DigiPlex chairman Byrne Murphy reflects on the Critical Connections Summit and outlines his thoughts for a greener economy.
At the end of last year, I was honoured to participate in a global keynote panel at the Critical Connections Summit. Under the overall conference banner of ‘Greening the TMT Sector’ I was joined by leading influencers across the industry and we discussed how to change the cultural mindset about sustainability. It is clear to all of us that climate change is having a drastic and lasting effect that threatens many aspects of our lives and livelihoods. It is also becoming clear that we in the IT sector are both part of the problem and are essential to many potential solutions. Digitalization plus innovations in autonomous driving, communications, AI and robotics can all play a significant role in reducing our environmental impact. These and many other technologies depend on data centers, and we need to ensure that the growth of these building blocks of the digital economy does not lead to run-away greenhouse gas emissions and power consumption.
The debate and Q&A session that followed covered many important topics and the views from my fellow panellists provided deep insights. The key message, as presaged by the title of the event, was that new mindsets are needed at all levels to deliver the rapid change needed. I was especially pleased to hear from Manuel Mateo Goyet, the deputy head of the cloud and software unit at the EU’s DGCONNECT, that the Commission is looking at how reporting of environmental measures can be formalised and encouraged across the bloc. This is a key criterion that I’ve been advocating for some time. Organisations, vendors, customers, partners and the general public need a common set of measures so that they can make informed decisions about the sustainability of the digital infrastructure they choose to use.
To my mind, there are three areas where this ‘mindset’ shift needs to and can occur. The first is to conclusively demonstrate that sustainability and commercial success work hand in hand with each other. Too many people view the choice between being sustainable and growing as a binary either-or decision. Today, sustainability is not only essential, but it also makes excellent commercial sense. Properly managed, sustainable data centers are more efficient than both traditional on-premise centres and outsourced data centres run on fossil fuels. Not only does that mean that they create fewer harmful emissions, but they also use less energy. This means they are less expensive to run overall.
Those data centers, which, like ours, are located in the cool Nordic region, have a triple positive commercial impact. With abundant sustainable power, we can prevent millions of tons of CO2 emissions whilst offering some of the lowest electricity costs in Europe. Cool climates mean less need for mechanical cooling, increasing efficiency and lowering energy costs further. And pro-data center tax regimes, plus transparent business terms, ensure that the maximum level of savings on energy costs are passed onto customers. We have calculated that running a 100MW data center complex saves nearly $2.1 billion in power alone over 20 years compared to housing it in Germany. In other words, green business can be very good business.
The second area in which a pro-sustainability mind shift can take place is in design. The panel discussed the implications of a range of different design issues, from the proliferation of smaller ‘edge’ data centers to creating green supply chains – all of which are important. I’d like to make some wider points on design. The hyperscalers are already factoring in some amazing innovations into the design and specification of their new data centers. Others need to do more, as I’ll turn to later, but with over 70% of the $185 billion spent on data center investments made by the five biggest hyperscalers, the direct positive impact of their design decisions should not be underestimated. They are setting the pace; others need to catch up. We cannot be complacent; there are many enterprise and public data centers that are ageing, no longer fit for purpose and significant polluters. To really move the needle, we must encourage as much of this ‘long tail’ to move to newer, cleaner and more efficient data centers as fast as possible. Our recent Nordic Data Centre Trends report showed that this is happening, but not fast enough. By 2022, 45% of organisations will still have some applications hosted in-house. That’s only 8% fewer than today.
We also need to think more innovatively about financial incentives. A weak spot for all data centers is investing in expensive emergency generators to provide back-up power should the main source fail. Those generators run on diesel and so create CO2 emissions when used. Newer technologies like hydrogen fuel cells are coming, but with the very heavy level of investment for hydrogen cells those generators are expected to run for another 10, 15, or 20 years before being replaced. However, being able to depreciate those generators over a much shorter time period, say 5 years, makes the commercial case for earlier replacement much stronger. Small players, and in-house data centers, could adopt newer technologies faster if innovative financial incentives like this were approved by the relevant regulatory bodies.
The final and perhaps the most important mindset shift concerns people. Here there is good news. Millennials and Generation Z are already very environmentally aware. They know that the actions, or inaction, of our generation, can negatively impact theirs. Generally speaking, they are motivated and passionate about taking corrective action. They also see the big picture and are attuned to whole system thinking which considers consumption, efficiency, re-use and circular economy approaches. These ways of thinking and the solutions they deliver will be critical to effect the change needed to avoid continued environmental harm. We know from primary research we conducted in the Nordics and in the USA, that consumers are beginning to understand that the digital services they love do have an environmental cost. In the US we found that two-thirds would consider switching to a more sustainable streaming service if they had an informed choice.
I am very proud that DigiPlex consistently rates among the highest Norwegian businesses in annual Great Place to Work surveys. One of our company’s characteristics which attracts young people to work with us is our focus on sustainability. It is woven into our DNA and it defines everything that we do. Employees, new joiners, partners and our wider communities recognise this, and it encourages them to get involved. Senior management is never going to have all the required new ideas, but there is always a steady stream coming from all around the company. Our team is fired up and enjoys working for something more than the bottom line.
No one on the panel, or in the virtual audience, doubted the need for significant change. Everyone agreed that a cultural mindset shift is needed to make it happen. All left feeling positive that we could take on this challenge and that the people, systems and technology pieces are there for us to make a difference. Now we just need to keep the focus on making change actually happen.