A CIO's Guide to Going Green

The Nobel Prize-winning economist Milton Friedman wrote in 1970 that a company's sole purpose "is to increase its profits" — which meant avoiding any decision that improved the environment but not the company's bottom line.

Today, being mindful of your business's environmental impact — "going green" — is one of the top emerging technology trends for CIOs and other business leaders. That's because, unlike when Friedman was writing, CIOs can now focus on helping the bottom line and the environment.

What does "going green" mean?
For CIOs, "going green" is shorthand for taking steps to reduce energy use — and, importantly, energy expenses — across the IT function. In practice, this includes building energy efficient data centers, simplifying IT infrastructure through server consolidation and virtualization solutions, and using power management software and supplemental cooling technologies in existing data centers.

Each one of these steps involves the type of rigorous analysis, planning and implementation required of any IT project. From a business standpoint, though, CIOs are beginning to recognize that going green presents the type of financial and operational benefits that can not only help the bottom line in the short term, but can create a true competitive advantage for the business.

Bottom-line benefits
If you need a mantra that would fit nicely on a wall plaque, try this: Use less energy, increase shareholder value.

Improving your energy efficiency will immediately reduce your operating costs. And with energy prices rising, every bit of efficiency you create today will save even more money over the long term. That means less pressure on future IT budgets, and more capital for strategic investments.

How much savings can you expect? Surveys indicate that data centers take up just 2% of a company's floor space, but account for 40% of a company's energy use. And because data centers have doubled their energy use in the past five years, that ratio will most likely grow.¹ Add to that increased energy costs — according to the U.S. Environmental Protection Agency, U.S. commercial electrical costs increased by 10% from 2005 to 2006 — and you have a recipe for substantial savings.

Creating more energy efficient data centers does more than just reduce energy costs, though. More efficient servers deliver more computing performance per kilowatt, providing your company with faster throughput and speed to market related to decisions based on your data.

And in the worst-case scenario, creating more energy efficiency is not just beneficial to a business, it is essential: Some data centers are simply running out of electricity. If you can't expand your computing power, either because you can't get any more electricity into the data center or because you can't get enough heat out of it, your business is stuck.

Social benefits
Many of your company's customers, business partners and employees may agree with Henry Ford, who said "a business that makes nothing but money is a poor business." Developing a reputation for corporate social responsibility in terms of being a good steward of the environment can have an enormous, positive impact.

CEOs have discovered that being known for "doing good" can help attract and retain top talent, not to mention making a business more attractive to the investment community. And being truly committed to environmental concerns — by building an energy efficient data center, for example — can be a competitive differentiator that can help create sustainable revenue growth.

Consider the California-based Web-hosting company Affordable Internet Services Online (AISO), which uses solar power to operate its data center. AISO was named one of Inc. magazine's Top 50 Green Companies, and is the first and only public data center member of the U.S. Green Building Council (USGBC). And how is AISO's business? The company has been growing at an average rate of 20% annually. With clients ranging from small businesses to large corporations, AISO hosts websites worldwide and has seen significant interest in its services because it is wholly solar and "green," says Phil Nail, the company's co-founder and chief technology manager.

Getting started
Where should a CIO begin? It may come as a surprise that 77% of IT departments are not responsible for their data centers' energy bills.² If you're not paying the bill, you probably don't know how big it is. So start by learning about your energy use. Take a holistic approach, from a site-and-facilities perspective, so you can understand your utilization of technology.

Then, explore the root causes of your energy demand. Look at how you can design applications to be more efficient, for example, and how you can manage data over its lifecycle to eliminate redundant copies and reduce storage needs.

You might also want to engage your CFO in a business discussion around energy and IT, and how you can work together.

From these starting points, you'll be able to identify your opportunities for improvement — and seize the ones that make the most sense for your business.

Case study: Bryant University boosts energy efficiency with a solution from IBM

White paper: The green data center

Project Big Green: Big Blue Goes Green

Become more energy efficient

Sources:
1. Jonathan Koomey, Ph.D., staff scientist, Lawrence Berkeley National Laboratories
2. InformationWeek "The Cold, Green Facts" September 2007.