IT Energy-Efficiency Efforts Pay Off, But Significant Savings Still Untapped

IT still prioritizes short-term cost savings over long-term energy reduction

CDW Corporation's second annual Energy Efficient IT Report shows that IT professionals are increasing their efforts when it comes to saving energy compared to 2008, but significant cost reductions are still left on the table. In part due to tougher economic times, energy efficiency is still not among the top drivers respondents consider when making a purchase decision.

The results are based on an online survey of 752 IT professionals in the private, government, and education sectors who are responsible for purchasing IT equipment; the survey was conducted in July.

More organizations are taking steps to improve IT energy efficiency in desktop computing. Fifty-nine percent of respondents say they are training employees to turn off equipment when they leave their offices for extended periods, up from 43 percent last year, and 46 percent have implemented (or are implementing) server virtualization (up from 35 percent in 2008). Remote monitoring and management of data centers is performed by 43 percent of organizations this year, compared with just 29 percent last year.

Last year, the report noted that over half (55 percent) of respondents wanted clear industry standards for "energy efficient equipment" for their data center. In May, the EPA released such Energy-Star labeling requirements for servers, which require use of efficient power supplies, the ability to measure real-time power use, processor utilization, and air temperature, and advanced power-management features, all spelled out in a "power and performance data sheet". That may explain why 83 percent of respondents to this year's survey say energy efficient products are becoming easier to identify. Two-thirds of respondents responsible for procuring servers are familiar with the Energy-Star qualifications and 94% of those say their organization's next server purchase is likely to be Energy-Star qualified. Overall, Energy Star-qualifying devices are being purchased by 57 percent of respondents, up from 31 percent a year ago.

The survey says efforts with desktop systems and in the data center are yielding "significant results." For example, 52 percent of organizations "actively working to reduce energy consumption have reduced IT energy costs by one percent or more."

More savings remain untapped. According to CDW, "If the average organization surveyed were to take full advantage of energy-saving measures, IT professionals estimate they could save $1.5M annually." (To put that in perspective, organizations had an average annual IT budget of $74.6M and average IT energy costs of $8.9M -- meaning energy costs could be cut by almost 17 percent.) To realize such savings, an organization would have to implement all energy-saving measures the report describes, including purchasing ENERGY STAR-qualifying devices, making full use of power management tools, managing cable placement to reduce cooling demands, and virtualizing servers and storage.

Recessionary pressures to reduce equipment costs are taking precedence over longer-term energy savings. Despite success in reducing energy consumption, cost, reliability, and compatibility with existing equipment top the factors IT professionals consider when making purchases; only 26 percent say energy efficiency is a "very important consideration," down from 34 percent last year.

“IT executives appear to be caught between the proverbial rock and a hard place,” said CDW vice president Mark Gambill, in a statement. “Under extreme budget pressure in a recessionary economy, their No. 1 IT purchasing concern is the current cost of equipment and services, which can put a damper on efforts toward lowering total cost of operations. While IT executives are trying to do the right thing -- buy the best technology with the right capabilities at the best price -- some may sacrifice greater long-term savings from reduced energy use by downgrading the importance of energy efficiency in the purchase equation.”

Just Ask

What makes for a successful energy-efficiency effort? CDW says 57 percent of organizations that ask IT to reduce its energy costs have reduced IT energy costs by at least 1 percent versus 39 percent of organizations that do not ask this of IT. Moreover, 60 percent of organizations that assign an IT member to advocate for and monitor energy efficiency have defined programs to manage and reduce energy use, versus 24 percent for all others.

Energy efficiency may also be hindered by a lack of information. CDW says many organizations exclude IT from its energy management discussions. Under half (47 percent) of organizations have an employee in IT "who receives reports, authorizes payment, or otherwise has responsibility for the amount and cost of energy used in their IT operations." The report asks, "How can IT manage its energy bill if it doesn't know what it is?"

Top-level organizational support for energy-saving efforts is also lacking. Only 44 percent of respondents say their department has incentives to improve, including incorporating results of such programs into performance appraisals. It's paying off: 58 percent of respondents in organizations with IT incentives say power consumption is a priority; only 30 percent in organizations without such incentives say power consumption is a priority.

“IT executives appear to be caught between the proverbial rock and a hard place,” said CDW vice president Mark Gambill, in a statement. “Under extreme budget pressure in a recessionary economy, their No. 1 IT purchasing concern is the current cost of equipment and services, which can put a damper on efforts toward lowering total cost of operations. While IT executives are trying to do the right thing -- buy the best technology with the right capabilities at the best price -- some may sacrifice greater long-term savings from reduced energy use by downgrading the importance of energy efficiency in the purchase equation.”

“Unfortunately, organizational leadership sometimes overlooks relatively straightforward ways to increase energy efficiency,” Gambill said. “Simply asking the IT department to reduce its energy costs yields hard dollar savings. And incenting the IT department to reduce energy use – whether with financial, performance or other rewards – helps prioritize energy efficiency efforts.”

A copy of the complete CDW Energy Efficient IT Report is available at http://www.cdw.com/energyefficientIT (registration required).

About the Author

James E. Powell is the former editorial director of Enterprise Strategies (esj.com).