Rounding up the Green IT figureheads

Anyone involved in the IT industry will, or definitely should have, a view or opinion on the Green debate.

IBM, Microsoft, Cisco and VMware were among those represented as CRN gathered the channel’s most significant commentators at Sydney’s Kirribilli Club last month to discuss all that is Green.

To frame the morning’s discussions, Philip Allan, research manager for vertical markets at IDC, kicked off proceedings with a short presentation on the facts and figures around the Green IT issue. Allan touched on the reality versus hype debate, the CIO agenda and the need for action items in the industry.

Highlighting IT usage in Australia, Allan said there are 14,773,685 desktops, 6,960,108 laptops and 483,547 servers in Australia. Also pertinent is the IDC claim that roughly 50 cents is spent on energy for every dollar of new computer hardware.

“We look at Green across a variety of dimensions. In terms of defining Green IT, a whole load of analysts got together and the idea of our definition is that it covers the entire lifecycle. This is from design and the manufacture, the use and then right through to retiring,” said Allan.

“In terms of the size of the problem and actually identifying its nature, companies in Australia spend around $30 billion a year on all aspects of IT. In terms of our contribution to emissions in the region, Australia is around 20 per cent of Asia-Pacific and around two per cent of global emissions,” added Allan. “Are people interested in Green? Yes. Why are they doing it? It is about cost.”

Wright: The Federal Government is mad keen on finding innovative ways to meet two issues. The first is greenhouse gas. With the signing of Kyoto, they’ve nailed their flag to the mast. The other issue is cost savings. The big role we can play going forward is understanding virtualisation and energy savings. As an industry we need to come up with innovative ways to meet both the cost issue and the environment issue. This is one of the key challenges going forward.

Dickerson: There is a lot of talk about cost reduction, but an interesting piece of information would be how much more people would be willing to pay to go Green?

Allan: We have looked at that. We have those results and they are a bit disappointing. For around 500 respondents across APAC, Green was very much a priority. Are they prepared to pay a premium? At this stage, no.

Wright: It would be a very brave response for someone to put up their hand and say they don’t care about the environment. Everyone wants to go Green, but I’m not sure how much they are prepared to pay.

Dickerson: An interesting piece of information to get back would be how much [people are willing to pay]. Is it two per cent? There will be a sweet spot and that would give resellers, vendors and everyone else an idea on how hard they could go in terms of pursuing the Green angle as they would know how much people are prepared to pay.

Allan: A question I have for the vendor community is, do you think that it should be baked-in to the price? If you can make your product Green then you should.

Johnson: As a vendor we can provide an efficient product which ties in nicely with reducing cost and complexity. As an industry we can do a lot.

Dickens: We have done a bit of a study where we looked at 800 IT purchases about a year ago. 280 of those were in Asia-Pacific. We found that 44 percent of respondents said they would pay a premium [to go Green]. The question of how much of a premium they would pay depends on what product it is.

Walters: Just on the point of should it [Green] be part of the price or should they pay a premium? What we are seeing at Ingram, distributing a number of vendors, is that there is a difference with the enterprise-level price sets. This is because the total cost of ownership allows you to provide a solution which includes being Green. At the volume end of the scale people are not prepared to pay extra.

Mayhew: If you think about the price per piece, there is the price of the device and there is the running cost of the device. Users should be prepared to pay more as they can save money down the line. That is a hard thing to sell in the volume business, but the opportunities are there. For example if you are a PC manufacturer you could start saying that the cost of the device is this. The electricity costs of running it is this. The total cost of the device and running it over four years is this versus something else which is not Green.
Dickerson: If you can show a straight cost saving in the long-term, then people are quite happy to go Green. If you say “go Green” and pay nothing extra then everyone would do it. If you say “go Green” and pay nothing extra for two years, a lot of people would still do it. I don’t think there has been enough research done around the cost savings.

Spiteri: The action of energy optimisation, in some cases, is elected. In other cases the reason data centres are doing this is because they are running out of supply power. We have a roadmap which says you look at the whole thing holistically. You assess what is being demanded on the IT side, best practice and then the infrastructure. All these aspects are shrouded by a thing called Green. What you might see this as corporate citizenship starts to move into policy and then starts to move into regulation. That star rating you see on refrigerators, that will move to infrastructure products too.

Wright: I think the government has already put a stake in the ground in terms of a level of understanding and requirement relative to the IT sector. There is this fundamental level of understanding. The industry needs to be working in conjunction with the government and not responding to some large overbearing government iron fist. I think there is a level of collaborative work that needs to go on and that is the role the industry needs to play with the government. The consumer knows they have got to do something, but they don’t know exactly what that is. I think the IT industry as a whole has a responsibility in terms of education and I think that is the link between the IT industry and corporate responsibility.

CRN: When do you foresee that Green regulations, such as those in Europe, will be enforced in Australia?

Larsen: Our experience is that legislation here in Australia is actually more strict than Europe. We have got a thing called the NGER (National Greenhouse and Energy Reporting) Act here and that affects the big end of town.
Wright: Once the government works out that all these mandatory things are in place and then realise they are one of the primary offenders in this, there will be some significant changes. The federal government taxi bill is one of the third or fourth largest expenses, it is ridiculous. The government has made a lot of rules and once they sit back say “I don’t think we’re actually adopting a lot of this”, that’s when I think things will really get interesting.

Harapin: One of the things that the Federal Government is working on is policy around different types of technology and use of that technology. One of the things we hope to achieve is an industry forum where the major equipment manufacturers get together and have a discussion around how we can bring some policy in place which is not offensive to the commercial realities of how we as an industry do business.

Chan: From the storage point of view, in July last year we introduced our twin power hard drive. Initially the market wasn’t that accepting of it. They said: Why should we pay a premium? After three months of our putting in effort, the pick-up rate has gone up considerably. What we had to do was reduce the price gap and now people realise for the extra few dollars they are saving 40 percent of their power consumption.

Dickerson: There is a clear vendor opportunity and when a vendor comes out with a strong Green message there needs to be an education process too. I think the vendor that jumps on that is going to be the vendor that is seen as the leader in Green.

Allan: Just to throw a curveball question to the table, maybe the problem is that we’ve all been too successful. As an industry, have we sold too much IT?

Wright: I think only if the IT industry chooses to take a path of completely non-innovative solutions. In terms of where the industry looks next, I think the role in terms of innovation of product deployment or using technology will alleviate certain pressures, be they economic, greenhouse orientated or reducing our carbon footprint. With all of these types of questions IT has a role to play.

If we choose to do zip and focus all our energies on addressing our now problem we will spend little time on the R&D space and looking at how we can address where this thing goes. Green awareness gives us a huge opportunity as an industry to flog some more stuff. I’m not saying that we are not part of the problem, I am saying we can be a massive part of the solution.

CRN: Do you think that you have made Generation Y that savvy that they expect you to provide a 100-percent Green product that they can recycle?

Wright: I don’t think Gen Y expect a bio-degradable, brown-paper laptop, but I do think they want to have an understanding that there is a higher purpose involved in terms of the industry as a whole. Even in the workplace you demand the same things as you demand at home. There is no longer this concept of technology just in the workplace. No one is tied to their desk, your phone is your office.

Dickerson: If every organisation in Sydney said that everyone has to work from home one day a week, that would reduce transport in Sydney by 20 percent.

CRN: Is that really feasible?

Wright: Oh god, yes.

CRN: I know it is feasible through technology, particularly with enterprises, but are SMB starting to embrace technologies such as teleconferencing too?

Dickerson: Some of the smaller guys with maybe three offices can do it for just a few hundred dollars.

Wright: People will embrace technology if it is easy to use, if the experience they get from using the technology is a premium experience. It is about optimisation. Technology is useless if it’s not used all the time.

Allan: What you are saying is that technology isn’t actually the problem, but the solution?

Wright: Absolutely.

Mayhew: Is this a business opportunity for the vendors and the channel? Absolutely. There is a responsibility and an opportunity. As this conversation has evolved this morning I can’t help thinking that the economic and return on investment equations are the arguments that will drive decisions and changes in behavior at all ends of town. As an industry we have an opportunity to work with more clarity on providing the data and the heavy evidence that can make a consumer or an enterprise to make a decision. I don’t want to come across too sceptical, but maybe I am. Green is interesting, Green is important, people are interested in it and will talk about it. Will they pay any more? Only if you can provide a business case that substantiates the extra investment.

Allan: Just to wrap things up, I thought the last question should put you on the spot and ask what is holding you back from being more Green? Plus feel free to add anything else too.

Torre: Nothing is holding us back, we are actually moving forward. We have already released a product which is Green. We have increased sales of certain products which are now Green, where previously we were selling hardly any of those products. We are a social company, we have social responsibilities to do things from a manufacturing point of view, from a product delivery point of view, and for the afterlife of that product. One of the things which I think is really frustrating is the lack of clarity from the government and the expectations, as that’s what confuses people. This all comes back to education.
Harapin: From VMware’s perspective, Green is one of the big drivers of why we have been so successful as an organisation. 50 per cent of our firm’s electrical use is IT-related. We have gained a lot of big business recently due to the CEO signing off because of the Green impact. We are seeing Green as a very important topic, with large and small organisations.

Spiteri: Just in the areas which we operate in, it is a financial model. People want to cut down their energy costs.

Walters: I think it is cost and I think it is government regulation not being strong enough yet. The main thing is the practicality of it all. We have got to make it easy to do business with and if we don’t make it easy it won’t happen. For instance, in my garage today, I have a black, a green, a yellow and a blue bin. Four bins, where three years ago, I had one. There should be a computer bin in there somewhere too potentially.

Dickerson: Is there a central ewaste collection company?

Torre: Yes, but the problem is what they do with it afterwards.

Dickerson: I think we need the data that we can point to as an industry and say to end-consumers: Here is the information which assesses the total lifecycle of the equipment. We need to have cold hard research data which shows that there is a benefit for them.

Wright: I think an inherent awareness around the size of the issue is one of the main challenges, from the consumer perspective and across the board. I don’t think there is a quantifiable understanding of the impact the industry currently has or clear steps to reducing issues. It is about awareness.

Morton: We are in danger of just creating noise as an industry. To move forward I think we are going to have to turn that noise into salient, substantive comments.

Chan: I agree with the Green regulations coming into place and while we are all waiting for this, what we are actually doing is spending more money on the marketing side.

Johnson: I don’t think there is anything holding us back, I think there is probably too much to do. It is important to prioritise what to do and not jump to the detail. It is the lifecycle approach. As an industry how do we keep an eye on the lifecycle issue? We are a hyper-competitive industry, so when we talk about standards it is important that we continue to have that dialogue as an industry. There is always that temptation of “my solution is greener than yours”, then we will start to lose our way because we are fighting amongst ourselves. Yes it is a competitive weapon, but as an industry we should be socially responsible.

Larsen: I agree to a certain extent with a lot of what has just been said. I think within businesses one of the things holding them back is who is responsible for Green. Who has got the budget?

Dickens: I would also agree with a lot of the comments that have been made already and I don’t think there is anything holding the industry back. The issue comes down to the quality of the regulations, the quality of the standards, the quality of the information provided to customers. The regulations and standards will enable the outcome.

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