The business case for sustainable IT: revenue growth and efficiency
Walk into any corporate boardroom today, and you’ll likely pick up on a common thread: how best to drive IT sustainability forward, especially when considering an organization’s environmental, social and governance responsibilities.
IT sustainability — using technology in an environmentally and socially responsible manner — is projected to continue growing over the coming years. Gartner Inc. predicts that by 2025, 50% of CIOs will have performance metrics tied to the sustainability of IT organizations. It defines IT sustainability as the “framework” of digital solutions that drives ESG outcomes.
What’s becoming clear as a trend is that the adoption of IT sustainability practices — including the use of the supercloud as an enabler — has the potential to reduce costs and improve infrastructure within corporations while also strengthening partnerships and driving revenue growth.
This feature is part of SiliconANGLE Media’s ongoing series exploring the latest hardware developments from Hewlett Packard Enterprise Co. as it responds to shifting enterprise cloud models.
There’s a whole range of ways that organizations can put this into play, whether that’s through reducing energy consumption and carbon emissions or minimizing the environmental impact of technology operations. Take the use of artificial intelligence — technology that poses problems and solutions tied to climate change. Leaders have begun speculating about how to effectively use AI to advance ESG goals. As consensus builds around the importance of getting such a strategy in place, so do innovative ways of capitalizing on that momentum.
Another development worth considering in an organization is strategic partnerships, which can help firms accelerate their IT sustainability goals. One such collaboration exists between Hewlett Packard Enterprise Co. and Advanced Micro Devices Inc.
HPE, for example, has set goals to achieve net-zero greenhouse gas emissions across the value chain by 2040. AMD, meanwhile, is aiming to achieve a 30-times increase in energy efficiency for its processors and accelerators powering servers for AI training and high-performance computing by 2025. With those goals in mind, the two companies have sought to speed up progress through forming a strategic partnership.
Emerging out of that partnership has been the Frontier supercomputer, which AMD and HPE count as one of their recent highlights. It’s been named the first machine to break the exascale barrier (a threshold of a billion calculations per second) but is also ranked number one as the world’s most energy-efficient supercomputer. It is so powerful that it operates faster than the next seven best supercomputers combined and more than twice as well as the number two machine.
“It shows kind of the pinnacle of what can be possible for other data centers looking to modernize and scale,” said John Frey, chief technologist for sustainable transformation at HPE, in a conversation with theCUBE.
There’s also the LUMI Supercomputer, ranked third on the Top500 list of the world’s fastest supercomputers as of 2022. HPE built LUMI with chips from AMD’s Epyc line of central processing units and Instinct line of graphics cards.
“The LUMI system … is 100% powered by renewable energy,” Justin Murrill, director of corporate responsibility at AMD, told theCUBE in 2022. “Not only that, it takes the heat and channels it to a nearby town and covers 20% of that town’s heating needs, thereby avoiding 12,400 metric tons of carbon emissions.”
Of course, all of this must support an enterprise’s IT sustainability goals. Tracking how those goals cascade down an enterprise’s supply chain is essential — and when it comes to HPE and its aggressive product energy efficiency goals, AMD stepped in to help.
“We critique each other’s programs, we push each other, but we work together,” HPE’s Frey said. “The other thing that’s really critical is no one company is going to solve these challenges ourselves. So one of the things I love about our partnership with AMD is we look at each other’s sustainability goals before we launch them.”
Those goals are spelled out in HPE’s Supply Chain Social and Environmental Responsibility Policy, for example. “We share a responsibility with our suppliers to protect workers, communities and the environment,” according to the document, which lays out the company’s standards for legal and regulatory compliance and environmental performance improvement, among other areas.
HPE regularly audits its suppliers to make certain certifications are accurate. AMD has a similar program. Both companies pass these goals on to their suppliers, such as Taiwan Semiconductor Manufacturing Company Ltd., a major AMD supplier.
The business case for IT sustainability
Chief executive officers have placed environmental sustainability among their top 10 business priorities for the first time ever, according to a recent Gartner study.
“As business leaders feel the pressure from key stakeholders to do more on environmental sustainability, they are now treating the needed changes as opportunities to drive business efficiency and revenue growth,” said Autumn Stanish, principal analyst at Gartner.
Such a result and the firm’s internal projections signal that sustainable IT isn’t a buzzword: Indeed, a business case is involved. That business case takes place just within data center walls, for example, Frey pointed out.
“There’s inefficiencies that are inherent in many of these data centers,” he stated. “There’s really low utilization levels as well. And by reducing over-provisioning and increasing utilization, there’s real money to be saved in terms of equipment costs, maintenance agreement costs and software licensing costs.”
These areas have a clear impact on an enterprise’s value as well. HPE commissioned International Data Corp. to survey 500 senior IT executives on IT sustainability. The results turned up that executives do it to attract and retain institutional investors, according to Frey. For example, when Tesla Inc. was dropped from the S&P 500 ESG Index because its ESG score had dropped into the bottom 25% of the Index, its stock price declined by 16% the next day.
While institutional investors’ values are an important driver of the business case for IT sustainability, customers are even more important — many of whom may have felt as though carbon goals, historically, have been vaguely defined.
“They’re asking for specificity; they’re asking for transparency,” Frey said, citing an IDC study that found that companies used their sustainability programs to attract and retain employees. “They recognize the data scientists, the computer science, computer engineering students that they’re trying to attract want to work at a company where they can see how what they do directly contributes to purpose.”
Supercloud as an enabler of IT sustainability
Beyond strategic partnerships and artificial intelligence, other emerging trends are being implemented as businesses seek to enhance their ESG goals. Supercloud, for example, is a new trend rapidly defining the enterprise computing landscape and is among those technologies that should be factored into any conversations surrounding sustainable enterprise IT.
Also called the “meta cloud,” “cross-cloud” and “poly cloud,” the rise of superclouds — clouds built on top of hyperscale infrastructure — is focused not only on IT transformation, but “deeper business integration and digital transformation of entire industries,” as industry analyst Dave Vellante puts it.
A supercloud user can use different services from multiple clouds without needing to be an expert in how those clouds work. The cornerstone of supercloud is the ability to abstract the complexity of cloud-specific computing, storage and security services into one common architecture.
Users can choose where to run specific workloads, such as analytics, converged databases and network routing, which allows an enterprise to choose the optimum cloud provider that can deliver on the enterprise’s sustainability goals. Cascading sustainability goals throughout the supply chain is an important aspect of IT sustainability.
Charting a path ahead on IT sustainability
There’s no question that there’s been a sea change regarding the value organizations have placed on IT sustainability. Take the Gartner study cited above, which saw CEOs placing environmental sustainability among their top 10 strategic business priorities. That goal ranked 14th in 2019 and 20th in 2015.
Among companies seeking strategic partnerships, there’s also been measurable progress. HPE reduced its Scope 1 and 2 greenhouse gas emissions by 62% between 2016 and 2020, while AMD targets carbon neutrality by 2024 and net-zero carbon emissions by 2050. Both companies cite their strategic partnership as being critical to achieving those goals.
The consensus around the importance of pursuing a sustainable IT strategy is almost certain to increase in the coming years, especially in the face of serious warnings on climate from the United Nations. Whether through artificial intelligence, supercloud or strategic partnerships, innovative ways to drive the field forward are sure to follow.
Image: patpitchaya / Getty Images
A message from John Furrier, co-founder of SiliconANGLE:
Your vote of support is important to us and it helps us keep the content FREE.
One click below supports our mission to provide free, deep, and relevant content.
Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.