growth

savings

stewardship

Energy efficiency in the data center: The time is right.

For internal IBM use only—not for client distribution

2 For internal IBM use only—not for client distribution

Green IT. What value can we deliver?IBM has established a leadership position, and we can help our clients take action today

Green IT is about energy efficiency

In a data center:

Energy efficiency enables IT capacity growth to meet •business demands by conserving energy and over-coming rising energy costs to power servers, storage devices and other data center equipment. Green

means ROI.

Energy efficiency has a direct impact on operational •costs because the energy saved in the data center can be put to more productive use on IT projects or toward the bottom line. Green means savings.

Energy efficiency supports an organization’s competi-•tiveness and marketable brand image during tough economic conditions by helping to conserve resources and do more with less. Green means competitiveness.

Energy efficiency is a global issue that has significant impact on our clients’ businesses today—and will have an even greater impact in the future. Gartner listed Green IT as one of the top ten strategic technologies for 2009. Gartner said, “Strategic technologies affect, run, grow and transform the business initiatives of an organization. Com-panies should look at these 10 opportunities and evaluate where these technologies can add value to their business services and solutions, as well as develop a process for detecting and evaluating the business value of new tech-nologies as they enter the market.”1

“IBM, recognized as the leading Green IT company in our first Top Green-IT Computing issue, has taken a

serious look at how they impact the environment and how they can address those challenges with good

business sense, through their Project Big Green initiative and a company-wide focus on energy efficient

technology and services, according to a respected industry publication.” 2

—IBM prESS rElEaSE

3 For internal IBM use only—not for client distribution

The need is immediate Three principal changes have occurred over the past five years that have driven data center energy efficiency to the forefront.

Demand for IT energy efficiency is increasing

First, changes in the global business environment —especially the economic downturn—are placing higher demands on the efficient use of energy in the data center and throughout the enterprise. IBM and consultant stud-ies project that the server installed base will increase by a factor of six between 2000 and 2010, while storage is expected to grow by a factor of 69.3 Every piece of this equipment drives the need for more efficient use of energy to continue supporting business growth during the down-turn and remain competitive.

according to Gartner, “per square foot, annual energy costs in data centers are at least 30 to 80 times more than those of a typical office building.”4

and the challenge is not limited to large enterprises. IBM surveyed more than 1,100 executives from small and midsize businesses across ten market segments in Europe, asia and the americas. Nearly half said energy represented one of their largest cost increases over the past two years.5

The cost of energy is increasing

While data center energy use is increasing, the cost of energy is increasing as well. according to Energy Insights, an IDC Company, a recent survey for Johnson Controls revealed that “[s]eventy-nine percent of businesses expect their energy costs to increase. More than half believe prices will increase 6-20%.”6

Increased demand for IT capacity, increased energy use by the data center and rising energy costs mean the time is right for our clients to take a hard look at energy efficiency.

The need to be more responsive to change is growing

Finally, compounding the problem of rising demand meet-ing rising energy costs, data centers themselves are often older than the information technologies they support. The IT equipment in those data centers is typically turned over every two to four years, in our experience. This presents an opportunity to help clients better align their IT and business growth to their data center and IT infrastructure with “pay-as-you-grow” solutions.

The demand for greater energy efficiency and the data center expansion boom create opportunity for IBM Global Technology Services. and, unlike most of our competitors, we can offer holistic solutions that cross service product lines and provide a wide range of benefits to our clients.

4 For internal IBM use only—not for client distribution

Savings are there to be had, and payback can be immediateFor new data centers, we have modular design approaches that allow clients to pay as they grow by aligning the IT and business needs to the capital and operating costs for a new data center. Modular designs include data centers for small and midsize clients and enterprise clients, as well as temporary and remote data center solutions.

Our optimization and virtualization solutions can cut TCO in half as well as reduce hardware, maintenance and support costs. We help clients increase server and stor-age utilization, which cuts their capital and operating expenses as well as reducing their environmental impact.

CIOs like this because it gives them more flexibility to grow IT capacity within their current facilities and to support their companies’ business growth. Moreover, saving energy in the physical infrastructure provides a tactical fix for CIOs to increase capacity in the near term. It buys them the time to grow and the time to plan a longer-term strategy.

IBM solutions provide a distinct, strategic competitive advantage for our clients. They cost-effectively enable flexi-ble responses to business change that help position clients to emerge successfully from the economic downturn.

IBM can help clients do more with less. We can help clients leverage the dramatic improvements in technol-ogy—smarter, faster, cheaper—to cut costs, get more out of existing IT infrastructures and drive efficiency in IT operations.

Energy-efficiency solutions from IBM are designed to help our clients defer capital expenditures, ease staffing pressures and provide cost savings that pay back the client’s investment within one or two years. Optimization and virtualization solutions help clients transform their infrastructures to dramatically increase efficiency and cut costs. These near-term rOI savings are often the primary motivator for clients in virtually every market segment to adopt energy efficiency and streamline IT operations.

Cost savings offer compelling benefits to key stake-holders in your client’s organization. They provide an opportunity to talk to executives at the C-level about how they all can gain benefits from actions they take as an integrated team.

The CIO can gain flexibility

Our solutions can potentially improve the available IT capacity in the client’s existing data center by 40 percent to 50 percent while using the same amount of energy, based on IBM client experience. This increased effi-ciency can not only help reduce clients’ current energy costs but also make that energy available to new server, storage and communications equipment.

5 For internal IBM use only—not for client distribution

The CFO can save money

Energy efficiency can also help reduce operational costs. In a typical 25,000-square-foot data center, a 40 percent to 50 percent annual energy savings at US$0.12 per kilowatt hour in the United States represents about US$1.3 million a year in annual savings, based on IBM client experience. That’s the kind of cost savings that CFOs appreciate.

IBM has found that for clients with larger data centers or multiple data centers, the savings can be even more significant. If the client has a 100,000-square-foot data center, the annual cost savings could range from US$5.5 million to more than US$6 million if energy costs rise as many clients expect.

Further, clients are beginning to recognize that long-term energy costs represent a significant financial commitment for data center expansion—exceeding the initial capital cost. Optimizing and virtualizing servers and storage devices helps clients get more from what they already have to save operating costs and avoid building overcapacity.

IBM client experience has also shown that when expand-ing to upgrade or build a new data center, the operating costs are up to five times more than the capital costs.

CFOs will appreciate the pay-as-you-grow approach of modular data centers, which allows them to defer up to 50 percent of the capital and operational costs of a new data center until when, and if, it is needed.

The CEO can build a sustainable competitive advantage

around green

CEOs are increasingly concerned about environmental issues. They want to demonstrate that they lead environ-mentally friendly organizations. That annual 40 percent to 50 percent savings is equivalent to taking 1,300 cars off the road or reducing the amount of coal burned in an energy generation plant by 3.5 million pounds.7

a positive environmental brand image is becoming a key competitive advantage. Many of our clients’ cus-tomers are now basing their buying decisions on the company’s environmental track record. and CEOs are looking for IT initiatives that provide near-term rOI and long-term competitive advantage so their companies can emerge stronger and more quickly from the eco-nomic downturn.

In short, energy-efficiency solutions from IBM can help provide flexibility for CIOs, cost reduction for CFOs, and strong, positive environmental branding for CEOs.

6 For internal IBM use only—not for client distribution

Our clients are listeningIBM project Big Green has demonstrated solutions that are available today and can deliver cost savings from more efficient energy use. Even before our project Big Green announcement, IBM was moving quickly to build on our own internal energy-efficiency initiatives and dem-onstrate clear rOI. Unlike many of our competitors, our solutions offer a broad, holistic approach to solving your clients’ energy-efficiency challenges.

The green data center approach has been grouped around five strategic building blocks that provide our clients with the tools to achieve near-term returns on energy-efficiency investments:

Diagnose• —Help clients get the facts so they can really understand what their energy consumption is and gain an understanding of what they might be able to do about it. This applies inside the data center as well as in distributed IT environments. These diagnoses often identify “quick hitters” with immediate payback to extend the life of an existing data center infrastructure.

Build• —Help clients either build new data centers that are highly energy efficient or optimize their existing ones—and reduce the capital and operating costs around energy usage.

Optimize and virtualize• —Take advantage of the capac-ity and capability of clients’ existing server and storage environments to make them more reliable, more control-lable and more manageable; significantly reduce their energy consumption; increase available storage space; and reduce overallocation.

Cool• —Use innovative cooling techniques that are much more efficient than old-fashioned perimeter cooling to handle the heat of high-density computing.

Manage, measure and enhance• —Help clients take control of the measurements and the management of energy consumption in their data centers, and poten-tially move all the way to automation.

7 For internal IBM use only—not for client distribution

Think green, think ahead, save now Energy efficiency means we can help clients support business growth and adapt to be more responsive to change. It means we can help them save on operating and capital costs. and it means we can help them gain competitive advantage and emerge stronger from the economic downturn.

The time is right for our broad capabilities to meet this incredible opportunity. Enterprise Strategy Group recently surveyed 1,000 global senior business and IT managers regarding green business and IT initiatives. respondents were asked what types of consulting and integration ser-vices they were most likely to request to help achieve their organizations’ green goals. The survey reported the following results:8

respondents indicated they were most likely to request a •data center facility design or the redesign of an existing data center to optimize power and cooling efficiency.

Second and third on the list were design or imple-•mentation for server virtualization, and design or implementation for server consolidation, respectively.

Their fourth priority was design or implementation for •storage architecture or consolidation.

rounding out the top five was data center energy audits.•

IBM’s range of energy-efficiency services has already delivered rOI to clients. By offering cross-brand solu-tions that include contributions from site and facilities services, server services, storage and data services, and IT strategy and architecture services, plus the other sales plays, IBM is well positioned to help clients think holistically about all the benefits energy efficiency might deliver—and how they can take action today.

8 For internal IBM use only—not for client distribution

Green data center solutions from IBM: the two-minute elevator pitch

as environmental changes and negative economic conditions impact the enterprise, it’s getting harder for IT to manage costs and achieve rOI. Energy consump-tion has emerged as one of the most significant factors affecting every organization’s financial performance and long-term sustainability. It’s just getting too expen-sive to keep increasing IT capacity without addressing energy efficiency.

IBM has been working with our clients to implement a broad, comprehensive range of solutions to help increase data center energy efficiency.

We can help them assess the “as-is” status of energy •efficiency in their data centers.

We can help them upgrade their data centers or build •new ones.

We can virtualize and simplify their servers or storage •devices to increase their utilization.

We can help them cool their data centers more •efficiently to cut costs and enable server growth.

We can employ automation to manage, measure and •reduce their energy consumption.

and we can help them formulate their strategic •intentions, priorities and plans to address IT energy efficiency and carbon challenges.

In short, we can show CIOs how our solutions can help them cost-effectively support business growth and adapt to change. We can show CFOs how we can help cut their energy costs in half. We can show CEOs how we can help them gain a sustainable competitive advantage. and we can show them all how our solutions are designed to be good for the planet, too.

Rich Siedzik, director of computer and telecommunications services at Bryant University, an IBM client, told

InformationWeek, “Before we did this data center, it was the thing that kept me up at night. … Now, we have

more time to be innovative.”9

— InformatIonWeek

9 For internal IBM use only—not for client distribution

For more informationTo learn more about energy-efficient data center solutions from IBM Global Technology Services, please visit: Green data center sales play on SalesOne

Site and facilities services Web site

Server services Web site

Storage and data services Web site

GTS Sector and Industry portal

IT strategy and architecture services Web site

10 For internal IBM use only—not for client distribution

Notes

1 Gartner, “Gartner Identifies the Top 10 Strategic Technologies for 2009,” press release, October 14, 2008.

2 IBM, “IBM Is the Top Green IT Company,” news release, February 20, 2008, http://www-03.ibm.com/press/us/en/ pressrelease/23563.wss

3, 7 IBM, CIo Leadership exchange, October 2007.

4 Gartner, the Green Data Center Pays off, John phelps and paul McGucking, October 12–16, 2008.

5 IBM, It energy efficiency for small and mid-size businesses: Good for business and the environment, December 2007.

6 Energy Insights, an IDC Company, rising energy Prices are fueling Business Customer Investment in energy efficiency, Doc #EI210356, February 2008.

8 Enterprise Strategy Group, Global Green Business and It Initiatives, John McKnight and Mary Johnston Turner, March 3, 2008.

9 J. Nicholas Hoover, “Data Center Best practices,” InformationWeek, March 3, 2008.

11 For internal IBM use only—not for client distribution

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