How will IT manage the rising energy bills?

Many IT leaders have not been affected by soaring energy prices - yet

The corporate IT agenda could be transformed if sustained oil price increases continue, but the issue does not seem to have affected IT leaders yet.

With 89 per cent of UK businesses ignorant of the IT energy bill, 76 per cent have no set targets to reduce power consumption in that area, and only 12 per cent charge the IT department for their power bills, according to research.

Energy demands from information processing systems are rising, with suppliers such as IBM expecting a six-fold increase in server use and the volume of stored data to grow 70-fold in 10 years.

For some businesses, energy consumption has become an issue, and IT decision-makers are under pressure to drive availability and efficiency while also saving electricity costs.

Strategies such as that of transport group Go-Ahead show evidence of growing concerns with increasing electricity costs.

A single team jointly runs the IT and procurement functions of the business, and is using technology to save energy costs via projects such as diverting the energy used in train breaking to save on consumption elsewhere.

“Only 24 per cent of organisations are working towards a set energy reduction target,” said Tim Turquand, consultant at integrator Morse.

“Without a way to measure how much power the IT department is consuming, businesses trying to reduce energy usage can’t set a definite reduction target. And without a target, there is no way to tell if the steps you are taking actually work," he said.

“Setting targets, measuring against them and billing each department for their energy consumption is crucial because it increases accountability. This gives departments the incentive to become more energy-efficient.

"These must be the first steps of any organisation wanting to reduce its carbon footprint. Misunderstanding the costs of making IT more energy-efficient has held back progress.”

Chief information officers (CIOs) must question how much processing is done in the IT environment, how much data is held, and for how long, said Ovum principal analyst Graham Titterington.

“The present tendency to hold everything that it is technologically possible to hold will have to be challenged. We need systems that can store a single copy of a document and not replicate it multiple times across the organisation, without this placing complexity on users,” he said.

“If a practice is worth doing we will need to justify it by identifying balancing savings outside the realm of the datacentre.”

Read here about how the surge in oil prices is threatening IT departments. And the industry gives its warnings on the issue here.

Below, read what some IT leaders have told Computing about how skyrocketing energy prices are affecting their plans:

• The cost of utilities is only going up and anything you do to reduce costs,
  particularly in the current economic environment, has to be a good thing. Pressures from senior management to run financially viable IT are huge, mainly because of increasing utility costs and the focus on reaping the corporate social responsibility benefit. From a general facilities infrastructure perspective, there are other concerns which may come up when capacity will be an issue.

  John Bovill, chief information officer, Mosaic Fashions

• The energy spend element is included in our datacentre administrationcontracts with third parties. We do not see the power bills in particular, but we see it in the sense that their rates seem to be going up.
  
  The way we are looking at our power consumption is via a fairly traditional server consolidation exercise. Most organisations will not be running their servers at really high utilisation levels.
  
  We are moving into a virtualised world, where we will transfer more demanding applications onto VMware servers, with processors running at 100 per cent capacity. If the net effect of consolidating servers is less power consumption, then it is a great side benefit, but not the main reason for doing it.

Simon Post, chief technology officer, Carphone Warehouse

• It is not something I am particularly worried about, because we are heavily outsourced and so somewhat insulated. Is it going to drive up the margins of my outsourcing? Yes, probably, but it’s not that big a problem.

  Chris Coupland, director, BAE Systems

• We are looking at the way we are hosting our data and our datacentres’ structure anyway, so increased focus on energy efficiency will be part of that. Have we done that before? Yes, to some extent. Is there more focus on that now? Clearly, because there are more headlines about it and we understand the costs are greater.

  Richard Mintern, chief information officer, Monarch Airlines

• It is part of the overall rainbow of costs that we have to manage, but I doubt that it will drive us to do anything different. Obviously the cost to the environment, the cost of physical space and of the people who support your datacentre ­ all these things go into informing your decisions.

  Maggie Miller, chief information officer, Warner Music Group

• Making better use of energy is part of a wider business agenda and technology is a component of it.
  
  Consolidating data storage and stepping up virtualisation is part of the plan and we will use it for some of our larger, power-hungry servers. But if you have lots of power sources going in, you improve things from a technology perspective but that does not necessarily make a difference in power usage.
  

  Making a better use of energy is part of a wider business agenda and technology is part of it. It is not about what IT does on its own, but what it can actually deliver.

  As a result of our actions so far, usage of electricity has already been reduced, as well as the carbon footprint of the group. We carefully review every step that has an energy element involved – if we don’t need to do it, we will not do it.

Dave Lynch, group technology director, Go-Ahead

• I am concerned about this, but not so much in terms of keeping the IT lights on.

  Victoria Ferauge, IT director, Dassault Systemes

• Power consumption is an additional aspect to the business cases we look at when investing in new hardware. It has to use less power.

  Federico Longo, chief information officer, Deutsche Bank