Green, by its very nature, is not a colour that sits well with industry – much less the IT industry – and yet despite the disparities, green suddenly seems to have become technology’s new black.
The industry should have seen it coming. Environmental issues are gaining serious commercial momentum and, fuelled by the growing number of local and global green initiatives, they are rising ever more insistently up the corporate agenda.
The Carbon Lobby, Waste Electrical and Electronics Equipment (WEEE), Restriction of the use of certain Hazardous Substances (RoHS), the Kyoto Protocol, daily headlines about global warming and the promise of wide-ranging and punitive enviro-taxations have all had an impact.
Then, in October, came perhaps the highest profile and weightiest green driver yet – the 700-page report from former World Bank chief economist Sir Nicholas Stern. It argued that global warming could cause a 20 per cent collapse in world gross domestic product – 20 times more than it would cost to put measures in place now to prevent it.
Perhaps because of its source – a respected economist – and perhaps because it painted the impact of global warming in true terms of pounds and pence, it has grabbed headlines and corporate attention all over the world.
As such, it also marks an important watershed, especially for the channel, according to Mike Dinsdale, communications director at Brother UK, and a member of the All Party Parliamentary Climate Change and Environment Groups.
“Green issues have been growing steadily in importance across the channel but – as something that calls forcibly for businesses to put their houses in order – the Stern report marks a major turning point,” he said.
A number of analysts agreed. Many have issued warnings about IT power consumption and forecast an upturn in the adoption of green technologies in the wake of the report.
Analyst Gartner, for example, had predicted that while energy expenditure currently accounts for about 10 per cent of the average IT budget, this could rise to more than 50 per cent over the next few years.
Ovum analyst Mike Davis thinks businesses will take steps to avoid this financial pain, employing a variety of means to try to limit their carbon footprints. These might include enhancing hardware energy efficiency via upgrades and virtualisation; redesigning their data-centres to optimise factors such as air conditioning; and deploying location-independent technologies such as web and videoconferencing.
So should resellers be thinking green? It looks that way. However, uptake seems likely to happen incrementally rather than en masse, with companies getting greener only as specific legislations come into force.
Richard Hughes-Rowlands, product manager EMEA at Zebra Technologies, argued that by far the most immediate impact for the channel will be in recycling as the WEEE directive obligates producers, distributors and resellers to return old goods to source.
“Sorting and returning products to their original manufacturers through the channels via which they were initially purchased will be a difficult and time-consuming process,” he said. “So the opportunity exists for additional channel services, and potentially revenue, by taking back products and pro-perly recycling them. [But] WEEE is only the first step to green computing; the size and scope of product recycling will continue to grow.”
RoHS is beginning to enjoy similar traction, according to Sofia Dahlqvist, dealer channel marketing manager at Ricoh, citing resellers and direct sales feedback that shows RoHS compliance as a major selling point over the past year.
“While resellers rarely ask about every, minute detail of RoHS, they are seeking reassurance that products are RoHS compliant,” she said. “Even when the RoHS dates were still being finalised, resellers were pushing compliant products as they didn’t want customers having to replace kit once the legislation came into force.”
So, with end-user companies increasingly compliance aware and reams of new legislation in the pipeline, all resellers surely need do is open their doors and wait for the orders to flood in?
Well, not quite. Far from jumping onto the environmental bandwagon, it seems that most businesses still see the bottom line as, well, their bottom line; the green they’re most interested in, for the time being at least, is still the kind with the Queen’s head on one side and an indeterminate historical figure on the other.
“The simple fact is that green does not sell on its own,” said Clive Longbottom, services director at Quocirca. “However, when you start looking at the data-centre power consumption equation, the whole thing becomes a much bigger, more immediate issue.”
For instance, in the past there was no real answer to the question of processor power usage. It just was not something the manufacturers were focused on.
“Now though, Intel and AMD have realised it’s not just about clock speeds and have started taking this issue much more seriously,” he added.
“With Intel and AMD now battling away for territory, the channel needs be looking carefully at this market; not as a matter of greenness for greenness sake, but as a genuine business driver.”
No surprises there. After all, successful business strategies are rarely built on a companies’ social conscience or sense of moral outrage. The reality is that, unless forced by government legislation (and by taxation in particular) or by another immediate, tangible financial incentive, companies will continue to make green a secondary consideration.
Bill Clifford, chief executive of data-centre management software manufacturer, Aperture, agreed.
“While companies are becoming more aware of their carbon footprints, most changes in the data-centre are still driven by cost,” he said. “Power is expensive, and the drive to consume less of it is based on reducing cost, not reducing carbon emissions.”
Ironically, this may be where the best longer term opportunities lie for the channel. The side effect of reducing the power, the number of drives and the number of servers employed in a data-centre is that it costs less. This, suggested Clifford, is compelling many chief information officers to take a more holistic view and opening up a range of opportunities for the greener, savvier reseller.
“Businesses can’t manage what they can’t measure, so there’s an opportunity for the channel in helping data-centres identify those metrics; in helping them to reduce power consumption by matching business needs to data-centre operations.”
Aperture recently released Vista 500, the latest version of its data-centre visualisation and planning solution. Software-based, with a database of 30,000 data-centre components from blade servers to power generators, it displays appropriate heat, power and space consumption superimposed on the blueprint of the datacentre. This enables the management of the hardware at the physical layer, allowing staff to, for example, spread heat generation across an entire floor rather than having it concentrated in, say, a single corner.
The ability to manage power at this fundamental level, said Clifford, is a crucial consideration for customers (and resellers) that want to get green and save money.
“A business’s power consumption and carbon footprint are all in the physical layer (layer 0), so green improvements can only be realised by involving facilities management,” he said. “As such, the channel needs to look beyond the IT department and help companies draw IT and facilities together. They can then reap the benefits by selling in any missing components or by selling additional redundant servers/equipment where a single point failure has been identified.”
Julian Box, managing director of virtualisation specialist systems integrator VirtualizeIT, agreed.
“The most important part of qualifying how green a project is comes from knowing how much energy is being used in the first place,” he said. “Many customers are often still oblivious to the potential savings because they don’t know how much they are spending on energy bills. Developing projects with long-term green benefits alongside other potential cost savings is a good consultancy opportunity for the future.”
Ironically then, the easiest way for VARs to give their customers a green footprint may well be by giving them exactly the fast, agile resilience that they need at a commercial level.
This, suggested Dinsdale, could drive a number of good longer-term markets for resellers, especially those who take the time to truly understand the appropriate green technologies and their appropriate target markets. For example, those operating in the public sector.
“We will see central government driving more and better green technology through procurement policies that prioritise energy-efficient, recyclable products,” he said.
“Our own research shows that there is already a sizeable opportunity to sell green products to the public sector. In a recent survey of local government procurement offices, 88 per cent said that sustainability was a consideration, while 76 per cent thought it should be mandatory.”
Many of those surveyed were already working to environmental procurement codes and in some cases had authorised additional expenditure for sustainable products.
Dinsdale predicts a similar increase in green procurement in the private sector “as companies realise it can be a quick route to improving their CSR [corporate and social responsibility] credentials with shareholders”.
This may, however, have a more pronounced impact in some reaches of the channel than others. Tony Hitchens, head of marketing at legacy cloning software specialist Erudine, has for instance seen a marked rise in the demand for environmentally-friendly systems integrators as the ability to reduce hardware begins to gain appeal.
“Replacing legacy systems with cloned versions allows organisations to move from cumbersome mainframes onto commodity hardware and enables the eradication of bugs that, until now, have been too complex or expensive to remove,” Hitchens said. “This provides fresh product and service opportunities for systems integrators and VARs. In terms of reseller margins, it’s an entirely new approach and we envisage the channel taking it very seriously.”
But will end-users take it seriously, though?
Richard Garsthagen, technical marketing manager at VMware, said that in order to convince their customers, resellers must approach them with a very clear message: “The overall theme that channel partners need to stress is that being ‘green’ is not more expensive – it’s about using the right level of technology to meet demand,” he said. “Take virtualisation, for example. It’s a more efficient use of IT resources, but it’s also greener because it uses less physical hardware – not just servers, but networking equipment, uninterruptible power supply systems, even cabling. The channel already has a pretty good understanding of the benefits of server consolidation from a cost perspective, but the environmental impact is also a sound reason to invest.”
Of course, being ‘green’ isn’t the IT department’s end game, admitted Garsthagen, but he insisted that putting a green tinged approach in place will yield both the cost benefits customers crave and a more efficient data-centre in the long term.
The lesson? Educating the customer remains key in opening up longer-term opportunities.
Tom Kelly, managing director of VAR Logicalis UK, takes a similar view. “We’re entering a time when organisations that are seen to be green are more attractive to business partners, consumers and stakeholders of all kinds,” he said. “And yet it’s only relatively recently that IT – one of the greatest consumers of energy within a business – has been singled out for attention.
“The commercial reality is that while the majority of businesses are keen to be seen as green, they’ve rarely thought through the budgetary implications. As such, IT managers too often find themselves tasked with reducing their company’s carbon footprint, but with no extra finances or resources available to do so.”
This will drive three key areas of channel opportunity, said Kelly – technology virtualisation, consolidation and presence.
“Virtualisation is big business for resellers, and when you consider the environmental benefits it becomes even more compelling – particularly with many Intel/AMD-based servers functioning at only 10 per cent capacity or less. Virtualisation means less equipment, less cost, less power and less carbon emissions.
“Then, in terms of presence, forward-thinking companies will soon begin harnessing changes in social and working practices to drive business agility, and simultaneously improve their green credentials. This is another opportunity for the channel.”
In fact, it’s merely a logical extension of the existing virtualisation argument, said Box.
“Virtualisation has always been about reducing costs, but given how much attention is now being paid to energy efficiency, these costs are now being broken out within the project rather than included with any other cost savings as they have previously,” he said.
Jon Toor, vice-president of marketing at ONStor, stressed that resellers must not fall into the trap of thinking that less hardware means less margin.
“It may seem counter-intuitive to say that a more efficient solution – where the customer actually needs to buy less – will result in more revenue,” he said. “But it really is the case. Resellers differentiate by finding and implementing better solutions.
“Anybody can implement the obvious, but a great reseller will work hard to find the solution that will save his client time and money. The customer will respond by doing more business with that reseller. Many of the largest IT vendors have built businesses on saving money for the customer. Resellers can do the same. And the best margins will be in the most differentiated solutions,” Toor said.
All IT users must manage storage growth, Toor added. The reseller’s opportunity depends on the customer’s constraints on that growth.
“If he’s out of room, a more space-efficient solution may allow him to expand without growing his footprint. If he’s maxed-out on power or air conditioning, a more power-efficient solution lets him grow while saving power. If it’s a headcount limitation he’ll need to manage more data without adding administrators. Each is an opportunity for the reseller to add value by offering a solution that lets the customer accommodate growth without busting through his particular constraint.”
Another important point for resellers to remember, said Chris Grant, director of Data Centre Services at Colt, is that although current regulations call for low carbon initiatives on IT hardware, it will only be a matter of time before regulatory issues start impacting services as well.
“Savvy resellers should therefore look beyond sales and marketing to the technical aspects of distribution and integrate other carbon saving initiatives – such as data-centre services – into their low-carbon portfolios.”
The only downside is in the time required, said Toor.
“It may be necessary to learn new technologies and perhaps establish relationships with new vendors,” he said. “But the time investment will reap rewards. You’ll have more options to solve your customer’s problems and more likelihood that he will buy from you rather than your competitor.”
However, Kelly warned against seeing green as a chance to squeeze the customer for more budget than they really have. “Resellers looking to build a business around green IT must do so by integrating it into a company’s core IT strategy: treating it as part of the same budget, rather than as an opportunity to win more,” he said.
“We can’t re-cork the genie. IT systems are essential. But resellers will never be able to help companies adopt more environmentally friendly working practices unless they first take time to understand where and how each company consumes its energy. How can you improve something if you don’t know what it is you’re improving? Assessment and benchmarking are therefore the first steps any customer should expect from a reseller.”
Ultimately then, the argument boils down to an all too familiar one. Green, black, blue, red or yellow, no reseller whose strategy amounts to pushing tin down the throats of its clients will last very long these days.
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