers and school administrators reduce their organizations' environmental footprints by monitoring power, water and even paper usage. OSIsoft Inc., a San Leandro, Calif., maker of performance-management software, won for its PI System, which helps manufacturers and energy and utility companies track and manage -- in real time -- how different parts of a company use water and electricity.

Other companies are coming out with products that can control use and flow. Petri Salonen, founder and CEO of Tellus International Inc., a Dallas-based Gold Certified Partner that helps European IT companies find markets in the United States, says energy concerns are similar on the other side of the Atlantic. Salonen serves on the board of directors of Ravensoft Ltd., a Finnish Gold Certified Partner that has developed Green Snapper, a software/hardware product that can turn on, turn off and squeeze electrical efficiencies from hundreds of desktops and laptops scattered throughout a building. Green Snapper can be programmed to the habits of different departments down to each worker so that it powers up a workstation in the morning just as the worker arrives -- akin to your automatic coffeemaker anticipating your caffeine needs while you're still sleeping. "If you have 10,000 computers, the energy savings can be substantial," Salonen says.

Offering a Greener Hosting Solution
The phrase "economies of scale" is sufficient to explain the growing popularity of hosting services that rent server space for such operations. The $100 million to $200 million it costs to build a large data center is strong enough incentive for large operations to consider the hosting alternative. While startup costs for smaller businesses are less daunting, it still makes more sense to use someone else's operation than building and running your own -- especially when you factor in the long-term costs of powering such centers.

Agarwal says many small businesses rely on powerful servers that are actually designed to handle hundreds or thousands of users. "You might have 15 to 20 employees using 20 percent of server capacity, wasting all that electrical power," he says. Hosting companies can aggregate 3,000 to 4,000 users per server. With Microsoft Exchange 2007, that number can be doubled. Virtualization capability adds even more capacity. For groupSPARK, it means two virtual servers can now do the work of 11 regular servers. "By having the ability to bring down the number of CPUs, we can bring down the power usage," he says.

This fact is recognized by electric utilities faced with growing power demands. Because there's little business or public enthusiasm for expensive new power plants, utilities such as Pacific Gas & Electric Co. and Southern California Edison now offer financial incentives to companies that use server virtualization projects.

Microsoft Green: Altruism and Business By its own account -- and others' as well -- Microsoft was serious about environmental issues well before "green business" became a buzzword. The software giant has received kudos for eliminating toxic PVCs from its packaging and subsidizing employees who use public transportation to come to work. Its Silicon Valley campus uses a solar-powered system that provides 15 percent of the electricity used at the facility. Its Hyderabad, India, campus recycles rainwater for irrigation and to run water-cooled air-conditioning units. Its recently opened data center in Quincy, Wash., is powered by hydroelectricity. In November, Microsoft appointed Rob Bernard, former general manager of the company's Worldwide ISV group, as its first chief environmental strategist. The company says Bernard's job is to assess its environmental footprint and initiatives and to work with product groups "to create technology innovations in software and hardware that can help enable customers to minimize their impact on the environment." Bernard was unavailable to comment for this article, but in earlier interviews, he has said that Microsoft hopes to encourage and draw on the skills of individual employees in various technology disciplines to come up with greener ideas. Microsoft also sponsored a university competition offering $500,000 in research grants toward the development of power-stingy system architectures and adaptive power management solutions that can increase the energy efficiency of computing systems. In addition, the company has added environmental categories to some of its other awards programs. Microsoft also points to its own efforts in reducing computer energy use. It cites the EPA's estimate that power-control panels on Microsoft operating systems can decrease energy consumption by more than 50 percent by allowing users to limit the idle time before their monitors and hard drives go into standby or hibernation modes. And Microsoft says its new Windows Server 2008 release can reduce power consumption by up to 20 percent. But this is Microsoft, after all, so these claims are accompanied by some criticism. The Vista operating system has been criticized for requiring more electricity and for pushing some users to upgrade their computers, adding to that glut of old PCs headed toward landfills. The global environmental group Greenpeace criticized Microsoft for its setting 2011 as its target year to eliminate toxic chemicals from its electronic products even though competitors such as Apple Inc. and Dell Inc. have promised to finish their own initiatives in 2008 and 2009. But Greenpeace also had kind words for Microsoft for putting its banned-substance list online and, when possible, quickly updating its environmental policies. -- F. B

Setting a Greener Example
The IT world's focus on green computing isn't just about capitalizing on new environmentally friendly products and services. Companies are also looking for ways to go green themselves, both to save money and to do their part to save the planet.

Equivalent DATA's Medrano says to sell green it's important to be green. "We're at a place where we need to understand what we do and how we do it," he says.

Equivalent DATA has developed NeedleFinder, a hosted system that saves money, time and resources for law firms and corporations by searching through the voluminous data produced in litigation and M&As. By creating a paperless searchable data library, it's an end to paper-heavy records departments.

But the story doesn't end there. Equivalent DATA embarked on its own green plan, consolidating its scattered data centers under one environmentally friendly white reflecting roof in Houston. Medrano rattles off facts and numbers that show what the future for IT campuses could be. One robust server replaced five. Walls of thick, reflective glass let in more light and less heat. Waterless urinals save 40,000 gallons of water a year. The bottom line? Energy use was cut by 34 percent; water use by 35 percent. An aggressive recycling system diverts 92 percent of waste that used to wind up in landfills.

This green showplace didn't come cheap. Medrano says recouping the return on investment in design, materials and equipment will take from five to 10 years. Yet he feels that, for both employees and customers, the wait will be worth it. "We have a lot of people come in for tours that are conducted by various employees," he says. "You can see their enthusiasm and their satisfaction in representing what we've done."

Creating a Greener Image
Melissa Quinn's new job title at Toronto, Ontario, Canada-based Softchoice Corp. has generated plenty of attention for both her and her company.

As the technology reseller's first "sustainability programs manager," Quinn, formerly a marketing-team member, fields call after call from the public, and -- more importantly -- from customers and prospects. All are interested in the Gold Certified Partner's new environmental initiatives, ranging from changing out tungsten light bulbs for fluorescents to developing a recycling and energy conservation strategy for Softchoice and its customers.

Quinn's job came out of similar volunteer activities, including an initiative that saw volunteer employees swap hundreds of light bulbs for energy-saving fluorescent replacements. She says recycling and other environmental efforts offer clients ways to replace old equipment with the new components sold by Softchoice.

Such recycling schemes go beyond a feel-good mission. According to research by analyst firm Gartner Inc., about 800 million PCs will be replaced around the world in the next five years, with an estimated 374 million likely to wind up in landfills. Softchoice is capitalizing on this fact with an "e-waste diversion program" for its customers by providing help in recycling their old equipment when they buy new from Softchoice.

"We're developing a one-stop shopping strategy where they can come to us as the recommender of green IT," Quinn says.

Often, however, there's little connection between a business's green initiatives and the bottom line. In some companies, the enthusiasm for going green starts in the lunchroom and travels to the boardroom as individual employee efforts evolve into company culture and strategy.

"We decided that if Al Gore can win a peace prize, then everyone can do their part," says Cara Turano, the Microsoft partnership manager for Computer Technology Solutions Inc. (CTS), a Birmingham, Ala., software solutions company, referring to the former vice president's recognition by the Nobel Foundation for his campaign to publicize the dangers of global warming.

CTS's green initiatives started when one of its developers was looking for volunteers to help the Gold Certified Partner develop some environmental-protection strategies. About 15 people were interested and the numbers grew as employees took on projects from painting the roof a lighter, heat-reflecting color to installing energy-efficient light bulbs that save the company about $4,000 a year.

Now the company spearheads an annual recycling drive in Birmingham that last year brought in 65 tons of old computers and components. Some items get refurbished by a local tech school and donated to local charities. Old monitors are sent to China, where the valuable copper wiring is removed and the plastic melted and reused.

Beyond the promise of new markets, profits and a shinier image, there's a growing realization that concern about global warming and energy shortages may soon lead cities, states and the federal government to develop regulatory carrots and sticks to reduce energy use and carbon emissions. In 2006, Congress asked the EPA to study energy appetites of servers and data centers with a goal of finding more energy-efficient systems.

Although the study ultimately talks about voluntary energy self-policing programs with some government-supported initiatives, such as standardizing equipment energy ratings and providing tax incentives for purchasing energy-saving computers, some see the research as a first step toward future mandatory regulations.

"At the end of the day, there are going to be laws written around e-waste and carbon emissions," says Quinn. "Now is a great time for businesses to get ahead of the curve."

The Doubters
Despite the growing number of encouraging anecdotes about green computing, there are sobering figures about its actual progress. A survey of about 400 CIOs and other IT executives by Standish Group in October 2007 found that, for most companies, investing in energy-saving equipment was at the bottom of the priority list.

Only 1 percent of those surveyed said environmental considerations were "extremely important" when choosing a hosting provider; 23 percent ranked those issues "somewhat important"; 60 percent said they were unimportant. There was similar resistance to questions about spending more for energy-efficient equipment.

Standish Group's Johnson says the company will repeat the survey several times annually over the next few years. He believes that executives might be more inclined toward all things green if they had a better grasp of their energy costs on a departmental level. "It's time for these companies to do energy audits to see where they are and set some goals," he says.

His conclusion: "I don't see a groundswell to save the planet. But if it's seen that it saves money and the byproduct is green, that's the way to win for everyone."