IT Strategy

Green IT – Hype or Relevant Strategy?

February 10, 2008 by Raj Sheelvant

Brian Watson of CIO Insight on his blog “Does Green IT Matter?” tackles an interesting trend in ‘greening’ of products and services. He says that “regardless of businesses’ motivation, investment in eco-friendly technologies continues to grow—fast”. He talks about a study by KPMG, in which “venture capitalists, bankers, entrepreneurs and others said a quarter of new investments will towards green IT”.Why is Green IT suddenly important? Here is my opinion – the confluence of 2 events that are creating new challenges and opportunities for the IT to go green.

1. The rise of commodity prices over the past 5 years, mainly due to insatiable desire by Asian countries (led by China) to modernize, will continue into the future. Demand for base commodity that enable production of power is going to be greater than the supply. The era of cheap commodity is over (at least in for next 7-10 years). This means that the CFO will be under pressure to find alternate viable source of energy in the quest to manage the overhead costs.
2. We have reached a tipping point where majority of consumers are concerned of impact of global warming. There is real drive to “reduce the footprint”. CMO (Chief Marketing Officers) are adapting to the new reality and are baking ‘green’ into their product brand image. CMO’s don’t have the luxury of ignoring the demand by the consumers who want to make sure that the products they use are environmentally friendly. Even hardcore oil companies like Chevron and BP are touting how green they are.

Hence there is huge push on CIOs to deliver an IT infrastructure that is environmentally friendly. Should going green be part of IT Strategy?

If the goal of IT is to align with the business strategy, it’s very easy to envision that the IT Strategy that enables the businesses to achieve both of its objectives a) reduce/manage overhead costs b) increase brand value is not just necessary but extremely essential.

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