Rising power costs drive adoption of ICT sustainability measures

Friday, 10 October, 2008

Concern about rising power costs is the primary motivation for Australian organisations when it comes to implementing environmentally sustainable information and communications technology (ICT) solutions. The finding, which has been released by Frost & Sullivan in its latest Market Insight study — Environmental Sustainability and Technology: Opportunities for Green IT, supports the idea that emissions trading and the consequent increase in the price of power will hasten the adoption of sustainable ICT solutions and help reduce energy use.

The report identifies that while most organisations have limited understanding of the likely impact of emissions trading, 28% of respondents believe it will have a significant negative effect on their business, particularly in the need to save power and reduce reliance on fossil fuels. It’s a concern that is helped along by the increasing number (28%) of CIOs and IT managers holding budget responsibility for their own data centre power usage and one that Frost & Sullivan believes may increase the uptake of emissions-reducing technologies and practices.

The study notes that Australian businesses are relatively mature in their actions in addressing environmental concerns with 43% of respondents having implemented sustainability policies with measurable targets. CIOs shoulder a portion of the environmental burden with 27% of IT departments having emissions targets to meet. Few organisations, however, have put in place the infrastructure required to meet those targets. For example, 65% of organisations noted that they are attempting to reduce power use yet only 26% have implemented technologies to measure power use, while 32% have taken steps to redesign their buildings and only 16% have engaged environmental consultants.

Other factors

While energy costs emerge as key to the adoption of environmentally friendly technologies, other factors include the need to meet the requirements of partners in the supply chain, greater efficiencies offered by technologies such as virtualisation and the desire to be seen as a responsible corporate citizen.

Internationally, emissions data is increasingly being recorded throughout the supply chain, allowing organisations such as retailers or manufacturers to provide full accounting of the amount of carbon emitted to produce and market a given product. The study suggests that similar requirements will be sought by major Australian retailers.

Similarly, large Australian government departments are already requiring suppliers to show how they will reduce their greenhouse gas emissions through the life of a contract, and those organisations are in turn starting to pressure their own suppliers.

Frost & Sullivan predicts that growth in such trends will lead to everyone in the supply chain ultimately feeling some impact from the move towards greener practices.

Organisations are also examining how enabling technologies such as videoconferencing, collaboration tools and web applications for the dematerialisation of services can help reduce emissions — and costs — by eliminating unnecessary travel by staff and clients. The report highlights the role of virtualisation, or the implementation of multiple operating systems on a single device, which is helping to increase the efficient utilisation of servers, reducing the number of servers required, which in turn is helping to decrease energy use and recurring power consumption costs.

The challenge for IT

While much of the current sustainability discussion revolves around power consumption reduction, the sustainable use of ICT includes other elements such as product life cycle management, reduced business travel and commuting, conservation of consumables like paper and printer cartridges, the location and design of physical facilities and more responsible use of resources such as water.

At present, almost a quarter of the businesses involved in the survey don’t have a dedicated sustainability budget, while another quarter spends 5% or less of their total ICT budget on environmentally friendly projects. Frost & Sullivan predicts that this figure will increase as organisations begin to see the benefits in terms of efficiencies and cost savings.

Andrew Milroy, industry director, ICT practice, Frost & Sullivan, comments, “Regardless of whether being driven by cost or green considerations, CIOs have to consider how to reduce energy consumption before their customers, partners and investors start to demand it. Paying more attention to data centre server and storage practices, better planning for data centre capacity and location, plus the introduction of more efficient technologies are all important steps that can be taken now.”

The study looks at ICT sustainability intentions and practices among Australian organisations, with findings drawn from interviews with 101 senior executives with control or influence over sustainability and IT budgets. Each executive represents an organisation with revenues in excess of $5 million and manages an IT budget of more than $1 million.


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