Tech Execs See Green Profits at Work and Home

May 22, 2008

CIO Update Staff

Technologies that help businesses use power more efficiently should become a bigger money-maker in the next decade, even if surging demand for data means overall energy use in the tech sector will still rise.


Executives at the Reuters Global Technology, Media and Telecoms Summit this week said businesses often see saving money as a way to help reduce their environmental impact by cutting waste, particularly of power.


IBM, for example, consults with customers on how to streamline power use in their data centers, sometimes even forestalling the need to build new facilities.


"In the fourth quarter we did $300 million worth of business signings in green data centers," IBM Chief Financial Officer Mark Loughridge said, referring to deals to develop computer operations that consume less power.


"There's going to be more demand," he said.


EMC Corp has introduced data storage systems that use less power by spinning down disk drives when they aren't being used, for instance.


"We are trying to help customers manage that growth," EMC CFO David Goulden said. "They equate green to energy costs and energy being one of the biggest drivers of data center costs."


With data use growing at about 60% annually, total energy use will rise from the technology sector, executives predicted. But companies will find ways to reduce individual consumption.


"If you look at power consumed per employee, I absolutely expect that we will consume less power because we are driving things like server consolidation," Symantec Corp Chief Operating Officer Enrique Salem said.


One major form of server consolidation is the push to use software to let a single computer do the work of many machines, a process known as virtualization, which also saves energy.


The Power of Denmark


VMware Inc expects 50% revenue growth this year, riding on a wave of virtualization.


It works with utilities in California to get rebates for its customers who markedly cut data center power consumption, and expects as many as 20 more to join in North America.


"We estimate something like 6 million servers have been virtualized since we started with VMware," CEO Diane Greene said. "We've saved approximately the ... power that Denmark uses in a year."


Applied Materials Inc sees growth in its business for coating glass with a film that helps insulate large office buildings, reducing both cooling and heating costs.


"When there is a building boom in Dubai or Shanghai or Beijing or Mumbai, glass companies in those areas start to buy our machines," Applied Materials CEO Mike Splinter said.


Corporate Green, Personal Green


While corporate customers see an immediate financial benefit to reducing power use, the average consumer may not be ready to relinquish the shiny wrappings of technology.


For example, Virgin Mobile USA Inc tried to deliver cell phones in a recycled paper carton.


"We found that consumers walked away from it because they thought the phone was cheap as a result of the packaging," Virgin Mobile USA CEO Dan Schulman said.


But Fujitsu Executive Vice President Chiaki Ito said consumers should find it easier to make simple, green choices.


"For instance, now many people use cell phones as a substitute for a PC to check (email). This reduces the consumption of energy," he said.


Many executives at the summit said they are improving their personal habits when it comes to environmental impact. Some, like VMware's Greene, occasionally ride their bikes to work.


Applied Materials's Splinter says he recently changed all 150 light bulbs at home to the compact fluorescent variety. Nokia CFO Rick Simonson said one of his daughters decided to become a vegan recently.


But Bill Watkins, CEO of Seagate, sees his biggest task as finding a way for his company to properly dispose of the storage drives it builds.


"I get on a private jet and fly to New York, so it's kind of hard for me to talk about separating my cans from plastic," he said.


"They actually wanted me to convert to a full electric car," he said. "I drive a Bentley. This is the car of my life ... I'll be honest, I couldn't do it."


(Reporting by Michele Gershberg. Additional reporting by Saumyadeb Chakrabarty; Editing by Braden Reddall)


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