June 19, 2008 | Comments: (0)
Are green IT premiums worth the cost?
Organizations are investing in green computers -- that is, machines that are energy efficient and built in an environmentally responsible manner -- at ever-increasing rates. Sometimes they pay a small premium to do this. Is it worth it? They seem to think so.
And their belief is not unfounded. Organizations that invest in green hardware find that the energy savings, extended product lifecycle, and other benefits more than make up for the additional price of that hardware.
What's more, demand for green computers appears to be on the rise. Twenty-two percent of the computers shipped worldwide in 2007 (around 109 million) were registered on EPEAT (the Electronic Product Environmental Assessment Tool), up from around 10 percent in 2006. Maintained by the Green Electronics Council (GEC), EPEAT is a searchable database of computer hardware that meets a strict set of environmental criteria. Among them, registered products comply with Energy Star 4.0; have reduced levels of cadmium, lead, and mercury; and are easier to upgrade and recycle. Depending on how many criteria they meet, products receive a rating of Bronze, Silver, or Gold.
[ For more on the EPEAT rating system, please read "MacBook Air vs. ThinkPad x300: Which is greener?" ]
The price of greenovation
One of the key questions, though, is whether companies need to pay a premium for the green traits they seek. Patricia Atherton, engineer manager at hardware vendor MPC, acknowledges that, at times, the answer is yes, depending on the rating level (Bronze, Silver, or Gold) of the product. "Silver and Gold products will comply with more challenging requirements, and this might affect the cost of certain components," she notes.
For example, she says, "LCD on monitors, laptops, and integrated systems must have reduced amounts of mercury ... In order to elevate this product rating, the mercury content must be reduced to a minimum or eliminated. The technology is there -- LED backlit LCD -- but at a slightly higher price than a regular LCD with CFL lamps."
Another factor, Atherton says, can be the use of plastic parts containing high recycled-material content. "Since this may affect the properties of the plastics, requiring special techniques or materials, plastic components manufacturers may increase their prices as their own costs increase."
Brad Fry, environmental standards compliance engineer at Canadian computer manufacturer MDG, noted that there are, for now, higher costs associated with designing and certifying greener products. "There are some moderate product cost increases but no significant extra labor costs incurred in the production process for a greener computer. However there will be a one-time increase during the product design phase for engineering and certification costs to ensure quality and technical standards are met."
Ultimately, though, he expects prices for green wares to drop: "As demand for more environmentally friendly computers increases, the volumes sold are increasing, and therefore, the extra engineering costs become less significant and the product costs differences will continue to diminish."
Worth the price
Even if companies do pay a slightly higher sticker price for a green product, its energy efficiency, longer life, and other green-oriented benefits often more than make up for the cost. The Green Electronics Council says, "manufacturers and purchasers will actually save almost four billion dollars (US $3,660,553,851) over the life of the EPEAT products sold in 2007, primarily from reductions in energy use."
Attesting to this fact is Kaiser Permanente. The company purchased 55,271 desktop computers, 57,165 monitors, and more than 9,600 laptop computers registered with EPEAT between October 2006 and 2007. Laurie Spoon, executive consultant, procurement and supply, says the health-care organization hasn't found that it pays a premium for purchasing green computer products, especially when taking into account the total cost of ownership, including energy consumption, repair and maintenance costs, operational costs, replacement of components, and the like.
"Of all the successfully implemented environmental initiatives in Procurement and Supply, almost all were cost-neutral or delivered cost savings when total cost was considered," she says. "For example, the EPA calculated that for the purchases Kaiser made [between] July of 2006 through approximately the middle of 2007, we achieved $4.7 million in savings by purchasing EPEAT-registered desktop computers, monitors, and notebook computers, mainly through reduced energy usage."
The City of San Francisco has had similar experiences, according to Chris Geiger, manager of green purchasing and integrated pest management programs for the city's Department of the Environment. San Francisco has an ordinance requiring city departments to buy green products, and establishes a prioritization and standard-setting procedure. "[M]any of our departments do pay extra for certain green products. The extra expense is usually justified by considering the long-term costs of health care, maintenance, etc., and also considering the life-cycle impacts of the products on the environment."
Win-win situation
Customers aren't the only ones who can reap potential benefits by adopting green practices that tie in with EPEAT requirements. For example, MDG has saved money by implementing an EPEAT-based Customer Packaging Take-Back Program, according to Fry. Through the program, the company will take back product packaging from customer sites, then reuse it. "MDG has actually been able to reduce (through reuse) both packaging costs and the cost of excess packaging cardboard and foam disposal. Savings like these are accumulative and will increase over time as program adoption becomes more prevalent," he says.
But the company's customers are also enjoying benefits from the program: "High-volume clients especially appreciate the take-back options as it keeps their shipping docks clear for more important deliveries," Fry says.
It's also noteworthy to consider the less tangible, greater-good benefits of the adopting more sustainable IT products. The GEC says that the adoption of so many EPEAT-registered wares last year will:
- Reduce use of primary materials by 75.5 million metric tons, equivalent to the weight of more than 585 million refrigerators
- Reduce use of toxic materials, including mercury, by 3,220 metric tons, equivalent to the weight of 1.6 million bricks
- Eliminate use of enough mercury to fill 482,381 household fever thermometers
- Avoid the disposal of 124,000 metric tons of hazardous waste, equivalent to the weight of 62 million bricks.
- Save 42.2 billion kWh of electricity -- enough to power 3.7 million U.S. homes for a year
- Eliminate 174 million metric tons of air emissions (including greenhouse gas emissions) and almost 365 thousand metric tons of water pollutant emissions
- Reduce 3.31 million metric tons of carbon equivalent greenhouse gas emissions -- equivalent to removing more than 2.6 million U.S. cars from the road for a year
It's heartening, to me, to learn that organizations are finding that green can, in fact, pay for itself. With time, as demand for energy efficient, environmentally friendly products continue to rise, costs will undoubtedly drop. Sooner or later, in fact, I'd wager those sorts of traits won't even be viewed as extras so much as expected features.
Posted by Ted Samson on June 19, 2008 03:00 AM
May 15, 2008 | Comments: (0)
Stark statistics shed light on the needs driving green computing
If a picture's worth a thousand words, how many are statistics worth, I wonder? I have some numbers this week that speak volumes as to why so many companies have green IT on the brain -- or why they should.
These figures come from management consultancy McKinsey and Company, part of a report titled "Revolutionizing Data Center Efficiency," issued at the recent Uptime Institute's Green Computing Symposium. If someone at your company is pooh-poohing the notion of even investigating sustainable IT opportunities, some of these numbers might give them pause to reconsider.
$11.5 billion - The total estimated energy bill for datacenters come 2010, up from $8.6 billion in 2007. Driving that figure: The installed server base is expected to grow by 16 percent to as many as 43 million machines worldwide; energy consumption per server is increasing by 9 percent; and energy prices have risen by an average of 4 percent, according to McKinsey. That, of course, means that if you're feeling some pain now from high energy prices or insufficient power, it's going to get worse if you don't make some changes.
25 percent - The amount of the IT budget at a typical company that goes toward datacenter costs. Indeed, the datacenter is expensive to operate, with 17 percent of the costs going to hardware and storage and another 8 percent going toward the facilities that support those machines. Of course, the report notes that not all the facilities costs associated with maintaining your IT infrastructure appear in the IT budget, so it's conceivable no one at your company is really aware of how much it costs to run, say, a midtier server each year.
$1,870 - The annual operating expense for powering and cooling a single midtier ($2,500) server in a tier III datacenter. The number is $1,320 for a tier II datacenter, and it reaches $2,020 in a tier IV datacenter. According to the report, "servers are often housed in a higher tier datacenter than necessary, further driving facility costs." The point, of course, is that "cheap" servers really aren't cheap at all, so the "throwing hardware at the problem" approach isn't particularly sustainable.
30 months - The amount of time until 90 percent of companies with large datacenters will need to add more power and cooling. That's two and a half years. Not a lot of time, is it? And if you're already out of floor space or drawing all the power you can from your local utility, you're in trouble. There also may be opportunities to unplug systems that are grossly underutilized.
5 to 30 percent - That range represents the average utilization of the distributed systems in the datacenter today, which, according to the report, handle 80 percent of all computing demands. It's a fairly broad range -- but even if you're running all your servers at 30 percent utilization, you're still not getting as much work out of them as you might.
70 to 80 percent -- The utilization of mainframes that handled 80 percent of all computing demand from 1975 though 1985. It's an interesting statistic, certainly. Perhaps because these machines were so much pricier than "cheap" servers today, companies worked harder to get more bang for their buck. IBM will certainly make the case that mainframes today still offer higher energy efficiency than, say, multiple blades.
146 - Among a total of 458 servers at four production datacenters, McKinsey found that 32 percent (146 in all) were running at or below 3 percent peak and average utilizations. That means nearly one-third of these machines were plugged in, wasting energy to spin and to be cooled -- and doing virtually no work. Those machines need to be put to work or unplugged.
15 percent - The amount of cabinet space that can be reclaimed through techniques such as more efficient racking and the removal of servers that have been decommissioned yet still left in cabinets, turned on, according to McKinsey. Imagine being able to reclaim 15 percent of your floor space. That should buy you some time before having to move forward with a costly datacenter expansion.
65 percent - The reduction in physical server count you might expect through virtualization. Your mileage may vary, both for better and worse, but we've seen plenty of big wins through virtualization, leading to more floor space and lower energy costs.
55 percent - That's the average amount of UPS, cooling, and other facilities that are underutilized in a datacenter. It's not just the servers and other IT hardware draining the juice and the bottom line.
74 degrees - The temperature to which cold aisles can be set in datacenters. Most datacenters are overchilled, which is costly. Adjusting the temperature, along with some inexpensive basic best practices, can put a dent in those cooling bills.
Beyond the cost savings you stand to reap from bringing green practices to your datacenter, there are also environmental considerations. Whether or not you're concerned about your company's carbon footprint, legislators are becoming increasingly interested. Here are more figures to chew on:
0.3 percent - The percentage of CO2 emissions worldwide produced by datacenters today
0.6 percent - The percentage of carbon dioxide produced by the airline industry today
1.0 percent - The percent of carbon dioxide produced by the steel industry today
170 metric tons - The amount of CO2 that datacenters worldwide currently produce per year. (As an interesting point of comparison, that's more CO2 than the entire country of Argentina produces in a year, which totals 142 metric tons.)
670 metric tons - The amount of CO2 that datacenters worldwide are expected to emit annually by 2020
Costs, environmental impact, and government interest -- what other motivators do you need to realize the urgency of adopting greener IT strategies? Hopefully these numbers provide some perspective on where things stand and where they’re possibly headed. As to what to do about it, we at InfoWorld have several ideas here as well as in previous articles, including: employing PC power management software, harnessing datacenter heat, using thin clients, thin provisioning and other green storage strategies, and more.
You might also find inspiration and guidance from the sustainable IT projects we highlighted among the 2008 InfoWorld Green 15.
Finally, I recommend checking out the McKinsey and Company report I've discussed here, which is available for free through the Uptime Institute Web site. It contains plenty of useful guidance on dealing with these problems.
Ted Samson is a senior analyst at InfoWorld and author of the Sustainable IT blog. Subscribe to his free weekly Green Tech newsletter.
Posted by Ted Samson on May 15, 2008 03:00 AM
