The New IT Competitive Edge: Sustainability

Rob McKernan is Senior Vice President, Americas Region of Schneider Electric’s IT Business; a role in which he ensures the North and South America regions remain focused on customers and partners.

Rob-McKernan-smROB McKERNAN
Schneider Electric

Tech giants such as Google, Facebook, Microsoft and Amazon continually engage in intense battles for market share. And factors fueling these most visible battles include branding, customer acquisition, new products and the like, though these are just the tip of the iceberg.

A less visible but arguably more intensive battle is enabling tech supremacy – how these companies gain and maintain a competitive advantage in the data center. Increasingly, these larger data centers are needed for the horsepower required by big data, and the intensive processing created by today’s connected world. According to IDC (International Data Corporation), the volume of digital content is expected to grow to 2.7 zettabytes (ZB), up 48 percent from 2011. However, these companies face a true dilemma: How will they sustainably and continually power ever-larger data centers, without cutting into budgets for more strategic activities, and in the face of increased public scrutiny?

An example of the increased scrutiny around data center energy consumption were the Greenpeace protests against Amazon and Microsoft earlier this year, drawing attention towards carbon-emitting facilities. Built to accommodate the processing needs for the plethora of music, photos, social networks, maps, and other connected applications that now pervade nearly every single aspect of our daily tasks, these new data centers support a tremendously expansive virtual cloud with just as expansive energy needs. And despite attempts to operate these centers quietly, there is much room for improvement.

Companies have tried to build these energy-intensive facilities in inexpensive regions of the United States (such as Apple’s facility in Maiden, North Carolina), drawing from the cheapest power sources in the area. Unfortunately, the cheapest sources of energy today tend to be carbon-emitting fossil fuels. The resulting “dirty” cloud has led not only to uproars from environmentalists, but also to mainstream consumer demands that tech companies clean up their act.

At the heart of this issue is a disruption in the data center energy market. In the past, data centers did not need much energy, and the energy they did use (such as coal) was cheap, plentiful, and widely accepted and embraced. Our world’s explosion of technology, compounded with uncertainties around our energy future and deep concerns about our already changing climate, have changed this scenario drastically.

This means the IT industry must adapt. Although companies such as Apple have pledged to transition to 100 percent of their power supplies coming from renewable sources over the next few years, there’s the challenge that we do not yet have the infrastructure or the development of a readily-available, cost-effective renewable energy source.

While this goal is certainly commendable, it must be done intelligently – with considerations to both energy supply and demand – to avoid negative bottom line impact, supply crises, and/or costs absorbed by consumers. And it’s important to keep in mind that there are a myriad of technology companies and cloud service providers that do not have the resources to build on-site solar arrays or engineer complex geothermal systems.

Aside from the need to meet societal demand, sustainability’s benefit is more than just an ability to comply with environmental pressures. Sustainable practices bring tremendous advantages to a business by improving operations, slashing consumption costs, increasing employee satisfaction, and adding value to a company’s end product.

Comprehensive sustainability is available today, and able to securely power us into the future – whether or not reliable, affordable renewable energy ever comes to fruition. Sustainability service providers can assist data centers with a wide range of sustainability solutions including strategic planning, technology, and implementation. A thorough sustainability plan will not only allow data centers to operate more efficiently, it also allows companies to successfully meet any set internal or external sustainability goals. While a successful sustainability practice can greatly improve a company’s operations and help uncover hidden economic savings, to effectively counter costs, we need to address the energy supply and demand dilemmas which have emerged from volatile energy costs, uncertainty around our energy security, and an exponentially rising demand for energy from our booming and technology-dependent population.

Successful sustainability requires a consideration of all sides of the energy equation: from the intelligent procurement of clean and affordable energy to the installation of energy efficient and reliable technologies that enable every watt sourced into data centers to be used to their fullest potential. We’ll explore a few different strategies on both sides of this equation, as well as the connecting collaboration pulling total sustainability together:

Supply Side

Especially in deregulated power markets, determining the provider that offers the most sustainable and competitively-priced energy is a challenging endeavor. In addition to sometimes untrue sustainability claims from local generators and utilities, data centers are faced with continual volatility in energy prices.

Depending on availability and consumer demand, the most cost-effective energy supply option can change at any minute – especially with renewable sources. For example, a drought and subsequent low water levels can drive prices up for a utility sourcing a good chunk of its energy from hydro power – while a flash flood in the same area can send rates falling at lightning speed.

Simply put – it’s no longer enough for companies to issue a request for a proposal, and then choose what may appear to be the best price. By taking a more calculated and strategic approach to energy procurement, data centers can reduce their exposure to price volatility and secure energy that meets both budgets and business objectives. While the significant time and resources required for this approach hasn’t always been feasible, it is getting easier.

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One Comment

  1. Scott

    Can we define "sustainability" before using the word 17 times in the article? It seems that reducing costs and using energy efficiently is the sole criteria for "sustainability" in Schneider's eyes -- neither are bad strategies, but they're hardly sufficient to claim the mantle of "sustainability." Reminiscent of Monsanto using the word to defend industrial agriculture by pointing to marginal improvements in yield. It would be great to know how demand response, which is great for load shedding and load shifting, can ever reduce carbon emissions by 50% in the next two decades when electricity contributes just 25% to the mix of human-made greenhouse gases. Even if just talking about the electricity sector, this is an outsized claim presented with no context -- what's the analysis behind this claim?