Optimising computing environments of different sizes has both benefits to the bottom line and the planet
Claudia Tan, Business Times 27 May 08;
AS THE US Energy Information Administration (EIA) forecasts the continuation of tight global energy supplies, energy prices will remain high through 2008. Large companies have been vocal in their new conservation and 'green' initiatives, but what is the impact on small to medium-sized companies? How will they balance the cost of opportunity against the cost of energy?
In recent years, the globally interconnected economy has driven the unprecedented growth of small and mid-size companies. Feeding this growth has been an insatiable demand for information and computing power: more IT equipment, producing more heat and consuming more energy.
In the past, many smaller companies have cited payroll, employee benefits and supply costs as crippling. How do energy costs compare over recent years? How do you assess the cost of energy against the cost of opportunity? And how is concern about the environment impacting everyday business policies for small and mid-size firms?
We see a growing number of foreign companies, global and local entrepreneurs incorporating in Singapore, with its latest tax incentives, pro-business policies, streamlined regulations and a booming economy of 7.7 per cent growth.
According to enterprise development agency Spring Singapore, the number of small and medium enterprises in Singapore grew from 149,000 in 2005 to 161,000 last year. With a booming economy and exponential increase in commercial real estate, comes an accompanying need for more power to drive the technology infrastructure.
A stable source of quality power, such as what is available in Singapore, comes at a price and a relatively high one at that. Singapore is rated as one of the more expensive countries in Asean to purchase power.
To find answers to these questions, IBM interviewed over 1,100 executives across 10 markets in Europe, Asia and the Americas. These executives hold leadership roles in information technology (IT) at companies employing between 50 and 500 people across manufacturing companies, financial services firms, retailers, health care providers, professional and IT services companies and hospitality providers.
The study threw up some interesting facts. Most small and mid-size firms said that energy is their largest cost increase over the past two years. More than one in three firms believe that IT accounts for 10-50 per cent of their total energy costs. Over 65 per cent of firms in most industries say that energy efficiency is key criteria when considering new IT investments. More than one in two small and mid-size healthcare providers and manufacturers have an environmental policy in place today.
Nearly one out of two firms interviewed say that energy represents one of their largest cost increases over the past two years. In food and hospitality, 50 per cent of firms say that it is their largest cost increase.
As energy costs increase, an underutilised IT infrastructure can often be a significant contributor to unnecessary consumption. Approximately one out of three firms interviewed believe that IT accounts for 10-50 per cent of their total energy costs. Some firms don't know how much their IT infrastructure contributes to total energy costs. More than one out of four firms interviewed - outside of professional and IT services - could not quantify how much IT contributes to their total energy costs.
Most data centres or server rooms today make inefficient use of the energy they consume. Some industry estimates reveal that more than 50 per cent of the energy used in a data centre or server room goes to power and cool equipment rather than computations and processing.
To combat this, approximately one out of four small and mid-size firms in most industries are evaluating the utilisation and performance rates of their server and storage equipment. This can help uncover inefficiencies on several levels, from room power and cooling to individual system utilisation.
Energy efficient solutions
New opportunities to decrease occupied floor space in the data centre or server room also can be identified. Another one out of three firms - outside of food and hospitality - will purchase more energy efficient IT solutions.
These solutions can include a range of components from virtualisation capabilities for increased utilisation to new liquid cooling technologies to prevent overheating. Some solutions also include active energy management software to better manage resources and utilisation rates across an IT infrastructure.
When considering new IT investments, over 65 per cent of firms - outside of health care - indicate that energy efficiency is 'important' to 'extremely important'.
In any event, energy efficiency is fast becoming a key factor for small and mid-size firms looking to make new IT investments.
Changes to IT capabilities are part of a larger plan of action to reduce energy consumption and costs. These actions are taking two forms for many small and mid-size firms: near-term measures and strategic changes.
The near-term measures focus on actions with immediate impact, such as turning off non-essential equipment after working hours and installing new lighting. For the IT department, this can include setting power-down policies for equipment outside the data centre or server room like personal workstations, printers and laptops.
Strategic changes are also gaining momentum among the firms surveyed. Initiatives outside of IT range from purchasing hybrid truck fleets to replacing ageing HVAC systems. Some small and mid-size firms are even considering more forward-looking changes. For example, approximately 12 per cent of firms in health care, food and hospitality have installed solar panels on their buildings or will soon do so.
Many firms focus their energy efficiency initiatives on lowering operational expenses through smarter use of energy. But behind these financial and operational goals, it also comes down to concern about the environment. Whether the policy mandates recycling or caps energy consumption, firms can achieve not only cost savings, but also improved public image and play a role in meaningful conservation.
The IT department can also play a role by disposing old equipment and assets responsibly. Whether the equipment is a personal computer, networking device or server, firms can avoid sending these devices off to the landfill.
Repurchase or buyback services can refurbish and sell off excess equipment. In many instances, old IT assets can earn credit towards future investments. For assets with no market value, these services can securely erase data and recycle the equipment components.
IT is steadily adding to the large energy cost increases that small and mid-size firms are facing. As these firms rely on more powerful IT capabilities to reach new customers, it is imperative that they also focus on how an IT infrastructure consumes energy and utilises resources.
To contend with spiralling energy costs, many firms have made or will make changes to their IT infrastructure in the coming year. Small and mid-size firms are evaluating and identifying opportunities to consolidate older, underutilised equipment. Many firms are also looking to more efficient IT investments that can assume multiple workloads to reduce energy consumption and heat production in a data centre or server room.
Concern about the environment - coupled with rising energy costs increases - are leading many firms to implement environmental policies. Nearly one out of two manufacturers, health care providers and food and hospitality providers have a policy in place today. From near-term changes like power-down policies to environmental policies for equipment disposal, firms are taking action today. In the end, 'going green' not only helps the environment, but can also help keep firms operating in the black.
Optimising computing environments of different sizes has both benefits to the bottom line and the planet.
To close, a few thoughts on steps that can help us do this effectively:
# Evaluate your server room or data centre energy demand, efficiency and capacity from an equipment and facility perspective.
# Move your hardware from a non-secure environment, such as a closet or standard office space, to avoid overheating, unprotected power and lack of overall security.
# Consolidate your workloads onto fewer machines to increase utilisation and reduce energy consumption.
# Implement capabilities to actively monitor energy usage and help better manage resources across your IT infrastructure.
# Adopt cost-effective techniques to cool your server room or data centre without adding additional air-conditioning equipment.
# Dispose of outdated or end-of-lease assets like servers and laptops through environmentally friendly IT resale or recycling programmes.
The writer is general manager, Systems and Technology Group, IBM Singapore
