The green sensibility has been on the march for many years, but
as far as the IT industry has been concerned the debate has focused
mainly on the concept of the
green datacentre. But increasingly attention is shifting to the
role of the software industry in enabling green-savvy organisations
to put their own houses in order.
Some cynics have suggested that the global economic crisis has
re-focused corporate attention onto short term survival rather than
long term global sustainability. But a recent announcement by
WalMart, the world's largest retailer, has blown open the market
for green software applications and tools.
Walmart is launching a Sustainability Index to disclose the
environmental impact of the products it sells. To that end, it will
demand that its 100,000 suppliers and partners track the carbon
emissions and water use of their goods. In other words, if you want
to do business with WalMart, you'll need to provide environmental
impact data. That will oblige WalMart to invest in applications and
tools to produce this data, and in the process open up a huge
global commercial opportunity for the software industry.
"We want to spur the development of a common database that will
allow the consortium to collect and analyse the knowledge of the
global supply chain," explains Mike Duke, CEO of WalMart. "The
ultimate step of the Index is to translate the information stored
in the database into a simple tool that informs consumers about the
sustainability of products. This will provide customers with the
transparency into the quality and history of products that they
don't have today. It will help put them in control and consume in a
more sustainable way.
"The Index will drive higher quality and lower costs. It will
mean more innovative products that lower carbon output, that
promote clean air and water and that create a more transparent and
responsible supply chain," he adds."Walmart has provided the
initial funding for this Sustainability Index and we invite all
retailers and suppliers to contribute. We will also partner with
one or more leading technology companies to create an open platform
that will power the Index."
There are already examples of firms such as SAS Institute
positioning their software as an enabling technology for
organisations to support their own sustainability drives.
One such organisation is the University of North Carolina (UNC)
which aims to cut all net greenhouse gas emissions by 2050. With
that goal established by the Chancellor, the immediate challenge
became understanding what the current situation was. The man
charged with coming to terms with this was Daniel Arneman, who had
just received his PhD in physiology. He says: "This new challenge
lets me rediscover my passion for environmental stewardship and
sustainability."
The UNC community is made up of 28,567 students, 3,450 faculty
and 8,632 staff. It is sited on 729 acres with 17.5 million square
feet of built environment. It also has expansion plans. To analyse
this vast estate, the University used JMP statistical discovery
software from SAS in order to be able to visualise five or six
years of greenhouse gas data and manipulate it.
"It allows me to really explore the data, and if I'm curious
about a certain pattern or question, I can ask that question of
myself pretty quickly. Things just become more immediately
obvious," says Arneman."We use the SAS software pretty widely for a
range of things. We are able to connect it to our databases used to
track greenhouse gas emissions. We can also use it to connect to
our database of buildings energy use. It's a vast amount of data.
What do you do with a million rows of data?
"The Chancellor had signed a commitment before we had any sense
of how large an issue it was. We needed to establish our greenhouse
gas inventory and what the sources of greenhouse gas were. What we
found was the emissions were 5,000 metric tons per year. That's a
lot compared to other universities. We have a lot of work to do to
achieve zero."
But while such software can be turned to useful ends, there are
green-specific capabilities that a user such as UNC still seeks
from suppliers. "Software firms can offer organisations a window
into their energy consumption. But I'm still looking for the piece
of software that shows not only great analytical ability, but also
understanding," suggests Arneman. "You can produce dashboards and
3D models, but at the end of they day will this help organisations
to understand why and where the carbon emissions are occurring.
What I see at the moment is a lot of flashy dashboards.
"I am interested in modelling building energy use. If you could
predict how much heat the buildings would need in a single day it
would help with our infrastructure planning," he adds. "Flexibility
is important. Every organisation's needs will be different. If
you're going to measure your natural gas usage in therms or in
cubic feet, then you need software to do both. Most organisations
probably don't even have one person dedicated to carbon accounts so
ease of use and flexibility is important."
That's quite of an issue for software firms, reckons Mikko
Valtonenm, managing director of sustainability management
specialist firm 2future, an Oracle partner. "Who buys this sort of
software? We struggle with this every day," he says. "It's not
always the CIO's office. One of our clients has its own
sustainability director who has a budget of her own. A lot of
companies increasingly have a sustainability office run by
executives, but they sit underneath someone else."
But it's clear that there is a market for green software, driven
both by legislative demand and desire to clean up their act by
companies. "We are seeing bigger companies like SAP coming into
this space," says Valtonenm, who argues that green capabilities are
a good selling point. "Everyone wants to buy from a 'good' company.
No-one wants to buy from companies which are destroying the rain
forest. Software firms are able to help track your own
capabilities."
That said, it's important for customers to look at what they're
getting when they buy green software. "What is important is not so
much the technology but the experience and knowing how to combine
that with sustainability practices," he says. "People get excited
about carbon footprints, but sustainability is about so much more
than carbon. It really doesn't make sense for companies to buy
solutions that are only about carbon. That market will not be about
standalone software for energy or carbon or water, but a wider
overall holistic approach. To that extent, the likes of Oracle and
SAP can be major players."
For its part, SAP has been making all the right noises - and
putting its Euros where its corporate mouth is. SAP's customers,
according to SAP, produce 1/6 of the world's carbon emissions. In
March, SAP announced plans to reduce its greenhouse gas emissions
down to its year-2000 levels by the year 2020, a 49% reduction from
its 2007 baseline measurement. As of May, it could say that it had
reduced its total corporate carbon footprint by 6.7% in 2008
compared to 2007.
SAP's goal, as articulated by incoming CEO Leo Apotheker, is to
make every relevant business process sustainable. To that end, he
has appointed Peter Graf as its first sustainability officer and,
perhaps more significantly, as the head of its new Sustainability
Solutions business division. This in turn followed the acquisition
of carbon management software specialists Clear Standards.
Graf insists he has a clear idea of what customers need from
green software. "Most companies have preliminary sustainability
initiatives under way, but customers, employees, governments and
shareholders continue to ask for greater transparency," he
suggests. "Moving from a series of ad-hoc activities and a maze of
reporting frameworks to a co-ordinated, transparent and auditable
sustainability strategy. Executives need a single solution to
holistically manage environmental, social and economic risks and
opportunities.
"They need to increase profitability while enabling
sustainability reporting that provides auditable and assured
reporting for both regulatory and voluntary KPIs and benchmarking
and analytics that can compare internal and external data and
support what-if analysis and projections."
But even as the traditional software firms get their green
policies and product development in place, an alternative
proposition is being touted by the Software as a Service (SaaS)
vendors. According to research conducted by consultancy Greenspace,
commissioned by SaaS firm NetSuite, the average NetSuite customer
saves more than $61 million in energy bills per year through shared
datacentre resources, savings which translate to nearly 595 million
kilowatt-hours (kWh) annually or the equivalent of nearly 423,000
metric tons of carbon dioxide per year.
Perhaps then the answer lies not with software itself, but with
its deployment method.