The Palo Alto, Calif.-based company announced Wednesday that by 2010 it will reduce the amount of energy it used in 2005 by 20%. The announcement is tied to a new global strategy at HP and touches three aspects of the company's operations: the products and services sold to customers, internal operations and supply chain management.
The company has launched an all-out marketing campaign to tout its commitment to energy efficiency. At a meeting with reporters in Boston Wednesday, Paul Perez, vice president of storage, networks and infrastructure at HP, sang the praises of the company's internal changes. The reduction of its 85 small data centers to six large centers, the use of cutting-edge Halo technology for real-time, high-definition videoconferencing and "even simple things," like developing applications that can talk to each other, are driving annual 25% to 35% net reductions in energy costs.
Thomas Condon, senior consultant at System Development Integration in Chicago, said the initiative is certainly a good thing "on the surface," if only because it sets a precedent for smaller companies.
"My only question is, should they have done this a little sooner? The power supplies in computers and the heating elements in printers have been notoriously inefficient for many, many years," said Condon, whose company recently analyzed data center consolidation for the city of Chicago.
"Are they going to make the goal? Nobody can tell until it happens, " he said, but judging from organizations that have taken energy efficiency seriously and have pursued LEEDs certification, for example, "20% is certainly possible." The data center consolidation alone will reap HP tremendous savings, he said.
Much of the evening briefing was spent on data center operations, an area where HP is teaming with architects, engineers and construction companies and using its own software management programs to build state-of-the art facilities and help existing date centers become more energy smart.
Until recently, data centers tended to be mindless consumers of energy, with little communication between IT and data storage managers, experts say. The "Who's on first?' mentality that plagues many data centers will not be easy to change, because there are literally so many parts, as well as politics. Not to mention the shockingly low adoption rate of standard best practices. But the problem of ballooning energy consumption in data centers is not insurmountable, Perez conceded. "It's not easy, but it is not hard, either. It is a mindset."
He should know. An electrical engineer and microprocessor designer who holds patents in integrated circuit and computer design, Perez said he often tells customers, "I spent over half of my career creating the problem."
Given the low adoption rate of even straightforward best practices, what is the demand for cutting energy costs? Can HP make money in making data centers more efficient? Perez says the prospects are impressive. He estimates the market for making data centers more energy efficient is in the $3 billion range. HP has already lined up 70 enterprise customers that it believes can save, in the aggregate, $50 million in energy costs.
Perez also predicts that the labor arbitrage that has driven companies to offshore routine IT functions will lead to a global approach to energy consumption, where companies adopt a "follow the sun" view of purchasing energy. Since the cost of electricity is cheaper depending on time of day -- 4 a.m. being better than peak use at 4 p.m. -- companies will weigh the cost of broadband versus the cost of electricity. "It is always 4 a.m. somewhere in the world," Perez said.
Let us know what you think about the story; email: Linda Tucci, Senior News Writer