Firms are pursuing green IT strategies

Firms are pursuing green IT strategies like never before but new ideas bring new challenges. Does a more energy-efficient approach to the back office mean any improvements on the trading floor? By Phil Albinus

Nearly every major industry is touting its green, environmentally conscious ways, even if the logic is laughable. Major oil firms, auto manufacturers and even airlines are touting their cleaner, greener technologies, despite making up industries that are major contributors to hot gases. Likewise, investment firms are turning their attention to the enormous amounts of energy used and ultimately wasted in back offices and datacenters.

Firms are pursuing green IT projects with greater urgency, consultants and IT vendors report. But a basic question remains: Are they doing it for the greater good or their bottom lines?

"When we are talking about green, are we talking the forest or the dollar bill?" asks Steve Yellen, vice president of product and market strategy for Aperture, an enterprise management system provider. He says that investment firms may claim to be environmentally conscious but they are just as concerned about slashing operational costs. "There are two sides: There is green for the sake of being environmentally conscious and then for the sake of being more energy efficient, which is also environmentally conscious," says Yellen. "The first green means you might spend money to reduce your carbon footprint and the other means being more efficient and saving money and in doing that, it will be better for the environment. We tend to hear more of the second."

According to Kosten Metreweli, vice president of marketing for network management firm Tideway Systems, large organizations are quite concerned with the amount of energy they are consuming, from a carbon footprint perspective and a raw energy perspective. "With oil hitting close to $100 a barrel and the recent energy crisis in California where the spot price of electricity went through the roof, it's a risk. You want to be managing that appropriately," he says.

Another challenge for investment firms in major cities is a lack of real estate and appropriate solutions. "In places like London, you have a city that is thousands of years old. You don't have space to build datacenters that sport the right environmental setup for the sort of equipment these firms are having to host these days. The consolidation and optimization of datacenters is a prime concern for the investment bank. Having a datacenter close to the trading floor is very important for latency reasons, yet that datacenter space is phenomenally difficult to come by in the city of London," says Metreweli.

Because of these reasons, green IT projects are on all major firms' agendas and CIOs are at their environments from a return on investment (ROI) perspective, says Shally Stanley, managing director of global services of Acumen Solutions, based in Vienna, Va. "People would like to be green but there are business motivations behind that. With those motivations, people are working on it actively or fully."

Others agree that a green IT approach has to achieve a return on investment in less than a year in order to gain CIO approval. "Selling something that has a new bell and whistle goes on the back burner. The nice thing about the energy efficiency argument is that it should have its own ROI. If a vendor can come in and say, 'You can be more green and I can save you 10 percent on power and cooling costs,' that is what people are looking for in a contracting economy," says Yellen. He adds that he doesn't expect the recent slowdown and fears of a recession to hamper green IT projects going forward.

A Search for Cooler Ideas

Barclays Capital, the investment arm of Barclays PLC, has a raft of green IT projects under way. According to documents provided by BarCap, "several IT projects have helped to achieve significant environmental improvement including the recent removal of its Global screensaver, resulting in an energy cost saving of over £1million ($1.9 million) and a carbon dioxide reduction of over 3,000 tons."

The BarCap green IT document also states that "Environmental considerations are also key to our datacenter growth. High efficiency carbon dioxide and water cooling are being tested to assess energy efficiency and performance."

BarCap is also pursuing other projects, such as a "virtual desktop," a thin client across the organization that offers "reliability, performance, flexibility and energy efficiency." Instead of running desktop applications from a PC located at each desk, applications run from a remotely located server. Early last year, the investment firm completed a 150-user pilot program for the virtual desktop, and rolled out more than 1,000 units in London, Singapore and the US, plus an additional 800 units in London in late 2007. This quarter, BarCap will roll out 2,000 units in its new office in London, with further global rollouts scheduled for the remainder of 2008. The firm estimates that with annual energy savings of £400,000 ($786,000) per year per 1,000 machines, the initial 4,240 units will save £1.7million ($3.3 million) and more than 5,000 tons of carbon dioxide.

In terms of cooling, BarCap's Cooling Design initiative will offer "smart cooling controls" to target so-called hot spots and prevent overcooling. The program will call for the "relaxation of space cooling requirements-i.e. higher space temperatures within the tech areas and reducing the overall power consumption and size of the chiller plant-and investigation of geothermal cooling and ice storage options." The firm is also installing "free cooling designs" in key US and UK locations. The BarCap plan mentions the installation of an "Active Chilled Beam system" of cooling to new offices on Bank Street in London. "This will provide up to 200 watts per square meter cooling capacity with approximately 20 percent reduction in electrical capacity, and is draft free. This type of cooling system is now the Barclays Capital preferred standard for general office and trading floor cooling."

Power savings is a goal for major investment firms. "A lot of monetary savings through green IT is actually in cost avoidance. Some clients are running out of power in their datacenters, but they are able to prevent putting in very costly power upgrades. Those can be $5 million or $10 million depending on the amount of additional power being brought into the facility. If they're able to extend the runway with their existing facilities, in essence it saves them money," says Stanley.

She notes that some of Acumen Solutions' midsize clients are embracing technologies such as virtualization and better power management processes to drive down overall power costs by as much as 30 percent.

"The days of an endless energy supply are over," says Acumen Solutions' Stanley. "It's a finite resource and people are hitting that wall more and more."

Nasdaq Cuts Costs

The Nasdaq stock market has put the pursuit of green IT on the fast track with a variety of IT projects. Starting two years ago, the electronic stock market got out of the datacenter hosting business by leasing space in a pair of datacenters from a co-location provider. In the past five years, it put together a program to minimize the electricity it is using, says Phil Marie, senior vice president of operations and technology at Nasdaq.

"We're always looking at saving energy. We review with our vendors on a constant basis to go over their plans for cutting energy costs, either with more affordable solutions or more efficient power supplies. We are also using different power-saving technologies," says Marie.

For the past 18 months, Nasdaq has been using new storage technology that when not in use, does not spin, almost going into a virtual sleep-mode. "It's called Maid technology, as in multiple arrays of idle disks," Marie explains. "We are getting this from new storage vendors and this Maid technology has been really successful on our end. It gives us a lot of storage online and we can eliminate tape and use virtual tape systems to run on it. When they're not being accessed, which is a majority of the time, the disks spin down and they stay that way until there is an access issued for the data on the disk."

In 2003, Nasdaq owned all of its datacenters, namely two dedicated facilities. One facility was using 15.5 million kilowatt hours per year, while the other was using 14 million per year. The market-maker created a technology roadmap to get rid of mainframe computing and adopt a more commodity computing approach with servers running Intel chips. "We also decided to get out of the real estate business. We weren't using our buildings efficiently. We made a conscious effort to sell our datacenters and we went to a co-location model," says Marie.

Marie says Nasdaq pursued a model it called a "virtual datacenter," where it put computing power as close to the end user as possible, but the firm did not own the space. "Basically, we use the space we need. This year, when we look at our two facilities, we cut energy usage from 2003 by almost 50 percent. Instead of 30 million kilowatt hours, we are now running 15 million kilowatts a year," says Marie.

Marie says the energy savings are "massive. It's great for the environment and the Nasdaq energy model," says Marie.

The Green Trading Floor

While the back office might be the red hot epicenter of energy conservation, firms are also looking across the enterprise to save money on energy consumption. One target is the trading floor.

Even though trading floors should by all rights be shrinking thanks to innovations in electronic and algorithmic trading strategies, trading floors continue to blossom. In fact, The Royal Bank of Scotland (RBS) is building what will be the largest trading floor in Stamford, Conn., a mere 40 miles north of Manhattan. It will be across the road from the current largest trading floor title holder, UBS Securities.

The days of the shrinking trading floor are far from over. That said, cooling the trading floor and cutting costs remain a priority.

According to Rick Hoffman, president and CEO of ClearCube, the blade computing manufacturer met with the RBS architect who is putting the new trading floor together. "One of the new technologies can provide an exact PC experience over Ethernet and this is the key thing for them. RBS is looking to put its datacenter about 20 miles away from the new floor," says Hoffman. "They are still deciding if it's near or far-trying to decide just how close to Stamford it is. Needless to say, our older technology had a limitation of 200 meters. Our new technology gets rid of that distance limitation and RBS is one firm we are working with for whom the new technology is a perfect fit."

Hoffman says ClearCube is also working on Wachovia's new 46-story building in Charlotte, NC, which will have state-of-the-art blades. "They are very proud to state that every technology going into that building is an Energy Star-compliant piece of technology," says Hoffman, who estimates that there will be 2,000 computing seats inside the new building.

According to Hoffman, plans for greener trading floors have passed the planning stages. "We are seeing requests for proposals (RFPs) that large banks are putting out. They are asking for an off-floor trading desktop. They are looking for driving the benefits for green activity and other benefits to centralized computing, like disaster recovery. Think about the fact that the blades are 20 miles up the road: If traders can't get to the building they can connect to the same blades through a home PC Web browser," he says.

What will the green trading floor look like in five or 10 years? In five years, ClearCube's Hoffman predicts that enterprises will standardize on two to three datacenters around the world. "They will then have areas of trading, software development and task workers who will tie into one of those datacenters. That end-user device they are using is running only 10 to 15 watts, which is very small. It will be fan-less and have no moving parts. It will put out very little heat so that the air conditioning inside the actual people space will be reasonable," he says.

Is this realistic in half a decade? Hoffman and others say it is. "We're already close to that today. I believe Wachovia is taking the lead on this right now. Morgan Stanley had the vision a couple of years ago but they slowed down there. Credit Suisse has a lot of early adoption in this space and I have also seen this in Bank of America," he says.

Do CIOs have a green IT wish list? Addressing cooling and reducing the number of servers seems to be priorities, even though firms are also on a mission to grow their grids.

"From my perspective, I want better thermals on my servers and storage devices that reduce the amount of heat they're producing, and have a better way of getting rid of the heat. The other thing we're looking at is more efficient power supplies that are showing up in new equipment," says Marie of Nasdaq. "It's very inefficient."